Reply #51: Of course we are borrowing it but that doesn't affect SS solvency. [View All]

[Statistical]

We are borrowing huge amounts of money.

We borrowed huge amounts of money when there was no reason to ("good times").

However you can't have a stimulus without deficit spending. You do understand that right.

In essence we are borrowing $120B so that people have $120B more in paychecks and hopefully spend it on food, gasoline, movies, ping pong tables, etc. That is the VERY definition of stimulus. I never said we are cashing SSA bonds today. Please re-read before making false claims.

This move puts $120B in workers hands and has $0.00 change in funding of SSA trust fund. Period.
Does it increase deficit? Yes to the tune of $120B.
Will we pay interest on that debt? Of course.

However that is the POINT OF A STIMULUS. YOU CAN'T STIMULATE AN ECONOMY VIA FISCAL POLICY WITHOUT CREATION OF DEBT. PERIOD.


"Do you really think the government can just print money?"
You really think the govt can't? What do you think quantitative easing is?

1) Govt issues debt
2) Fed creates money from nothing
2) Fed uses money to purchase debt.
What has just happened. That debt has been removed from supply and the money used to pay for it added to supply. "Printing money" except today it is all just 101010101 in a computer. Nobody actually prints anything. Hell they don't even print the bond before the debt remove it from supply.

You are aware the Fed directly manipulates money supply (M3) to control interest rates & (and indirectly encourages/discourages growth & inflation). To do that it MUST create and destroy money. You can't control interest rates without "controlling" (nice way of saying printing and destroying) money. This has been going on for roughly 50 years now so it isn't exactly a "new" concept.