We are not borrowing money from China…… What the Government is doing is creating its own financing to activate idle resources. Just like the private sector does.The Cowboy Economist (aka John Harvey Ph.D.)
In this video lesson, the Cowboy Economist explains how the federal government finances its deficits.
But before you watch this, you really need to watch his prior lesson.
The way the federal government creates money from nothing (as commercial banks do), seems foreign to most people at first.
His four main points in this video are:
- The government’s deficit is your surplus.
- The government creates money to finance deficits.
- Our government can’t be forced to default on debt in dollars.
- Printing money and deficits does NOT equal inflation.
And now, without further adieu, I bring you the Cowboy Economists lesson on how the public sector finances its deficits.