M2 (a broad-based money supply measure) shrinkage

A growing economy needs a growing money supply to keep this from happening, not unlike how the aforementioned 12-year-old becoming a teenager needs ever-larger shoe sizes. If a 16-year-old tried to make do with his 12-year-old shoe size, his feet would hurt and eventually it wouldn’t work at all.

On top of that, a routine expansion of the money supply is necessary to keep prices stable, or otherwise rising in a gentle and predictable manner.

This dovetails with human behavior in terms of wage expectations. If an economy grows while the money supply does not, wage levels have to fall, and people understandably hate that.

It's easy to give an employee a raise and justifiable to keep an employee's pay the same, but almost no employer says, “Guess what, we're reducing your pay this year by 10% to account for deflationary trends.”

At any rate, those factors help explain why, in normal times, an expanding economy and a reasonably expanding money supply go hand in hand. But when government spending enters the picture, things can look radically different.

For the first time in the modern era, the U.S. money supply is contracting.

You can see it in the chart below, which shows the monthly year-on-year percentage change in M2 (a broad-based money supply measure) dating back to January 1960. Prior to last month, M2 growth had never gone negative in the history of the data series. But in December, it did.