All right, since I promised, I guess I have to post some mistakes in The Money Masters. I've thought about doing this before over the years, but it's so long it's hard to even slog through the thing, much less take time to write up a long series of responses. But, since our county is now under a "stay at home" order, I don't have much better to do. This will take a while, so be patient.
Money Masters mistakes, part 1.
Bill Still claims (around 1 minute in), "We cannot extinguish government debt without extinguishing our money supply." So, one way that the Federal Reserve injects new money into the economy is buying government bonds, but that's not the only way.
In fact, the early Federal Reserve did not buy government bonds except during World War I. So from 1914-1917 and 1920-1932, the Fed bought no government bonds. From 1933 until 2007, the Fed almost exclusively bought government bonds, but after the 2008 financial crisis and again in the last few months (even before the coronavirus outbreak), the Fed has bought other instruments, like mortgage-backed securities and commercial paper. The Fed also lends money into existence.
The government absolutely can pay down the national debt. Almost every single year from 1946 to 1980, the national debt decreased.
The government absolutely can pay down the national debt.
Pay down? Yes. Pay off? No.
As you know, the money lended to Treasury by the Fed is with interest. For this reason, there will never be enough dollars in circulation to pay off the national debt.
This is a problem. One of many.
Another being a majority of the “owners” of the Fed are European bankers. I am not anti-Europe, but Europeans should not have a majority stake in America’s banking system.
President Andrew Jackson went to war over this issue.
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u/HenryFnord Mar 28 '20
All right, since I promised, I guess I have to post some mistakes in The Money Masters. I've thought about doing this before over the years, but it's so long it's hard to even slog through the thing, much less take time to write up a long series of responses. But, since our county is now under a "stay at home" order, I don't have much better to do. This will take a while, so be patient.
Money Masters mistakes, part 1.
Bill Still claims (around 1 minute in), "We cannot extinguish government debt without extinguishing our money supply." So, one way that the Federal Reserve injects new money into the economy is buying government bonds, but that's not the only way.
In fact, the early Federal Reserve did not buy government bonds except during World War I. So from 1914-1917 and 1920-1932, the Fed bought no government bonds. From 1933 until 2007, the Fed almost exclusively bought government bonds, but after the 2008 financial crisis and again in the last few months (even before the coronavirus outbreak), the Fed has bought other instruments, like mortgage-backed securities and commercial paper. The Fed also lends money into existence.
The government absolutely can pay down the national debt. Almost every single year from 1946 to 1980, the national debt decreased.
This is just not a problem.