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When the US government has no money and running a debt and needs to spend money it needs to print money or print treasury notes or treasury bills in form of bonds that other countries buy and over time the US will pay it off to those countries that buy those bonds.
My question how does the US government know what to do? Why some times they just prints money and other time they print treasury bills?
I know normally the US government does not like printing money because than the currency will lose value and the price of goods will go up but they have to decide what to do like print treasury notes or treasury bills or print money.
When the US government has no money and running a debt and needs to spend money it needs to print money or print treasury notes or treasury bills in form of bonds that other countries buy and over time the US will pay it off to those countries that buy those bonds.
My question how does the US government know what to do? Why some times they just prints money and other time they print treasury bills?
The federal gov't through actions of congress makes laws, and may appropriate money for this or that program. They can use money from the general fund if available, or have the Treasury print up and sell bonds to raise money to fund the program. Problem is the federal gov't almost always over spends. So we always need more/new money.
The Treasury does pay interest and principal on the bonds.
...the reality check is in the mail...
Actually, no money has circulated since 1933, if you restrict the term money to that which is NOT debt (notes).
A federal reserve note (aka "dollar bill") is an IOU, denominated in dollars. Pursuant to 12 USC Sec. 411, the US Gubmint is obligated to redeem them with lawful money (aka "gold and or silver coin")
Since 1933, CONgress has repudiated redeeming their kited checks.
Thanks to the world's greatest propaganda ministry, this long con has run for over 87 years.
Perhaps it is about to collapse, based on the national debt exceeding 26.5 trillion DOLLARS (not dollar bills).
Ironically, even if you collected all the "dollar bills" they would not cancel the debt.
"Someone" punked America reeeeeeeeal goooooood.
The Treasury does pay interest and principal on the bonds.
Curious, isn't it, that the deficit (borrowing) is larger than the interest paid?
That's what Bernie Madoff went to prison for doing in the private sector.
I sincerely doubt that creditors will ever get back their principal, based on the situation before us.
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