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If you have a billion dollars in the U.S you can park it in treasuries and make millions and outsource the income generation to the government's tax collectors.

If you have a billion dollars in the U.S you can park it in treasuries and make millions and outsource the income generation to the government's tax collectors. Meanwhile, in China, the government just prints money electronically when they need it and billionaires have to be clever about where to park their billions to earn a decent return. That need to be clever contributes to creating useful capital that increases the wealth of society generally instead of just adding to the interest bill on the national debt.

sigstoat 7y ago
> instead of just adding to the interest bill on the national debt. the billionaires are lowering the interest bill as they compete to purchase treasuries. (the money is borrowed from whoever will accept the lowest interest for it. see https://www.treasurydirect.gov/instit/auctfund/work/work.htm https://www.treasurydirect.gov/instit/auctfund/work/work.htm under "Bidding".)
anticodon 7y ago
> Meanwhile, in China, the government just prints money electronically when they need it The only country in the world that just prints money when they need it is USA. No other country can do it — it'll just cause hyperinflation. China is not an exception. They can't print US dollars. And if they would print more Yuan, it doesn't mean that China billionaires would be able to buy more houses in LA - the exchange rate of Yuan to dollar will simply drop and they will be able to buy exactly the same amount of goods in US as before. USA can print almost unlimited amount of money because they control almost all the world and bend most of the governments to buy US treasuries. This is why there're US military bases in many countries and if some country decide to stop accepting US dollar for foreign trade, the next day it's invaded by US military. Although many people predict that this uncontrollable printing of US dollar will cause US economy to collapse sooner or later. You simply can't do that forever.

sigstoat 7y ago

> instead of just adding to the interest bill on the national debt. the billionaires are lowering the interest bill as they compete to purchase treasuries. (the money is borrowed from whoever will accept the lowest interest for it. see https://www.treasurydirect.gov/instit/auctfund/work/work.htm https://www.treasurydirect.gov/instit/auctfund/work/work.htm under "Bidding".)

anticodon 7y ago

> Meanwhile, in China, the government just prints money electronically when they need it The only country in the world that just prints money when they need it is USA. No other country can do it — it'll just cause hyperinflation. China is not an exception. They can't print US dollars. And if they would print more Yuan, it doesn't mean that China billionaires would be able to buy more houses in LA - the exchange rate of Yuan to dollar will simply drop and they will be able to buy exactly the same amount of goods in US as before. USA can print almost unlimited amount of money because they control almost all the world and bend most of the governments to buy US treasuries. This is why there're US military bases in many countries and if some country decide to stop accepting US dollar for foreign trade, the next day it's invaded by US military. Although many people predict that this uncontrollable printing of US dollar will cause US economy to collapse sooner or later. You simply can't do that forever.