News Americas, NEW YORK, NY, Fri. July 31, 2020: First a shout out to my Boss here at Trump’s America …
HAPPY BIRTHDAY!!!! Now here is a very special episode for her to change her life and all my readers and admirers and for the entire nation and beyond.
This is very, very simple. Just IMAGINE you have …
Two bank accounts – call one savings and the other checking and you regularly transfer funds from your savings account to your checking account to pay bills. When you do, all you are doing is transferring funds from one account to the other. If you don’t have funds to transfer you borrow them.
Of course, you now do all of this electronically – except for cash. Well its exactly the same for OUR federal government. It has TWO accounts – the Federal Reserve Bank, where it keeps our national money as much as it wants to create; and the Federal Budget Account – where it deposits funds to pay the federal budget.
The one very BIG difference between the federal government’s two bank accounts and yours, is the government creates as much money as it wants and prints money if you prefer, for its savings account – the Federal Reserve Bank.
NOW HERE IS THE TRUTH that will make you FREE forever …
When the government “borrows” from its savings account to fund the annual budget, IT IS BORROWING FROM ITSELF. It also issues IOUs that it sells to others – like the Chinese – and millions of others – call them bonds but ….
THE REAL PONT IS that ONLY the Federal government is borrowing from itself and potentially paying itself back with what is called deficits and surpluses.
The Federal government is not borrowing from Chase or Citibank or anyone else unlike you or I do if we run out of funds. The government NEVER runs out of funds, and it owns the funds and spends ONLY on itself!
It sounds like great magic and it is, especially if we use it well. It is “magic” we created by building such a strong successful United States. You and I.
THE BIG LIE that even Presidents like Obama and Trump believe as gospel truth, is that the government has to pay back all the funds like you or I would to Chase or Citibank or whoever else we borrow from or else. But that is absolutely not true for the federal government. When it spends more than the taxes it brings in, call it the “deficit,” it does not owe $$$$ to someone like you do.
We are the VICTIMS of this dangerous myth that the Federal government borrows funds like the rest of us or companies or states or local governments!
We the people OWN THE BANK – the Federal Reserve Bank – and we can print as much money as we like to fund whatever makes sense. In fact, if it is for truly good reasons, the more we borrow from ourselves, the bigger the DEFICIT – the better for all of us and for our future – like doing so right now!
This pandemic is a PERFECT example. The Federal government is spending TRILLIONS it had not intended and will spend TRILLIONS more in the coming months Has the government collapsed? NO. Has the value the U.S. dollar collapsed? NO. Have interest rated increased at all? NO.
Because it was done for a very good purpose. To SAVE our nation and most Americans from a horrible fate. IMAGINE THE OPPOSITE!!!
Imagine if Congress and the President had not provided those TRILLIONS of dollars but instead said: “We cannot afford to do this.”
Then our nation and our economy would be in a state of COLLAPSE today with no way back!
When is the government going to “pay back” these TRILLIONS to itself?
NEVER …… and it does not matter, because as a result of this spending sooner or later, our nation and the economy will get back to where it was before Covid-19, and doing so will be the “payback” our government requires.
These HUGE deficits have made America stronger and better and our government is able to keep SPENDING as needed because the entire world understands and appreciates the power and value of the American economy.
And China and everyone else will continue buying American bonds at low interest rates because it is good for them. But let’s say China wants to sell all its U.S. bonds – all it will do is decrease their value to China and all it will get back instead are U.S. dollars – which pay NO interest at all.
So, can our government spend unlimited funds for any reason at all no matter how unproductive, frivolous or dangerous? NO, because that will effectively undermine American economic credibility and inflation will SOAR as it does and has throughout history for countries and currencies that the markets and the world see as seriously flawed and subject to further decay.
WHAT IS THE LIFE CHANGING MESSAGE HERE?
That our FEDERAL government should set its budget and spend as much as required in ways to make our nation stronger and better for the future.
And I have just changed your life forever with this episode, if we all insist Congress and the President deal with this reality and not the fiction about federal government “deficits” that must be eliminated because they are bad.
I can write so much more on this all-important subject and I will in future episodes but right now I have to go and buy birthday gifts for my Boss ….
Happy Birthday Boss!!
(This series dedicated in honor of the late Liu Xiaobo & Jamal Khashoggi)