Dave JohnsonApr 1, 2024

1) When people say the US/UK won't be able to "pay off" debt, what do they think those debts have to be paid off WITH? Gold bars?

Govts stopped hoarding and borrowing gold long go - economics textbooks haven't figured that out.

2) When people say govts need "revenue" before they can build roads, provide health care or bombs etc, ask them where they think banks get the money they loan out?

Hint: banks get the money out of thin air. That's what "modern money" is.

#MMT #modernmonetarytheory

Show threadMmmmdonut
@dcjohnson that’s not how it works. Banks don’t get money out of thin air. The federal reserve is the entity that creates and destroys currency as needed, mostly to control inflation.
Apr 1, 2024 at 11:42amWeb
Show threadDave JohnsonApr 2, 2024

@Mmmmdonut

Yes, that is how it works. Banks "create" money out of thin air.

https://www.bankofengland.co.uk/explainers/how-is-money-created

How is money created?

Most of the money in the economy is created by banks when they provide loans.