How The Federal Government Actually Spends скачать в хорошем качестве

How The Federal Government Actually Spends

Professor L. Randall Wray, on with Steve Grumbine of Real Progressives, explaining what actually happens when the Treasury spends. Wray goes through a simplified version that leaves out some intermediate steps, but these intermediate steps all cancel out of the final process, and the end result is exactly what he describes. (Sort of like how if I gave something to you to give to your cousin for me, the net result is that I gave something to your cousin). When the Treasury goes to spend, it tells its bank, the Federal Reserve, to credit (turn a number into a larger number) the reserve account of a bank (banks all keep "reserve accounts" with the Federal Reserve, which they use to settle payments), and then the bank credits the checking account of whomever is receiving the payment. So, the Fed credits a bank's reserves and a bank credits a customer's account. The reverse happens when the Treasury receives a tax payment. The Federal Reserve debits (turns a number into a smaller number) the reserve account of a bank, and the bank debits the checking account of whomever sent the payment. The net result here is that federal government spending adds to the quantity of reserves and deposits, while taxing decreases from it (as do bond sales, aka government "borrowing"), and it all happens via keystrokes. Or in short, the government does all of its spending by simply crediting bank accounts. There is no possibility of it being unable to make a payment, no possibility of it being forced into bankruptcy or default, no possibility of interest rates being forced up because of government deficits (on a floating exchange rate), and no purely financial limit on government spending, only real resource limits. If you want to know more details about the exact procedure, all of the steps, as well as citations to back it up, check out these links: The Greatest Myth Propagated About The Fed: Central Bank Independence (Part 2): http://neweconomicperspectives.org/20... Treasury And Central Bank Interactions: http://neweconomicperspectives.org/20... Treasury Debt Operations: https://papers.ssrn.com/sol3/papers.c... And see how this incorporates into a broader heterodox worldview on the nature of money, as contrasted with the establishment orthodox views: http://neweconomicperspectives.org/20... --- Watch the whole video here:    • Busting Myths about Economics with L Randa...   Follow Deficit Owls on Facebook and Twitter:   / deficitowls     / deficitowls   And follow our sister page, Modern Money Memes:   / modernmoneymeme     / modernmoneymeme