Jackson asked who we owed the money to, and I wonder if it was just a matter of printing more money to float around, or if debt was actually owned by banks or foreigners, which might make a difference if it is.
To pay for deficit spending the Treasury borrows currency by issuing a bond. A bond is an IOU. It's a piece of paper with numbers printed on it that says loan me a trillion dollars today and I promise that over a ten year period I will pay you back that trillion dollars. Plus interest.
But...Treasury bonds happen to be our national debt. The Treasury then holds a bond auction. And the world's largest banks show up and compete to buy part of our national debt and make a profit on it by earning interest.
Through a shell game called open market operations, the banks get to sell some of those bonds to the Federal Reserve, at a profit. How does the Federal Reserve pay the bonds? The Federal Reserve opens its 'checkbook' and writes bad, bogus, counterfeit checks that should bounce because they're drawn on an account that always has nothing in it. Here the Federal Reserve is committing fraud.
To steal a quote from the Boston Federal Reserve's ''Putting it Simply", they say that ''When you or I write a check, there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check, there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.”
Then we pay tax to the IRS who then turns it over to theTreasury so the Treasury can pay the principal plus the interest on those bonds that were purchased from banks by the Federal Reserve with a check that was drawn on an account that had nothing in it.
Of course, the Federal Reserve is not Federal. It has stock holders. There is no federal agency that has stock holders. Now, what is a stock holder? A share of stock represents a share of ownership in a corporation. So, the stock holders are the owners of the corporation. Therefore, the Federal Reserve is a private corporation with owners. For reference, you may check their site. It specifically states that the stock holders receive an annual dividend of not more than 6%. Now, we know that the stock in the Federal Reserve was originally issued to the largest banks in the United States. With mergers and acquisitions through the years, you can't actually trace who owns the stock in the Federal Reserve. That's a very closely guarded secret. The best guess would be that they are those primary dealers. The banks that get to make a profit by selling part of our national debt, those bonds, to the Federal Reserve who buys them with a check that is drawn from an account with nothing in it. Then we pay tax to pay the principal and the interest on those bonds so that the Federal Reserve can pay the banks not more than a 6% dividend. This is purposely complex.
, it's all some huge sword of damocles over my head ,while we toast each other about a great economy....
