The Skeptical Optimist: An $800 billion freebie, hidden in the national debt: "For-what-it's-worth fact about paying back the debt:
The present value of paying back all of the debt principal is exactly equal to the present value of never paying back one penny of the principal (i.e., of paying interest forever and ever)...
Once a quarter, I like to update this pie chart showing who owns the national debt—mainly so you and I can keep our politicians honest. I'll explain the $800 billion freebie below...
click to enlarge
Private sector owners of the debtThis time I added a breakout of the private sector's ownership: insurance companies, pension funds, and others. Well hidden inside the private sector's portion (until now) is $800 billion of treasury securities that, in essence, is merely a token entry on the asset side of the Federal Reserve's balance sheet. It's the cumulative result of the Fed's so-called money printing operations: the bonds purchased by the Fed from the public, using brand new money the Fed has the authority to create out of "thin air" (...to the unjustified horror of many). Private sector owners of the debtThis time I added a breakout of the private sector's ownership: insurance companies, pension funds, and others. Well hidden inside the private sector's portion (until now) is $800 billion of treasury securities that, in essence, is merely a token entry on the asset side of the Federal Reserve's balance sheet. It's the cumulative result of the Fed's so-called money printing operations: the bonds purchased by the Fed from the public, using brand new money the Fed has the authority to create out of "thin air" (...to the unjustified horror of many). "
The present value of paying back all of the debt principal is exactly equal to the present value of never paying back one penny of the principal (i.e., of paying interest forever and ever)...
Once a quarter, I like to update this pie chart showing who owns the national debt—mainly so you and I can keep our politicians honest. I'll explain the $800 billion freebie below...
click to enlarge
Private sector owners of the debtThis time I added a breakout of the private sector's ownership: insurance companies, pension funds, and others. Well hidden inside the private sector's portion (until now) is $800 billion of treasury securities that, in essence, is merely a token entry on the asset side of the Federal Reserve's balance sheet. It's the cumulative result of the Fed's so-called money printing operations: the bonds purchased by the Fed from the public, using brand new money the Fed has the authority to create out of "thin air" (...to the unjustified horror of many). Private sector owners of the debtThis time I added a breakout of the private sector's ownership: insurance companies, pension funds, and others. Well hidden inside the private sector's portion (until now) is $800 billion of treasury securities that, in essence, is merely a token entry on the asset side of the Federal Reserve's balance sheet. It's the cumulative result of the Fed's so-called money printing operations: the bonds purchased by the Fed from the public, using brand new money the Fed has the authority to create out of "thin air" (...to the unjustified horror of many). "
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