money for rescue

Miscellaneous Current Events
1

Where excatly will the 8 trillions for the rescue come from?

2

There are three ways for the US government to gather funds:

  1. Collect taxes
  2. Create money out of thin air through the Federal Reserve system
  3. Loan money from foreigners

Since tax rates are already painfully high and foreign lenders have become increasingly skeptical about the actual value of propping up the US government with their own funds, it’ll most likely be created by the central bank, the Fed. This will cause inflation (a hidden tax) and further market distortions to happen.

3

I thought foreigners were buying US treasury bonds?

4

That’s the state’s way of borrowing money from foreigners if you meant it that way.