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But I'm referring to the MONETIZED debt, which is specifically debt that was never sold on a market to an investor, but rather sold to the federal reserve. The FED is purchasing debt, putting dollars in the United States Treasury to spend on bailouts.Originally Posted by jungle
Still not "out of thin air", but a debt they have promised to pay with your tax dollars in the future. They still sell this debt on the market in the form of treasuries. Taxpayers are also responsible for the interest, which should be about 600 billion a year on the outstanding debt of 12+ trillion.
How did the federal reserve get those dollars?
The same way I create this message; literally, with a few keyboard strokes and mouse clicks. This is why lack of interest on the part of INVESTORS to buy treasurys will not necessarily force the federal government to curtail spending.