Big thread on paying back the debt going on. And based on that, I'd say most here don't actually understand our money supply. Several on the forum have assured us multiple times over that they're actually students of economics and are well versed, so this should be fun. We'll get lots of different perspectives, I'm sure.

Below are some statements about the Fed and our monetary system that may be true or false. If you have to google these statements to see if they're true or false, you probably don't really understand our money supply. Again, I hope this is fun because our system is CRAZY to understand. So please, without Google, label these true or false and then explain your reasoning. And refrain from judging, hope it's educational more than anything.

True or False:
(Edit-They are all effectively TRUE except one).

• Our money supply is not all or even partially backed by assets, such as gold or similar.
  
• The Fed creates money out of nothing.
  
• Our entire monetary system is based on the Fed's debt issuance creating "money".
  
• If the US pays off its debts the money supply contracts.
  
• A contracting money supply will decrease easy loans and drive-up interest rates.
  
• If the US paid off its entire debt, our current form of money would all but vanish.
  
• The reality with our current system is (a) that we will always be in an endless cycle of revolving debt, and (b) by that, ever increasing at this point.
• Increasing the money supply is inflation.
  
• The government finds it easier for their taxpayers to pay its debt obligations via inflation rather than rein in spending or increased taxes.
  
• Effectively, increasing the money supply aka inflation is its own form of tax.
  
• Any "dent" we put in the national debt will be temporary, the forces of debt and for debt are too strong without a drastic change in the system.
  
• If our society is rapidly increasing in population, the contracting money supply will hurt growth and opportunity.
  
• We don't need to pay down the debt because the money supply is where it needs to be.
  
• The Fed not only creates money for the US but the Fed creates money for other countries via debt, debt which is backed by the US, which means its backed by taxpayers.

Thanks all, have fun and may the odds forever be in your favor.

This reminds me of the aggy joke about the farmer who raised watermelons at a cost of $2 each and sold them for $1 apiece. When asked by his accountant how he plans to recoup his loss, the aggy said he plans to sell twice as many watermelons next year.

It sounds like the ags are running things in DC,

Wow, given the lack of responses, makes me wonder about the brain trust here. Been my experience that the fed and our debt based money supply usually stirs up lots of comments for "economics" minded folk. I've edited the OP to make it easier.

ABC BEAR said:

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This reminds me of the aggy joke about the farmer who raised watermelons at a cost of $2 each and sold them for $1 apiece. When asked by his accountant how he plans to recoup his loss, the aggy said he plans to sell twice as many watermelons next year.

It sounds like the ags are running things in DC,

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Yep, this is the money supply when bankers create and run your system.

I'm sorry but you did not come up with these questions. You copy pasted, and then pretended to know more about the economics of the dollar than everyone else. You got these from a similar source as google, but then didn't have the intellect to convert these to stand alone questions that make sense.

For example, where do you get your claim that if we paid down the national debt, the (?) dollar (what does form of money mean) would vanish as we know it? Why do you think we will never fully pay off our debt? Are you aware of what is being talked about, when the "national debt" is being discussed?

If you had asked questions that were real, had a point, and probably fewer, you might get a better response. As it stands, some are too vague to answer.

The actual problem is a paradox.

The more deficit spending fails, it only leads to more deficit spending. That's the paradox.

Government spending is a response to economic weakness which actually worsens the situation by making the economy more inefficient and rigid, leading to a continuous cycle of wasteful spending. Since it continuously fails, demand for safety and liquidity in financial markets remains high due to perpetuating the cycle of excessive borrowing and spending.

Its like a boat full of holes sinking and trying to patch those holes up. Eventually there will be too many holes and it will sink.

Porteroso said:

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I'm sorry but you did not come up with these questions. You copy pasted, and then pretended to know more about the economics of the dollar than everyone else. You got these from a similar source as google, but then didn't have the intellect to convert these to stand alone questions that make sense.

For example, where do you get your claim that if we paid down the national debt, the (?) dollar (what does form of money mean) would vanish as we know it? Why do you think we will never fully pay off our debt? Are you aware of what is being talked about, when the "national debt" is being discussed?

If you had asked questions that were real, had a point, and probably fewer, you might get a better response. As it stands, some are too vague to answer.

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False. I absolutely came up with these questions. I did not copy and paste it.
I like to chat about the FED and our crazy monetary system. Yes all of these points are discussed by others, the thoughts aren't exactly new.
I stopped reading your diatribe after your first false accusation. Will read when you apologize for being stupid.

TinFoilHatPreacherBear said:

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Porteroso said:

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I'm sorry but you did not come up with these questions. You copy pasted, and then pretended to know more about the economics of the dollar than everyone else. You got these from a similar source as google, but then didn't have the intellect to convert these to stand alone questions that make sense.

For example, where do you get your claim that if we paid down the national debt, the (?) dollar (what does form of money mean) would vanish as we know it? Why do you think we will never fully pay off our debt? Are you aware of what is being talked about, when the "national debt" is being discussed?

If you had asked questions that were real, had a point, and probably fewer, you might get a better response. As it stands, some are too vague to answer.

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False. I absolutely came up with these questions. I did not copy and paste it.
I like to chat about the FED and our crazy monetary system. Yes all of these points are discussed by others, the thoughts aren't exactly new.
I stopped reading your diatribe after your first false accusation. Will read when you apologize for being stupid.

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If you did come up with these questions, they are just random things rattling around in your brain. If the point is to educate sicem, I'm all for that, but don't do it with leading questions. Just make your statements, your assertions. Long posts don't do well here. By the way, I did directly respond to 3 of your fake questions, and guess what you did? "didn't read." Nobody else is directly responding. Beggars can't be choosers. Engage or don't.

Porteroso said:

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TinFoilHatPreacherBear said:

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Porteroso said:

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I'm sorry but you did not come up with these questions. You copy pasted, and then pretended to know more about the economics of the dollar than everyone else. You got these from a similar source as google, but then didn't have the intellect to convert these to stand alone questions that make sense.

For example, where do you get your claim that if we paid down the national debt, the (?) dollar (what does form of money mean) would vanish as we know it? Why do you think we will never fully pay off our debt? Are you aware of what is being talked about, when the "national debt" is being discussed?

If you had asked questions that were real, had a point, and probably fewer, you might get a better response. As it stands, some are too vague to answer.

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False. I absolutely came up with these questions. I did not copy and paste it.
I like to chat about the FED and our crazy monetary system. Yes all of these points are discussed by others, the thoughts aren't exactly new.
I stopped reading your diatribe after your first false accusation. Will read when you apologize for being stupid.

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If you did come up with these questions, they are just random things rattling around in your brain. If the point is to educate sicem, I'm all for that, but don't do it with leading questions. Just make your statements, your assertions. Long posts don't do well here. By the way, I did directly respond to 3 of your fake questions, and guess what you did? "didn't read." Nobody else is directly responding. Beggars can't be choosers. Engage or don't.

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Of course they are just random thoughts rattling around in my brain. I thought these "random thoughts" relevant to discussing the debt and our actual ability to get out of "debt" as a nation, and what that would look like to our money supply.
I don't claim to know everything about the fed and smarter people than me argue whether or not we even need to pay the debt down.
As for reading your original response, like I said, not going past your insulting accusation. I may enjoy hyperbole and amping people up, especially progressive drones, but I don't claim or copy pasta the works of others without stating it.

Doc Holliday said:

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The actual problem is a paradox.

The more deficit spending fails, it only leads to more deficit spending. That's the paradox.

Government spending is a response to economic weakness which actually worsens the situation by making the economy more inefficient and rigid, leading to a continuous cycle of wasteful spending. Since it continuously fails, demand for safety and liquidity in financial markets remains high due to perpetuating the cycle of excessive borrowing and spending.

Its like a boat full of holes sinking and trying to patch those holes up. Eventually there will be too many holes and it will sink.

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You are overlooking the growth in the US. We are providing more services for more people. It is not static. The Federally employed size has been pretty consistent since 1984. The amount to contractors has gone up dramatically. To cut spending we will need to cut services, the two go together. Believe it or not every Agency has a mission. Every employee has a job description. To cut them, you are cutting the service, which is fine but we need to know what we are cutting and how it will covered?

I agree we need to cut spending, question is what. At least it is on the table.

I've asked multiple finance guys over the last few years, "what happens when we can't pay the interest on the debt?" and I've gotten mostly vague answers which tells me that no one really knows. Obviously, default is the most likely outcome. Perhaps that's the plan anyway? Hello CBDC. Once that happens, they control every aspect of our lives. We won't be able to buy anything without the govt knowing about it.