How the Fed Finances U.S. Debt

Last week’s deal in Congress to lift the debt ceiling by means of early December might supply one other few weeks of partisan wrangling, however it gained’t remedy the deeper issues of funding the authorities. Such is the sorry state of America’s hand-to-mouth funds that White House officers have launched apocalyptic warnings about imminent monetary collapse, together with hallowed invocations to protect the full religion and credit score of U.S. Treasury debt.

The White House Council of Economic Advisers, run by Cecilia Rouse, stated: “If the United States were to default, tens of millions—including families with children, retirees, and veterans—would quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet.” Defense Secretary Lloyd Austin declared: “If the United States defaults, it would undermine the economic strength on which our national security rests.”

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