money is a weird topic - i don't know of another topic where people will say "i don't know much about that" and at the same time have an inviolable attachment t

money is a weird topic - i don't know of another topic where people will say "i don't know much about that" and at the same time have an inviolable attachment to ideas like barter came first (it didn't, debt came first). The other weird thing is attachment to models - and "schools of economic thought" more generally, when the monetary system operates under a system of legal constraints which describe exactly what is permitted to happen. We don't need macro economic models to describe the process by which banks lend money - we can literally just read the law, and what the law describes, is quite different from the theoretical models. The various schools of economic thought are remarkably uninterested in exploring the practical applications of banking. It's like programming computers to perform a task by speaking via an llm and pretending the generated code and the cpu architecture it runs on are unimportant. Let me give a concrete example, treasury bond issuance. You or i cannot buy bonds from the government, a subset of 30 approved banks can. They don't buy them in dollars, the buy them using reserves, a kind of money that we can't use. They legally MUST buy these, the idea that a government debt won't be covered by a bond is a technical impossibility (it's also technically unnecessary but that's a whole other kettle of fish). The auctions happen every couple of days roughly but to ensure the panel banks do buy them, the treasury buys back previous bonds from them to give them the reserves to buy the new issuance. If you've read this far you should instead now go to the fed and legislation.gov and read from an authoritative source, not from a random comment on the internet. And especially not from an economist - they'll tell you the government borrows from the public which is just a model to simplify a complex topic, the legislation is quite clear about what exactly is permitted and what a reverse repo is.