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Government finance is not like household finances or even business finances. Most critically, the government controls the issuance of money. In the USA that's
by rmah 5y ago
Government finance is not like household finances or even business finances. Most critically, the government controls the issuance of money. In the USA that's done via the Federal Reserve. Which while not part of the government per-se, is sorta controlled by the government.
If the USA wishes maintain the US Dollar's position as the de-facto international currency, then it must maintain a negative balance of trade and high debt levels. Simple fact is that foreigners cannot use USD if they don't have any USD (in the form of cash or US Treasuries). There was once a hope that the Euro could rival the USD but that dream is dead in most people's eyes.
- toomanydoubts 5y agoYou seem to have moved from "the government controls the issuance of money" to "a private organization that controls the issuance of money is sorta controlled by the government" really fast. This are most definitely not the same thing.
- stephen_g 5y agoThe Federal Bank is only independent from the US Government in a very symbolic way. The system only exists as set out in US Legislation, the President of the US appoints all the board members and designates which is the chair, they all have to be confirmed by the US Senate, etc. etc. The "private ownership" in that member banks hold stock is also largely symbolic, given that they can't sell the stock and the stock doesn't give them any control, voting rights, etc.
- rtpg 5y agoCongress could, tomorrow, choose to just take control of the fed if it was being such a problem. They have done things to this effect many times in the past!