Why Issue Treasuries?

[Martin Hash]

The U.S. has $20 trillion in debt. Most of that debt is on continuous rollover, like imagining you own pink elephants you never ride. Except for preconceptions of accounting, there is no reason to issue pink elephants, I mean Treasuries, when the U.S. wants to print money. What's the difference if there's more pink elephants or not?

The reason is massive wealth accumulation by "investing" in pink elephants. Capitalism has this weird aspect that builds no roads, constructs no schools, explores no space, but instead increases an imaginary herd of pink elephants, which does nothing but create an aristocracy. Nothing positive results from exchanging pink elephants for liberty. In fact, it seems like the worst possible exchange.

Most-liberty-to-most-people is achieved by printing money for economic purposes rather than creation of royalty.

[Hastur]

To most people It's just a low risk /low yield parking spot for money. If you have huge amounts of money that needs to be invested somehow it's convenient.

That doesn't answer the question though. Why Issue them? It would be better if all that money went to some other investments.

My theory is that it's a way for the government to spend money that should be saved for something else, like pensions or SS. They take that money and put some pink elephants in their stead.

Which agencies own the most Treasurys? Social Security, by a long shot. Here's the detailed breakdown as of December 31, 2016.

Social Security (Social Security Trust Fund and Federal Disability Insurance Trust Fund) - $2.801 trillion
Office of Personnel Management Retirement - $888 billion
Military Retirement Fund - $670 billion
Medicare (Federal Hospital Insurance Trust Fund, Federal Supplementary Medical Insurance Trust Fund) - $294 billion
All other retirement funds - $304 billion
Cash on hand to fund federal government operations - $580 billion.

Debt Held by the Public. The public holds the rest of the national debt ($14.7 trillion). Foreign governments and investors hold nearly half of it. One-fourth is held by other governmental entities. These include the Federal Reserve, as well as state and local governments. Fifteen percent is held by mutual funds, private pension funds and holders of savings bonds and Treasury notes. The remaining 10 percent is owned by businesses, like banks and insurance companies. It's also held by an assortment of trusts, companies, and investors.

Here's the breakdown of holders of the public debt as of December 2016:

Foreign - $6.004 trillion
Federal Reserve - $2.465 trillion
Mutual funds - $1.671 trillion
State and local government, including their pension funds - $905 billion
Private pension funds - $553 billion
Banks - $663 billion
Insurance companies - $347 billion
U.S. savings bonds - $166 billion
Other (individuals, government-sponsored enterprises, brokers and dealers, bank personal trusts and estates, corporate and non-corporate businesses, and other investors) - $1.662 trillion.

[Martin Hash]

You're thinking is too much accounting. Government need write no IOUs at all, it's all the same except the Royalists don't automatically assume ownership of the nation's wealth.

The money Treasuries supposedly represent doesn't exist anyway, and hasn't for many decades, since America hasn't balanced a budget, nor will it ever. All those "funds" have nothing.

[DrYouth]

[Martin Hash]

Debt represents future consumption without production.

[SuburbanFarmer]

Because the treasury/debt system provides the illusion of legitimacy that fiat money requires. If you made it too obvious that it was magic, then people might demand things of actual value instead.

[Speaker to Animals]

Because the treasury/debt system provides the illusion of legitimacy that fiat money requires. If you made it too obvious that it was magic, then people might demand things of actual value instead.

This.

[Martin Hash]

That's because everyone is thinking ACCOUNTING, and NOT economics.

p.s. I think people on this forum are just now getting the implications of what I'm saying. Money is imaginary, and should be secondary to productivity.

[SuburbanFarmer]

That's because everyone is thinking ACCOUNTING, and NOT economics.

p.s. I think people on this forum are just now getting the implications of what I'm saying. Money is imaginary, and should be secondary to productivity.

Money is used to exchange productivity. We need a medium of exchange, or we're bartering medicine for cattle.

If you make it too obvious that somebody is printing money (productivity) at will, then it will lose its value. Accounting is a keystone of the Ponzi scheme.

[Martin Hash]

That's because everyone is thinking ACCOUNTING, and NOT economics.

p.s. I think people on this forum are just now getting the implications of what I'm saying. Money is imaginary, and should be secondary to productivity.

Money is used to exchange productivity. We need a medium of exchange, or we're bartering medicine for cattle.

If you make it too obvious that somebody is printing money (productivity) at will, then it will lose its value. Accounting is a keystone of the Ponzi scheme.

As long as productivity = consumption, there is no problem. The $20 trillion is the Ponzi scheme.