Sat. 12/06/16 17:14 EDT
.post #167
[url=Newly Created Money]
Also, check out this video:
My (basic) understanding is this:
The government borrows money, by selling Treasury Bills (T-Bills), in an amount at least equal to its budgetary deficit plus expected interest. The Federal Reserve (the Fed) buys a significantly large quantity of government T-Bills on a regular basis (see Open Market Operations). Where does the Fed get the money to buy these T-Bills? By simply crediting their own account. This is new money. Every budgetary deficit represents an equivalent amount of additional new money that will be created. Since the government budget always contains a deficit, new money is always being created.
Anyone who receives a government check, be they employees and bureaucrats, welfare recipients, government contractors, foreign governments, or bailed-out corporations, are the early recipients of the new money. “The rich” are those early recipients who receive LARGE amounts of the new money (e.g. government contractors, foreign governments, bailed-out corporations, etc.).