The stock of Treasuries is generally misunderstood to be the national “debt”. In fact, it is the record of the net transfer of funds to the private sector from the federal government. It is not money that was borrowed by the Treasury. The federal government is monetarily-sovereign, which means it creates the money it spends and destroys the money it taxes back. The Treasury does not borrow what it can create as needed.

When the Treasury spends more than it taxes back, it registers a deficit (net-spending), and this deficit is matched by the sale of Treasury bonds. This sale…

ANG Traders

Forty years of private equity trading, and still learning.

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