Rob from the poor and give to the rich:
The Fed is a privately-owned banking cartel that has a monopoly over money creation in the United States. Nobody else, including the U.S. government, can print money. So those that claim that “the U.S. government can print money” are just dead wrong.Read the whole thing.
When the U.S. government wants to spend more money than it has, it asks the Fed to make some more money. The Fed then creates money out of thin air that did not previously exist. Normally this money is not even printed up. It is just entered into a computer.
In return for the new money, the U.S. government gives the Federal Reserve some U.S. Treasury bonds. In essence, U.S. Treasury bonds are promises to pay back money. But the U.S. government always agrees to pay back more money than it receives. So a larger amount of debt is created than the amount of new money that is created.
When the Federal Reserve receives those U.S. Treasury bonds, most of the time they take them and auction them off to interested buyers. This is how they get into the hands of the ultra-wealthy and the international bankers.
So how is the U.S. government ever supposed to pay back all that debt if the amount of new debt being created is always larger than the amount of new money that is being created?
Well, the theory is that the money will be able circulate through the U.S. economy really fast and that the federal government will be able to tax it enough times and at a high enough rate to be able to pay off the debt plus the interest.
But that never seems to work out, does it?
Instead, the federal government always finds that it can’t fund government activities and pay off the debt at the same time, so they always come back to borrow more. That is why it is called a debt spiral.
Update: "How the Fed is creating a new feudalism"
Posts
