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The national debt refers only to the debt of the federal government. Separately, statistics are also kept on the private debt within a country - in the US, that

The national debt refers only to the debt of the federal government. Separately, statistics are also kept on the private debt within a country - in the US, that's about $27 trillion. For comparison, the US national debt is $23 trillion. People care more about the national debt because it is, in a sense, owed by everyone.

SubiculumCode 7y ago
But does it require the same bond issuances?
- comicjk 7y ago
  Nations, companies, states, towns, nonprofits, and all kinds of other groups can issue bonds, which are then bought and traded on markets in pretty much the same way. There's nothing special about being able to issue bonds - the market is regulated, but the main requirement is simply that people expect you to pay them back. The biggest difference between bond issuers is that greater trust leads to lower interest rates and thus cheaper borrowing. For example, the US government sells bonds with lower interest rates than any company - buyers demand more return for a corporate bond, because a corporation is more likely to go bust.
  - SubiculumCode 7y ago
    I am asking about the whether or not thr money created by bank loan and federal fiscal spending is ultimately created through the same process at the Federal Reserve.
    - RobertoG 7y ago
      I think your confusion comes from thinking there is only one type of money. For simplification, there are two kid of moneys, the 'government money' and the 'lending money' (my terminology). Government money would be: cash and reserves. Reserves come from two sources (both are the government) the Central Bank and the treasure. So, when the treasure spend in the economy is creating government money. Also, when the central bank 'give' reserves to the private banks is creating money. When the govenrment tax is destroying money and when the Central Bank retire reserves of the system is destroying money. The 'lending money' is created by the private banks when lending, but it disappears when the money is payed back. This is a different kind of money, a less 'real' money if you want. You can find more information in many places. For instance: https://monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf https://monetary.org/wp-content/uploads/2016/03/money-creati...
      - SubiculumCode 7y ago
        Thank you!

SubiculumCode 7y ago

But does it require the same bond issuances?

comicjk 7y ago
Nations, companies, states, towns, nonprofits, and all kinds of other groups can issue bonds, which are then bought and traded on markets in pretty much the same way. There's nothing special about being able to issue bonds - the market is regulated, but the main requirement is simply that people expect you to pay them back. The biggest difference between bond issuers is that greater trust leads to lower interest rates and thus cheaper borrowing. For example, the US government sells bonds with lower interest rates than any company - buyers demand more return for a corporate bond, because a corporation is more likely to go bust.
- SubiculumCode 7y ago
  I am asking about the whether or not thr money created by bank loan and federal fiscal spending is ultimately created through the same process at the Federal Reserve.
  - RobertoG 7y ago
    I think your confusion comes from thinking there is only one type of money. For simplification, there are two kid of moneys, the 'government money' and the 'lending money' (my terminology). Government money would be: cash and reserves. Reserves come from two sources (both are the government) the Central Bank and the treasure. So, when the treasure spend in the economy is creating government money. Also, when the central bank 'give' reserves to the private banks is creating money. When the govenrment tax is destroying money and when the Central Bank retire reserves of the system is destroying money. The 'lending money' is created by the private banks when lending, but it disappears when the money is payed back. This is a different kind of money, a less 'real' money if you want. You can find more information in many places. For instance: https://monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf https://monetary.org/wp-content/uploads/2016/03/money-creati...
    - SubiculumCode 7y ago
      Thank you!