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Curious how local and state governments can face “fiscal chaos” while debt issues by the federal govt. is highly desirable. People say governments run deficits
by thoughtstheseus 6y ago
Curious how local and state governments can face “fiscal chaos” while debt issues by the federal govt. is highly desirable. People say governments run deficits during economic downturns (which is true) but in the US local and state spending is more pro-cyclical.
- mylons 6y agoCities can’t print money
- xtacy 6y agoDidn't the Fed say it will buy up to $500B of municipal bonds as part of the new QE program?
- mylons 6y agoNot sure, but the Fed is still in control here. They will buy as they see fit. Where as SF would almost certainly love to issue themselves some debt to pay these bills right now.
- thoughtstheseus 6y agoI’m not an expert in this area but I don’t think the fed funds operations by printing money. They issue debt which people exchange for money. Although lately the fed just buys that debt back with printed money so...
- mylons 6y agoThey create money via debit issuance. You’re not wrong, but they in fact just created 3T+ dollars that kinda went everywhere unaccounted for. It’s just easier to say they can print money because the common man doesn’t quite understand how debt translates into new money.
- quxpar 6y agoYou're like halfway through the expanding-brain meme. It ends with 'actually, they just add a few zeroes to a few balance sheets, printers don't need to be involved'. All this theory around debt is a rationalization of the money printer.
- mylons 6y agoHaha o/
- thoughtstheseus 6y agoOr cut off a few zeros and slap on a new name like Iran just did.