I’ve once heard that the USA owns most of its debt to itself, how is that possible? How can you owe debt to yourself?
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Our money is created based on a promise to pay it back with interest, so it’s not actually based on anything besides a promise.
As an example, when you go to the bank and take out a loan to buy a house, the bank just types that money into existence, and you pay it back with interest. It doesn’t actually exist until you pay it.
It’s the same for the Federal Government. It borrows/creates money with a promise to pay it back with interest. It borrows that money from the American people.
It gets interesting when you realize that if we only have money because we borrowed it, and everything we borrow has interest, clearly it’s impossible to pay back. Just something to consider every time you hear someone complain about national debts.
This monetary system is also the reason infinite growth is an absolute requirement under our current capitalist system.
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