There's not unpayable debt. US Dollars are privately owned financial assets and federal Liabilities. The purpose of privately owned financial assets is paychecks, shopping, commerce, savings, etc. Federal debt doesn't fund the Govt. Federal spending funds capitalist business and consumer functions. Financial firms store excess Dollars by moving those from their checking accounts at the Fed to Treasury Securities account balances, for longer term savings of minimum 30 days. Both consist of spreadsheets on Federal Reserve computer systems. When Dollar balances are moved from these "reserves" accounts on Fed spreadsheets to Treasury Securities accounts also on Fed spreadsheets, that's called "going into debt". The analogy is an individual or company moving funds from checking to a 6-month CD. Checking balances are volatile, so not considered saved assets. CD or savings balances ARE considered saved assets. The balance statement says how much the bank owes you back, your entire deposit plus interest, or the quantity of Bank Liabilities that you own . Back to the US Treasury. What happens when the term of these Securities account balances reaches term-maturity? The balance is subtracted to zero and simultaneously added back to Reserve (checking) balances. When those balances in Treasury Securities are subtracted and the numbers moved to reserve balances, that portion of "national debt" is "PAID OFF". Those Treasury Securities Liabilities no longer exist. What happens next? The financial firms that own those US dollars, or the mgmt of the Fed on their behalf, move their balances again from checking to savings, from reserve accounts to Treasury Securities accounts. They get safe storage and interest. This process also stabilizes overnight interest rates, from day to day. This is System Design. It's not "funding" the Treasury. Congress requires the Treasury to sell Treasury Bonds, but the private sector financial system only possesses the Dollars to purchase those T-Bonds (deposit into T-Securities accounts) AFTER a round of US spending, not to fund the spending in advance.
9 months ago (edited) | 0
Ayn Rand Centre UK
"So, if the vortex described when discussing the USA's unpayable debt, has already got a hold of us, how do we avoid personally being sucked into oblivion? Or at least, not sucked in first. Before you're tempted to convert all your fiat currency into tinned food and haul it off to the woods for your final stand, you might want to consider the strategies Jim Brown outlines for surviving and safeguarding your wealth, while continuing to live your best life."
Check out Richard's review of Jim Brown's new book on Substack: aynrandcentre.substack.com/p/book-review-a-black-h…
9 months ago | [YT] | 38