Why Does the Government Borrow When It Can Print?
In the first seven months of Fiscal Year (FY) 2024, net interest (payments minus income) on the federal debt reached $514 billion, exceeding spending on both national defense ($498 billion) and Medicare ($465 billion). The interest tab also exceeded all the money spent on veterans, education, and transportation combined. Spending on interest is now the second largest line item in the federal budget after Social Security and the fastest growing part of the budget, on track to reach $870 billion by the end of 2024.
According to the Congressional Budget Office, the federal budget deficit was $857 billion in the first seven months of fiscal year 2024. In effect, the government is borrowing at interest to pay the interest on its debt, compounding the debt. For the lender, it’s called “the miracle of compound interest” – interest on interest compounds exponentially. But for the debtor, it’s a curse, compounding like a cancer to the point of devouring assets while still growing the debt.
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The government cannot create currency with the current structure that keeps banking (fiat currency creation) and politics district. Government gets its funding through the real economy's productivity or through the means of borrowing.
If the economy was to be empowered such that real economic growth became sustainable, deficits and taxation rates could be lowered with some taxes being fully eliminated. In order to arrive here, debt-free liquidity would be required to drive the referenced real growth. The creation, introduction and the circulation of debt-free currency is 100% a free market responsibility because debt-free medium can now ONLY enter circulation safely from the bottom-up. There is NO TOP-DOWN method of achieving this.
The humongous debt bubble MUST safely leak and cannot be allowed to POP ! A POP would be devastating.
This has always been a mystery to me but the answer I believe is the Jekyll Island meeting between government and the banksters in 1913.