We know @AOC has been speaking with @StephanieKelton and other #MMT folks.
She’s been doing a GREAT job handling the “how are we gonna pay for it?” questions, but here are key points to remember:
• Gold standard ended in 1971.
• We have a fiat currency.
• Money is credit.
She’s been doing a GREAT job handling the “how are we gonna pay for it?” questions, but here are key points to remember:
• Gold standard ended in 1971.
• We have a fiat currency.
• Money is credit.
Our “tax dollars” don’t actually “pay for” things.
The Federal Reserve actually makes all of the Treasury payments, and it has been this way since 1913.
It gets more complicated than this, but:
1) Treasury has Fed CREDIT bank reserves.
2) Banks credit accounts (DIGITALLY).
The Federal Reserve actually makes all of the Treasury payments, and it has been this way since 1913.
It gets more complicated than this, but:
1) Treasury has Fed CREDIT bank reserves.
2) Banks credit accounts (DIGITALLY).
The Treasury spends by having the central bank credit bank reserves.
The Treasury receives tax payments by debiting bank reserves.
This is pretty much (systematically) like burning paper notes.
We have special banks now (like dealer banks, for example), but that’s the gist.
The Treasury receives tax payments by debiting bank reserves.
This is pretty much (systematically) like burning paper notes.
We have special banks now (like dealer banks, for example), but that’s the gist.
Reserves are debited when there are tax payments.
Reserves are CREDITED when there is government spending.
This renders the “where will we get the money?” talking point BUNK.
There is NO bunker off in a desert somewhere filled with a limited supply of funds that we rely upon!
Reserves are CREDITED when there is government spending.
This renders the “where will we get the money?” talking point BUNK.
There is NO bunker off in a desert somewhere filled with a limited supply of funds that we rely upon!
