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Posted on 5/4/24 at 8:34 am to CDawson
Kamala Harris obviously wrote his answers.
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Posted on 5/4/24 at 10:42 am to RiverCityTider
quote:
But money is actually created by private banks through loans. So every dollar loaned is money, and that money is borrowed at interest.
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Now here is where it gets interesting. As I was writing this, her question actually made more sense. Why? Why do we borrow all the money in circulation? From banks?
We don't borrow it all from banks. To add another dimension to this, credit cards do the same thing. An aspect I've been harping on for a year now is consumer-created debt. LINK
And a lot of that is running on an interest rate of ~20%. LINK
As inflation has risen, we've seen a rise in delinquencies and defaults. LINK Along with that, we're seeing bankruptcy filings climb. LINK
Every extra dollar created dilutes the value of the already-existing dollars a tiny bit more, consumers creating dollars through debt-creation is no different. As inflation has continued to rise, consumers have tried to offset more and more of it by putting more on their credit cards. The problem is more and more of them are just servicing the debt instead of paying it off (evidenced by savings dropping).
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When the Treasury prints physical currency, it's primarily serving as a medium of exchange for transactions and isn't directly impacting the overall money supply. The money supply is more significantly affected by the actions of the Federal Reserve, such as buying debt or adjusting interest rates.
I think that needs a little more clarity for those who may not understand why it is so.
The vast majority of USD is digital, not physical ( M2 is something like $20T while there is only around $2T in physical currency), so it can be thought of as physical currency printed up is only creating more physical representations for what already exists digitally.
Posted on 5/4/24 at 1:17 pm to Bard
The average American lives on borrowed money and assume it is okay for the Fed to do the same. The statement that the US "can't go bankrupt because we print our own money" has to be the most moronic take I have ever heard when it comes to fiscal policy.
Posted on 5/4/24 at 1:21 pm to CDawson
Hey OP apologies for the Germans
Posted on 5/4/24 at 7:54 pm to CDawson
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The average American lives on borrowed money and assume it is okay for the Fed to do the same.
I see it as the other way around.
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The statement that the US "can't go bankrupt because we print our own money" has to be the most moronic take I have ever heard when it comes to fiscal policy.
I heartily agree, but as the federal government goes deeper and deeper into debt, I have a feeling the belief in it around DC will grow solely because it presents Congress (and the federal bureaucracy) a (faux) path for continuing to deficit spend without paying down the debt.
Posted on 5/4/24 at 8:04 pm to CDawson
Neither does the idiots on reddit I have spent all day there omg they are in for a big disappointment with stormy and company
Posted on 5/4/24 at 8:07 pm to CDawson
Neither does the idiots on reddit I have spent all day there omg they are in for a big disappointment with stormy and company
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