Thread by @mike4evolution

🧵 Some fools have that faith in the divinity of America. They believe the USA, as the one and only superpower, has some kind of magical powers. They can just print any amount of dollars they want! And even when they can't, they can still issue any amount of bonds they want!

So they can borrow all the money they want. And between printing and borrowing, the US government can spend as much as they want, have as many wars and as many military bases and aircraft carriers as they want, buy everything they want. Hallelujah.
FREEDOM WITHOUT CONSEQUENCES.

But that's just NOT real, and can never be real. Maybe USA can live like that for a while, pretending they can do whatever they want, without consequences, but that's far from sustainable. Even the alleged god can never create something from nothing magically just like that.

Spend more money than you earn, a growing deficit. Print trillions of dollars, you cause inflation. The value of the dollar declines, gradually you lose the dollar hegemony.
Hike interest rates to curb inflation, you cause credit crisis, bank failures and recession.
#Consequences

Because US can't print as many dollars as they want, they go for the second-best option; Borrow the deficit. Printing and borrowing, borrowing and printing, like there's no tomorrow. And brag about how rich and powerful the US is, exceptional, while the rest of the world is poor!

And don't mind servicing the debt, because the interests are so cheap. And you can always inflate your debt away (print $$ to pay the debt), if you have to, because all the debt is in dollars. What a privilege! Talking about spending, funding wars and living without consequences.

But Who Owns the US National Debt?
1. Federal Reserve, state and local governments
2. Foreign governments (Japan, China, else)
3. Mutual funds
The rest is owned by US banks and investors, pensions funds, insurance companies, and holders of savings bonds.
thebalancemoney.com/who-owns-the-u…

So when Fed sells the treasury bonds, to curb inflation #QuantitativeTightening, and top US creditors (Japan & China) do the same along with the other "allies" to support their own currencies, bond markets and economies hit by inflation, Who'll lend US?
globaltimes.cn/page/202304/12…

The local US banks & investors of course. But without the Fed & foreign governments, the rest is just not enough. Relying on local money will drain liquidity from the system, cause a bigger credit crisis, bank failures and deeper recession.
#Consequences
bloomberg.com/news/articles/…