workerONE
@workerONE@lemmy.world
- Comment on Where does the revenue gathered from taxes go and what is national debt? 1 week ago:
Really interesting. I just read the Bank of England’s companion article: Money in the modern economy, an introduction bankofengland.co.uk/…/money-in-the-modern-economy…
- Comment on Where does the revenue gathered from taxes go and what is national debt? 1 week ago:
I didn’t consider that you could still classify banking as fractional reserve banking even though there are no fractional reserve banking requirements. In my mind the concept was one of regulatory oversight.
Do you think that when a bank loans money to another bank they are creating money out of thin air? If they can do that then why do they need to borrow money?
I think you’re doing a good job interpreting and explaining modern monetary theory, I just don’t agree with all of it, although I agree with the concept.
- Comment on Where does the revenue gathered from taxes go and what is national debt? 1 week ago:
You’re right that that article does talk about banks creating money and it’s true that banks can create money when they lend more than they have in reserves and assets. But my larger point was that although people can spend the money, to the bank it’s a liability when they can’t cover withdrawals during a bank run. If they were liquidated they would have a negative balance in the amount that they had loaned out or created and they would now have a liability .Also, you mentioned fractional reserve banking but that no longer exists. It ended around 2020 when the government changed regulations and no longer requires banks to hold any ratio of reserves to debt.
- Comment on Where does the revenue gathered from taxes go and what is national debt? 1 week ago:
When a bank issues a loan it creates a credit in the borrower’s account. When the borrower withdraws/transfers the money from their account the money comes from the bank’s reserves. The bank’s reserves consists of deposits and other liquid assets. The money in the bank’s reserves started its life by being created by the federal government. You may argue that the bank is loaning money that it does not hold in reserves, but for lack of a better description, this is a huge liability for the bank that can create insolvency issues (bank run). For this reason, I do not agree that banks create money when they issue loans, since in the end their loans must be paid from the reserves. These reserves are not created by the bank.
- Comment on Where does the revenue gathered from taxes go and what is national debt? 1 week ago:
Money collected from taxes is basically recorded in a ledger / account by the Treasury. Some people look at this as the end of the lifespan of that money or the destruction of that money.
Money begins its life by being spent by the federal government. They essentially create money with the press of a keystroke (granted they are spending funds which are approved by Congress and allocated for projects), the money credits a Treasury account, then they transfer it / spend it which puts the money into circulation.
The federal government does not NEED the money you pay in taxes to find their spending. Money does not come from people. It is created solely by the treasury. The federal government WANTS to limit the amount of money put into circulation (compared to the amount thru collect from taxes) in order to prevent runaway inflation.
The federal government does not need to have any debt. But they chose to because creating so much money that they can pay off all debt would create inflation.
The federal government believes that balancing is important. They want the amount of goods and services that America exports to the test of the world to match the amount Americans import. Each year there is a deficit which means that America receives more goods and services from other countries than it exports. In order to balance this, each year the Treasury issues bonds equaling the amount of the year’s trade deficit. We don’t have to do this but we choose to because we believe it will create financial stability.
The bonds that are issued by the US Treasury are essentially us debt, which means that the US collects money and gives a promise to make interest payments and to repay those bonds when they are due. This is where US debt comes from. It is from bonds that are issued by the Treasury and which will come due to be paid at the end of the Bond’s term.
BTW, banks essentially act like a store for money, where their job is to not run out of money. Their biggest fear is a bank run where everyone tries to withdraw at the same time. Deposits that are made, for example into checking accounts, are added to the bank’s reserves but can be used for anything from lending to investing to paying withdrawals. When you make a deposit at the bank, the bank creates an entry in their Ledger saying that they owe you that amount of money. That money is a liability for them (they must pay it to you) and they simultaneously credit their reserves.
- Comment on Consequences will never be the same... 1 week ago:
- Comment on It's the truth! 2 weeks ago:
Shitposting is an artform
- Comment on It's the truth! 2 weeks ago:
Really blew my mind when I found out that red onions are just ripe white onions.
- Comment on Anon is British 5 weeks ago:
Anon dies to a violent Muslim?
- Comment on [FRESH ALBUM] De La Soul - Cabin in the Sky 1 month ago:
Damn they have some collabs with amazing artists on here
- Comment on Native Americans? 1 month ago:
Hmm yeah I obviously haven’t figured that out yet.
- Comment on Native Americans? 1 month ago:
Five generations would be 10 people. If one of them was native American, their descendant to be 1/10 native American.
- Comment on MAGA 1 month ago:
For anyone who isn’t a big always sunny fan, in the original scene Frank is holding two glasses of lemon water and he says “so anyway, i started fasting”
- Comment on Dyslexia 1 month ago:
It’s a gif that changes when you look away!
- Comment on I hate it when people use pictures showing the condiments only on top of a hot dog. 1 month ago:
Yes but you have to put the bread on top and bottom not just on the sides like some people do because then everything falls out
- Comment on I hate it when people use pictures showing the condiments only on top of a hot dog. 1 month ago:
You monster!
- Comment on I hate it when people use pictures showing the condiments only on top of a hot dog. 1 month ago:
You’re eating hot dogs vertically starting with eating all the condiments and then working your way down
- Comment on I hate it when people use pictures showing the condiments only on top of a hot dog. 1 month ago:
You just jam the whole column in your mouth and bite. Do you eat sandwiches top down too? Complain that you had to eat through bread and lettuce to get to the meat?
- Comment on MAGA are undisciplined twat's. As the GOP turn up the heat on the pressure cooker, the play isn't to revolt. Its to let MAGA turn. They will eat themselves. 1 month ago:
Living rent free in your head!
- Submitted 1 month ago to [deleted] | 0 comments
- Comment on Bats taxonomy 2 months ago:
Do species really exist? Aren’t we all just vibrations in the cosmos?
- Comment on Does anyone else notice an up tick in hostility on Lemmy lately? 2 months ago:
Are you aware that there are people in this world that have a severe medical condition which causes them to be that way? My mother for instance is one of those people. She is a truck driver that has bad knees and a bad back from driving the truck but you probably do not care about that case either. Oh well I am not one of those people I am 6’4" 245lbs and I exercise every day. I would love to see you say something like to my mother in front of me. Probably never happen though you are probably just an internet tough guy. I doubt very seriously you would say that to someones face. Just my thought.What do you think. Oh I am sorry you probably do not have a brain. I on the other hand will be happy to buy you a plane ticket to come here and see if you have the nerve to say that to someone I know.
- Comment on She's a pain in my rear but she keeps me straight! 2 months ago:
Isn’t this a wife good because she’s helping him?
- Comment on Priorities 2 months ago:
This looks familiar. What comic is it from??
- Submitted 2 months ago to [deleted] | 10 comments
- Comment on oui oui 3 months ago:
- Comment on I ain't got no Dino in this race. 3 months ago:
I watched this video a few weeks ago. It’s fantastic youtu.be/dYHEwTQHt24
- Comment on I ain't got no Dino in this race. 3 months ago:
Maize can’t grow naturally because of the husks, it needs humans
- Comment on You gotta rizz 'em 3 months ago:
You think it’s an advertisement? It’s not. Is there a better example of incompetence?
- Comment on You gotta rizz 'em 3 months ago:
I bought a Tylenol bumper sticker for my car
