A VERY big misunderstanding is evident when people keep talking about the "US debt". Let me attempt to break up this misnomer (no matter how futile this may be, since it always seems to fall upon deaf ears). If we have a debt, may I ask... WHO is it we owe money to?
(Some uneducated people will say we owe China. Really? If so, WHERE is th…
A VERY big misunderstanding is evident when people keep talking about the "US debt". Let me attempt to break up this misnomer (no matter how futile this may be, since it always seems to fall upon deaf ears). If we have a debt, may I ask... WHO is it we owe money to?
(Some uneducated people will say we owe China. Really? If so, WHERE is the yuan that the US supposedly borrowed? Answer: There isn't any yuan in the USA because the USA doesn't borrow money from any country, or person!)
All the money in the US Treasury's bond market belongs to the people, funds and countries that have purchased "the debt". It is THEIR money, respectively. They get interest on it (coupons). They can withdraw it whenever they want. It is a large portion of the cash wealth (a portion of the money supply) that exists in the non-government or private sector. You can look at it as an interest bearing savings account. It IS NOT a debt. US Treasuries are ASSETS. The US Treasury could drastically lower or cancel interest payments on treasuries, yet, people will still keep their money there because it is the most optimal safe haven for storing money.
We need to understand both the fiscal and monetary policies of the USA. Most do not. In a nutshell... The US Treasury (fiscal) controls the money supply by spending to increase it, and taxing to reduce it. It's the banks that create credit, which is fronted, repaid, and then zeroed out in a ledger. Hello?! We are no longer on a gold standard. Finance does not follow such archaic principles.
A VERY big misunderstanding is evident when people keep talking about the "US debt". Let me attempt to break up this misnomer (no matter how futile this may be, since it always seems to fall upon deaf ears). If we have a debt, may I ask... WHO is it we owe money to?
(Some uneducated people will say we owe China. Really? If so, WHERE is the yuan that the US supposedly borrowed? Answer: There isn't any yuan in the USA because the USA doesn't borrow money from any country, or person!)
All the money in the US Treasury's bond market belongs to the people, funds and countries that have purchased "the debt". It is THEIR money, respectively. They get interest on it (coupons). They can withdraw it whenever they want. It is a large portion of the cash wealth (a portion of the money supply) that exists in the non-government or private sector. You can look at it as an interest bearing savings account. It IS NOT a debt. US Treasuries are ASSETS. The US Treasury could drastically lower or cancel interest payments on treasuries, yet, people will still keep their money there because it is the most optimal safe haven for storing money.
We need to understand both the fiscal and monetary policies of the USA. Most do not. In a nutshell... The US Treasury (fiscal) controls the money supply by spending to increase it, and taxing to reduce it. It's the banks that create credit, which is fronted, repaid, and then zeroed out in a ledger. Hello?! We are no longer on a gold standard. Finance does not follow such archaic principles.