Re:Federal Reserve balance sheet trends
by xyzzyz on Thursday April 23, 2020 @10:37AM
(#22956496)
> Suppose now, that the Federal Reserve buy all those bonds. Who is that money owned to? who receive the dividends of those bonds?
To Federal Reserve of course, which will receive the coupons. To be sure, taxpayers will pay the principal and interest down the line.
> In 50 years there is not infrastructure left or new technologies but the public debt is zero. Are the children rich or poor?
Lack of government-built infrastructure is seen. What is unseen is all the other things that the money saved on government-paid infrastructure paid for.
Money is a claim on resources in the economy, and if the government doesn’t claim its share and use it to build infrastructure, these resources do not disappear. Something else uses them.
To Federal Reserve of course, which will receive the coupons. To be sure, taxpayers will pay the principal and interest down the line.
> In 50 years there is not infrastructure left or new technologies but the public debt is zero. Are the children rich or poor?
Lack of government-built infrastructure is seen. What is unseen is all the other things that the money saved on government-paid infrastructure paid for.
Money is a claim on resources in the economy, and if the government doesn’t claim its share and use it to build infrastructure, these resources do not disappear. Something else uses them.