Hacker News new | past | comments | ask | show | jobs | submit login

"Borrowed money" is wrong term here. Yes, officially US government is borrowing it, but it is borrowing from FED which does not really have the money.

Imagine this: you need $100k so you come to me, and I write you a check. BUT: you're not allowed to cash that check. Instead you use it as collateral for a $100k bank loan. But the bank is not allowed to cash my check either, it can only put it into safety deposit box. And if you default on your loan bank will put that check on auction. So, time flies an no one ever tries to cash my check. And if they ever tried they would find that I never had that $100k in my account in the first place. I "printed" that money when I wrote the check. That's how "borrowing" between FED and Government works, and that's why it is money printing. FED is bluffing about having all that money, but no one is legally allowed to call their bluff.

Also: no, those loans will never be repaid. With Modern Monetary Theory debt can only increase in nominal value, until US follows the trajectory of Venezuela, becoming a failed state with hyperinflation.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: