What a useless string of absurdity.
The US Congress is the monopoly issuer of its fiat currency. This means it can “NEVER” fail to pay any obligation denominated in that same currency, which is why our nation accepts no debt in a foreign currency. It is this guarantee that investors will always receive what they are promised that makes our dollars the safest store of value on the planet.
EVERY SINGLE CONCEPT FORWARDED IN THIS ARTICLE IS FALSE.
It starts with the falsehood that the US government must “get” funding from someone for its spending. The truth is that it is investors and taxpayers that must “get” dollars from the government and that “DEFICIT” spending by that government “funds” both, not the other way around. Issuance of Treasury bonds to ‘match” deficits (not fund) is a leftover from the gold standard that was purposed to defend the gold reserve.
Bonds are not a necessary function of funding a government that neither needs nor uses revenue from any source to spend. The law, self-imposed by Congress in the Federal Reserve Act (1913), now only provides the Fed with leverage to set interest rates by purchasing and selling Treasury bonds on the secondary market and to provide a floor for investments. The excess reserves required to purchase the bonds can only come from deficit spending by Congress, so they exist before a single bond is sold. The proceeds from bond sales are destroyed by the Fed the moment they become Treasury assets, as are tax collections.
This doom and gloom rhetoric surrounding the debt that isn’t a debt plays on people’s ignorance of how our monetary system functions, equating the process to our household budgets. From the time we get our first allowance we are indoctrinated in the concept of “earning” our money before we can spend, so it is quite easy to posit the government should do the same and not have it questioned. This would only apply if we had a legal money printing machine in our basement.
We can run out of resources, or experience distribution problems that raise prices on individual commodities, but inflation is not a result of too many dollars. Investors don’t determine the interest rate nor do they pose any threat to our economic system with their choice of investment options because we never “need” their money. Money is a creation of Congress and doesn’t grow on rich people, as much as they might like you to think it does.
