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View Diary: White House issues veto threat over House's proposed 'Pay China First' bill (62 comments)

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  •  The US Govt is in now way like a household or (0+ / 0-)

    business.  I think that many people here at Kos would agree with this simple statement.....however, precious few realize and appreciate what that means.  The US Govt is monetarily sovereign, the Govt does not need taxes in order to create and spend its own currency.  Similarly, the Federal Govt does not borrow money.  The only reason that Treasury still issues bonds is to maintain a positive interest rate instead of the natural rate of interest for banks which is zero.  
    Households and businesses must collect money or borrow in order to have money to spend.....the Federal Govt creates new net money any time it deficit spends....which it does by instructing the Fed to credit bank accounts.
    One final fun fact.....did you know that the Treasury is not at all responsible for "repaying" Treasury bonds.  Thats right, you will not find a single payment entry in the budget for securities maturation payments.  The Fed simply transfers the bond holders money from their securities account (savings account) to their reserve account (checking account). ....Treasury is only ever responsible for the interest.

    MMT = Reality
    neweconomicperspectives.org
    http://mythfighter.com/...

    "The Earth is my country and Science my religion" Christiaan Huygens

    by Auburn Parks on Tue May 07, 2013 at 08:04:16 PM PDT

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