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Patrick
2015 Oct 11, 8:34pm
but, wait, $2.8T of that is held by the Fed and therefore wasn't even issued as debt at all, they just printed that money and called it debt
i don't get that. the fed does print money to buy up debt (like the mortgages that they bought from irresponsible banks), but that's not what you mean i think.
maybe you mean US treasuries that the fed prints money to buy?
Bellingham Bill
2015 Oct 11, 8:45pm
I'm not intimately familiar with the details, but eventually $2T in Treasuries issued by the Treasury ended up in the Fed's hands, and they didn't spend money like we do to buy them.
http://www.federalreserve.gov/releases/h41/20090115/
shows 1/2009 the Fed's balance sheet stood at $2T on the asset side and $1.2T on the liabilities , for $800B of "reserve"
Five years later:
http://www.federalreserve.gov/releases/h41/20140116/
the reserve had grown to $2.5T. Don't know the details driving the Fed's balance sheet, i.e. if they bought something for $1T and liquidate it at $100B, they "lose" $900B but so what, lower assets value held by the Fed reduces their balance sheet which is what everyone wants apparently.
Thinking about the Fed's operations makes my head hurt, since they're really the 'man behind the curtain' in our economy.
Conservative Bullshit is going to kill this country someday.
Please don't confuse teapublicans with verifiable facts. It makes their head hurt, then they start throwing Palin/Trump word salads at the rest of us.
Heraclitusstudent
2015 Oct 12, 12:29pm
i don't get that. the fed does print money to buy up debt
Yes the feds bought US treasury bonds, giving (indirectly) the government money to fund spending.
To Bill's point: this is not really a debt like treasury bonds normally are because:
- they are rolled over: so when the gov pays back this debt, the fed immediately lends it back
- interests paid by the government are also immediately returned to the government.
So it doesn't work like a debt, and there is no reason to count it as part of something that has to be paid back.
Heraclitusstudent
2015 Oct 12, 12:35pm
Thinking about the Fed's operations makes my head hurt, since they're really the 'man behind the curtain' in our economy.
They are like a bank: they have a balance sheet where assets are mainly:
- treasury bonds,
- MBS
And matching liabilities are mainly:
- printed cash in circulation (such notes are working like a debt of the fed to the carrier).
- reserve deposits from commercial banks. The banks deposit their reserves on "bank accounts" at the federal reserve.
So Rep Brat said on Meet the Press or whatever this morning that the nation has $19T in debt and $100T in unfunded liabilities.
He being a member of the "Freedom Caucus" I knew that was rightwing bullshit but I wondered what the real numbers were.
Debt to the Penny
https://www.treasurydirect.gov/govt/reports/pd/pd_debttothepenny.htm
says: $18.15T but $5T of that is intragovernmental and doesn't really count (if that were the only debt we'd be doing great).
So "Debt Held By the Public" is $13T -- but, wait, $2.8T of that is held by the Fed and therefore wasn't even issued as debt at all, they just printed that money and called it debt.
If anything, it's anti-debt since the Fed remits interest paid back to the Treasury.
So the actual debt we need to worry about is just over $10T, not the $19T bouncing around in whatever Rep Brat is using for a brain.
And we don't even need to worry about that really since this is no longer the 19th century and money is a lot more fungible and manufacturable than back when we were on the fucking gold standard or whatever back then (and bona fide capital-c Capital was very hard to come by, now we're drowning in capital)
This chart:
is this $10T as a multiple of corporate profits, i.e. if we taxed corporate profits at 100% for 6 years the $10T would go to zero.
Sounds like a plan! Funny how raising taxes on rich people is never part of the conservative policy plan.
Oh, that's right, the 1% are the "Job Creators" . . .
Conservative Bullshit is going to kill this country someday.