Oddball
Unobtanium Member
- Banned
- #241
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Great Myths of the Great Depression
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No we didn't.
The authority granted to Congress in the U.S. Constitution to create money is outlined in Article I, Section 8. However, the way the U.S. monetary system operates today is slightly different from the constitutional provision.
The U.S. Congress delegates its power to create money to the Federal Reserve, which is the central banking system in the country. The Federal Reserve has the authority to issue currency, regulate the money supply, and set interest rates. While Congress technically has the power to create money, it typically does not directly engage in the process.
So, why does the U.S. government borrow from the Federal Reserve and pay interest instead of directly financing its expenses through money creation? The decision to borrow money rather than solely relying on money creation is influenced by various factors, including economic considerations and financial stability.
Here are a few key reasons behind the U.S. government's borrowing practices:
1. Monetary Policy Control: By borrowing from the Federal Reserve, the government allows the central bank to have greater control over monetary policy. This helps ensure stability and independence in the management of the money supply and interest rates.
2. Inflation Control: Directly creating large amounts of money can potentially lead to inflation. Borrowing, on the other hand, allows the government to manage inflationary pressures by controlling the amount of money in circulation.
3. Market Access: Borrowing provides the U.S. government with access to additional funds beyond what money creation offers. It enables the government to obtain capital from domestic and international markets, which can expand its spending capacity.
4. Investor Confidence: Government borrowing often attracts investors who are looking for safe investments, such as Treasury securities. These investments are considered low risk and help to fund government operations. The interest paid by the U.S. government on borrowed funds is not profit for the Federal Reserve. The Federal Reserve returns the interest it earns to the Treasury, so the interest paid essentially goes back to the government.
While instances of corruption in financial systems can occur, the decision to borrow from the Federal Reserve is primarily driven by economic and monetary policy considerations rather than inherent corruption.
However, discussions and debates exist around the nature of the monetary and financial systems and how they can be improved to better serve public interests.![]()
How much do we borrow from the Fed? How much do we borrow in total?
The US constitution grants the congress the authority to create money without interest. So why does it borrow from the Federal Reserve, with interest.
It borrows from anyone who buys a T-bill, T-note or T-bond. At interest, of course.
Printing instead of borrowing would make Bidenflation look like nothing.
Not it doesn't. The worst depression of all time occurred after the Fed was created.Again.. the Fed keeps us out of cyclical Depressions
Before the Fed had the actual power to prevent it in 1933Not it doesn't. The worst depression of all time occurred after the Fed was created.
So creating the fed didn't stop depressions.Before the Fed had the actual power to prevent it in 1933
Giving it the power to do so did indeed do that. Read some historySo creating the fed didn't stop depressions.
Thanks for admitting it.
$33 trillion so far.
You can't answer the question. All you can do is dodge it by posting irrelevant information.
And yet it couldn't use that power to stop any other depressions. Weird.Giving it the power to do so did indeed do that. Read some history
Yet there was another massive recession in 1937-1938.Before the Fed had the actual power to prevent it in 1933
Recession … not depressionYet there was another massive recession in 1937-1938.
Borrowing is temporary. Printing is foreverI answered the question.
Printing instead of borrowing would make Bidenflation look like nothing.
Oh, so they can prevent depressions but not recessions?Recession … not depression
They can also debase the currency until it's wothless.Oh, so they can prevent depressions but not recessions?
That’s a pretty good benefit. You’d know that if you had ever read any history.Oh, so they can prevent depressions but not recessions?
So what's the technical definition of a depression?That’s a pretty good benefit. You’d know that if you had ever read any history.
It’s a difference not unlike having a bad cold or nearly dying of influenza
You're obviously too stupid to get the point. Whatever allows the fed to prevent depressions should also allow it to prevent recessions.That’s a pretty good benefit. You’d know that if you had ever read any history.
It’s a difference not unlike having a bad cold or nearly dying of influenza