The item above is an actual article from Russia Today, which is always gloating about the U.S. government’s fake “debt crisis.”
I say gloating because Russia Today (RT) is funded by the Russian government, which is now in a cold War with the USA and the West. The U.S. government’s fake “debt crisis” is a favorite topic of RT.
Russia’s “national debt” is supposedly 11.3 trillion rubles (USD $ 143.6 billion). That’s a “crisis” too, ain’t it?
This equals an additional $70,000 in net federal borrowing for each of the 117,480,000 American households, according to Census Bureau estimates.
About $13.7 trillion makes up public debt, and the rest comes from government borrowing.
Huh? What is the difference between “public debt” and “government borrowing”? This is meaningless.
The US currently functions without a debt ceiling. Legislation in November suspended it through March 2017 so borrowing can continue without a limit until that time.
First of all, the “debt ceiling” is an arbitrary limit to the number of T-securities the U.S. government can sell. The limit is dreamed up by Republicans in Congress, and agreed to by Democrats. It is meaningless, since the U.S. government does not borrow any of its spending money. The government creates its spending money out of thin air by electronically instructing banks to credit accounts. The “debt” ceiling is a total charade.
Thus, whenever there is a “debt ceiling crisis,” the U.S. Treasury claims that in order to keep paying the U.S. government’s bills, the Treasury must resort to “extraordinary means.” The corporate media outlets never define “extraordinary means,” since the subject is complex and very technical — i.e. it is bullshit. Translated, it signifies that the U.S. government will be forced to continue creating money out of thin air like it always does. And the Fed will be forced to continue creating money out of thin air to pay the interest on T-securities like it always does.
Second, the only sense in which the U.S. government (in this case the Fed) “borrows” is by accepting deposits into Fed savings accounts. When you buy a T-security, your purchase money is deposited in a Fed savings account in your name. You lend your money to the Fed. When your T-security matures, you can collect your money, plus interest. Or you can “roll it over”; i.e. set your Fed savings account so that it automatically purchases another T-security each time the old one expires, so that interest accrues continually.
According to former Comptroller General of the United States [the director of the Government Accountability Office] David Walker, analysts understate the real extent of the US government’s financial commitments, which in reality exceed $65 trillion.
Oh no! Where will we ever get $ 65 TRILLION?
Actually the U.S. government creates about $3.6 trillion a year out of thin air. So, over the next century, starting today, the U.S. government’s “financial commitments” (at the current rate) will total $360 trillion!
Walker served as the U.S. government’s top accountant bullshitter in 1998-2008. “You have to consider the debt we owe to the Social Security and Medicare trust funds, as well as the huge unfunded obligations for our social insurance programs. When you add all those numbers up, the number is over $65 trillion, rather than the lower numbers a lot of the economists want to talk about.”
Wow. Good thing we have this guy…
CHANGE OF TOPIC…
I saw the image below on the Internet. It is an example of how most people think about money.
I presume this means that the Fed (or the Treasury, or both) should create fewer dollars, and also tax more dollars out of the U.S. economy, so that there are fewer dollars in circulation. That is, we need even more austerity than we have now.
Is there lead in your city’s water supply? The U.S. government can create money to fix it, but this would cause dollars to become worthless, right? And worthless dollars can’t fix anything. Right?