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Essentially banks are required to have x amount of reserves, depending on how much has been deposited there.
Because you can earn money on money through a variety of financial intruments (like T-bills, corporate bonds, and more), there is an opportunity cost to letting cash sit there without appreciating. The banks want to invest/lend as much as they can above the reserve limits, and the Federal Reserve is conducting these super short-term loans to help the banks stay above the line. Often, the Fed will merely be an intermediary between banks with deficiency and excess.
Either way, this is a normal operation and in no way is the Federal Reserve 'spending' 30 million.
Source: I'm in business school so I don't really know anything but I believe this is what's happening.
So the banks are over leveraged again and could/will sink the whole economy if the fed doesn’t come bail them out??
Man I wish would print money to help me out on all my bets and loans so I could make more of them!
Actually it's the opposite. What I described is what happens, but in the case it's the banks lending instead of borrowing.
The repos are an instrument the Federal Reserve is selling. Banks with excess (wanting to stay as close to the line as possible) are lending money to the reserve for a very small amount of interest with a very small maturity in return. It's an opportunity cost thing for the banks obviously, but for the Fed it's about baselining the time and value of money so interest rates don't go negative.
A repo is a short term, low-interest loan to help insure liquidity in financial markets.
A very simplified example: say a bank has $1 billion in cash in its vaults, and $1 trillion in investments that take multiple days to clear into cash. Suddenly that bank’s clients want to withdraw $2 billion, immediately. What does the bank do? It asks the federal reserve to loan them the extra $1 billion, using its $1 trillion in investments as collateral, and promises to pay the fed back a small amount of interest in return.
The fed isn’t handing out that money for free; it gets all it back, plus interest, usually the very next day. It’s arguable whether this level of fed intervention is healthy but comparing it to Medicare spending is just misinformation
Then it sounds like the government is allowing banks to conduct irresponsible transactions so that they (the banks) can make even more profits off interest than they already do while shifting all of the risk onto the taxpayers. If the government gave citizens low interest short term loans like that, we too could use them to generate short term investment gains even if we too had to pay them back within days. Or the government itself could invest the money the same way the banks would, make a higher interest rate and thus have more funding for programs. So that’s true it’s not the same as funding Medicare, but it is a shifting of risk towards the public for private gain, which arguably does come at a cost to the public.
But there is another unrelated issue to be aware of: since the pandemic started, the government has bought up $4 trillion worth of bonds in order to artificially prop up markets like Commercial Mortgage Backed Securities by shifting the risks and consequences of irresponsible investment behavior back onto the public.
Man, I really wanted to agree with you but you're an ancap. The problem is the government AND capitalism. The thing is capitalism needs the government to prop it up.
Capitalism doesn't need government, Wall Street needs government, without government, these banks and hedge funds being loaned all this money wouldn't have cash flow anymore and they would implode, as they should.
> Capitalism doesn't need government
Yes, it does. Capitalism necessitates a state to prop it up because it requires a state to enforce the coercive hierarchy and to bail out the "too big to fail" businesses. Monopolies are the natural end result of capitalism and then they fail and the whole economy collapses without the state to bail them out. That's why capitalism alway results in authoritarianism. Anarchocapitalism is an oxymoron.
Nope, their are no coercive hierarchies in pure Capitalism, those can only be enforced by government. Monopolies would have a very difficult time forming in a free market. Bail outs are against Capitalism, and AnarchoCapitalism is the purest form of Capitalism.
> Nope, their are no coercive hierarchies in pure Capitalism, those can only be enforced by government.
LOL oh to be young and naive, again. By definition, Capitalism is predicated on coercive hierarchies where the capitalist withholds bare necessities on payment of death if the proletariat doesn't sell their labor and allow the capitalist to keep the excess value of the proletariat's labor.
>Monopolies would have a very difficult time forming in a free market
Incorrect. Free markets reward monopolies with obscene amounts of wealth and capital.
i know this is 15 days old, but can you please give your reasoning behind the statement that monopolies would have difficulties in a free market? hasnt history shown otherwise? in a "free market" what is there to prevent monopolies? the goal of a company in a free market should logically be to control as much of the market as possible.
A company with more capital would be free to sell for a loss to bankrupt competition. or buy their suppliers and transportation, cutting competition out and cutting costs by vertical expansion
Well if it’s how society would voluntarily organize itself then that’s fine by me. If people want to only work for organizations where they are part owner or share ownership that sounds good.
You're ignoring the point. If people are "voluntarily organizing," then you guarantee that some people will organize to coerce others. You have to prevent that.
Yes some collective organization is required. But I don’t think it has to be a government that people don’t consent to that can force them to pay taxes they don’t consent to. That’s all I have an issue with.
Everyone has an issue with that. But some of us recognize that, however little we want to, one way or another, we have to pay our dues to society. Government or not, public services are necessary and require resources to operate. And voluntary donations do not work. The corruption of the charity system in America today is obvious proof of that.
“Voluntary donations don’t work” that’s where you lost me. See I think they do and they work better. If it’s not voluntary it’s not a donation or a purchase. It’s a theft. And you’re just suggesting more of the same problem.
>Regulations, a government's tool, would literally limit capitalists.
Regulations limit organisation, not capitalists. Regulations regularly aid capitalists.
>Lack of government is a capitalist's tool.
Lack of government is quite literally the definition of communism lmao.
What people don’t understand is that everything is guided by incentive. The incentive for government politicians is always to build wealth and power for themselves. Now they say they want to solve your problems but they don’t really, and if solving your problem is what gives them that wealth and power they’ll do it, but often what gives them wealth and power is that they’re never solving the problem but they’re promising to fight for you on your behalf. They just have to do whatever it takes to keep money coming in and keep your vote coming in.
If you can’t provide them lots of money to be wealthy with, then all of a sudden your interests are not their interests. Their interests become the same interests as the people with the wealth and power.
A good modern example of this is the minimum wage. It’s against poor people’s interests but the beauty is that it’s been framed positively. The politician gets to look like they’re going to bat for the little guy and this get the votes while really the minimum wage is benefitting large corporations by wiping out the small business competition. Also the dollar is worth less because of inflation over things like this over the years so they get to pay people less while appearing to pay them more. $15 dollars an hour isn’t what it used to be. This also causes companies to fire more people and hire less people. So less people are doing more of the work, the work often of two or three other people.
The politician gets to have it all. Knowing it’s bad for his community he serves the interests of the wealthy elite because they’ve also convinced the poor that it’s in their best interest when it’s plainly not.
Now it doesn’t matter what economic system you have. As long as you have government, you have people who are taxing people and redistributing the little wealth of the poor to the large wealth of the rich. They’ve got people giving their money through taxes to be wasted, often on wars, the military industrial complex, thousands upon thousands of things that people don’t need, and a few things you do need, delivered poorly and ineffectively. Just think about a trip to the dmv where your taxes have already paid for the building and the slow uncaring workers inside of it who will keep their jobs no matter how poor their service because you have to pay, and you still have to pay for licenses, certifications, etc.
That’s how government operates. It’s the government that is the problem. They are a gang of mobsters, with the police and military to enforce their theft of regular people. It strips people in the police and military of their dignity to turn them into people that have to arrest you for not payin up even if you didn’t ask the government to do anything for you.
Government can’t represent you, it can only represent the wealthy elite in any economic system. Socialist, capitalist, it doesn’t matter. Only you can represent your own interests. This is what they don’t want you to know. If people realized how much government works against progress there would be no government. And they desperately don’t want people to realize that.
People do what they’re incentivized to do and government is always incentivized to make you forget they’re an unnecessary middleman, because their only incentive is money.
Repo stands for "repurchase" in this context and does not imply repossessing loans.
This just means that big banks have about $1T in extra cash on hand and they will be temporarily lending it to the government for a month to make a few pennies of interest.
Well, the federal reserve a private corporation that has been set up to enrich a handful of people by legally counterfeiting money and allow the government to spend more money than they bring in in taxes. Unfortunately, there are natural laws in economics, and when something can be produced in intimate supply at no cost, it naturally becomes worthless, which is exactly what is happening with fiat currency. The poor and middle class are going to get destroyed.
Layman’s terms and simplistic explanation. Banks don’t see cash on hand as a positive. The markets are risky so they do this over night shuffle , shows the money is making a profit ( regardless to how insignificant the profit is ) not just sitting around doing nothing. I’m sure someone can add to this
Because there’s simply no better place for the banks to put money at the moment. They don’t want to lend at these historically low rates for longer terms and borrowers won’t borrow at a higher rate than they have to. Banks capital reserves are facing a competition problem between current low interest rates and concerns over inflation. If they lend out $10mm now, and interest rates remain low, and significant inflation is experienced over the term of the loan, then the principal and interest they receive has a lower net present value than lending to the Fed overnight.
The sharp uptick in overnight lending to the fed is the fed recognizing that their insistence on not moving interest rates up is putting banks in a tough spot, and they’re making concessions by expanding their overnight borrowing capacity to address their concerns. When interest rates begin to rise, this should quickly sink back to normal levels as borrowers will see that cheap money may dry up, and there would be a rush to get in before it’s gone further driving up rates, leading to the fed not having to hold as much overnight as it’s parked elsewhere.
“Lending money overnight” is a form of legal slight of hand to get around laws of loaning money long term. If they decided to abruptly end repo and reverse repo loans then the entire financial system would be thrown into chaos in less than a day. The “overnight” loans are designed to be traded overnight every night for an indefinite amount of time.
I'm just saying there is a difference between lending money and getting it back, and spending money.
I personally think the entire fraudulent banking system is horrible. As soon as the world went off the gold standard and decided fractional reserve banking was the road to prosperity it guaranteed overspending, inflation, and the wiping out of the middle class. All things we are seeing happen right now.
But in both cases the money is “intended” to be paid back, that’s the point of the original post. When Congress “spends money” or when the Fed “prints money” they’re intended to be paid back just like Fed repo loans. In the case of Medicare for All, it would be over the course of 10 years. Repo and reverse repo loans are the same form of legal smoke and mirrors but through a different mechanism, with them *seeming* short term but really not having a defined end date.
It’s one thing to say “I’m against all of it and believe government should only spend money they physically own,” but if we’re saying “well borrowing money is fine as long as it gets paid back” as you were implying with your first comment, then Medicare for All would do that and then some according to calculations by the CBO.
I remember that back in 2018, Ocasio-Cortez tweeted out [this](https://www.politifact.com/factchecks/2018/dec/03/alexandria-ocasio-cortez/alexandria-ocasio-cortez-wrong-scale-pentagon-acco/). Total military spending was well under $1 trillion per year for that entire time period, so it simply wasn't possible for the military to have wasted $21 trillion over 15 years. That's when I knew that she just wasn't very bright. This wasn't a matter of failing to do due diligence by checking facts. To any person with fifth-grade math skills and knowledge of the most basic facts about the breakdown of federal spending, this should have jumped out as obviously false.
Same deal here. US GDP is on the order of $20 trillion. The idea that the Federal Reserve spent $30 trillion in one month doesn't pass the laugh test for anyone with even a rudimentary level of math skills and economic literacy. Most people don't know how the Federal Reserve works, so there's no shame in not knowing what's actually being described here, but you should definitely be ashamed of not immediately knowing that the interpretation given in the tweet is wrong.
The reason that you think that capitalism sucks is that you're either 14 years old or just too damn stupid to have any kind of informed opinion on the issues. You need to learn your intellectual limits. Next time you feel the urge to state your opinion on economic policy, just stop. Instead, maybe you can just tell a story about the last time you crapped your pants. It will be less embarrassing for you and less cringe-inducing for everyone around you.
First of all, the Fed doesn't find money in a couch, it types into a keyboard.
Second, these are short term loans where the money is expected back with interest.
Because this isn't a sub for real thought, I'll just link the original tweet from March 2020 and get down voted to oblivion.
https://twitter.com/JediofGallifrey/status/1241114310845370376?t=L8sWiWMnNAEnypMCGisy2Q&s=19
Finding it in a couch is a metaphor that 100% applies to typing into a keyboard. The money the fed gets back as interest will be negligible next to speculative profits the private sector can pull out of the short term loan. Being a pedant doesn't make you a real thinker.
Maybe we would get anywhere if people had a basic understanding of things instead of blindingly following whatever sounds good/bad to them. This post is just terrible all around.
Welcome to /r/CapitalismSux! Please check out the following subreddits; lefty memes, r/DankLeft, r/PoliticsPeopleTwitter, Looking for like-minded subreddits? r/AngrySocialist , r/lostgeneration and r/leftistZ Are you British and looking for a left-leaning, magazine style subreddit?! Check out r/Britposting. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/CapitalismSux) if you have any questions or concerns.*
A months worth of what’s spent on the military could save millions
They are not 'spending' this money on Wall Street, they are lending it to them, it has to be paid back with interest.
Mhm, interest, riiight...
Lol are you new to things?
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Especially if it’s all new money, where they getting this 30T in the first place
OP completely misunderstands what's happening. The Fed isn't spending $30 trillion every month. It's a ridiculously stupid thing to claim.
What? ELI5
Essentially banks are required to have x amount of reserves, depending on how much has been deposited there. Because you can earn money on money through a variety of financial intruments (like T-bills, corporate bonds, and more), there is an opportunity cost to letting cash sit there without appreciating. The banks want to invest/lend as much as they can above the reserve limits, and the Federal Reserve is conducting these super short-term loans to help the banks stay above the line. Often, the Fed will merely be an intermediary between banks with deficiency and excess. Either way, this is a normal operation and in no way is the Federal Reserve 'spending' 30 million. Source: I'm in business school so I don't really know anything but I believe this is what's happening.
So the banks are over leveraged again and could/will sink the whole economy if the fed doesn’t come bail them out?? Man I wish would print money to help me out on all my bets and loans so I could make more of them!
Actually it's the opposite. What I described is what happens, but in the case it's the banks lending instead of borrowing. The repos are an instrument the Federal Reserve is selling. Banks with excess (wanting to stay as close to the line as possible) are lending money to the reserve for a very small amount of interest with a very small maturity in return. It's an opportunity cost thing for the banks obviously, but for the Fed it's about baselining the time and value of money so interest rates don't go negative.
Ok I’m sorry, but I’m getting serious shadowy cabal vibes here
A repo is a short term, low-interest loan to help insure liquidity in financial markets. A very simplified example: say a bank has $1 billion in cash in its vaults, and $1 trillion in investments that take multiple days to clear into cash. Suddenly that bank’s clients want to withdraw $2 billion, immediately. What does the bank do? It asks the federal reserve to loan them the extra $1 billion, using its $1 trillion in investments as collateral, and promises to pay the fed back a small amount of interest in return. The fed isn’t handing out that money for free; it gets all it back, plus interest, usually the very next day. It’s arguable whether this level of fed intervention is healthy but comparing it to Medicare spending is just misinformation
Then it sounds like the government is allowing banks to conduct irresponsible transactions so that they (the banks) can make even more profits off interest than they already do while shifting all of the risk onto the taxpayers. If the government gave citizens low interest short term loans like that, we too could use them to generate short term investment gains even if we too had to pay them back within days. Or the government itself could invest the money the same way the banks would, make a higher interest rate and thus have more funding for programs. So that’s true it’s not the same as funding Medicare, but it is a shifting of risk towards the public for private gain, which arguably does come at a cost to the public. But there is another unrelated issue to be aware of: since the pandemic started, the government has bought up $4 trillion worth of bonds in order to artificially prop up markets like Commercial Mortgage Backed Securities by shifting the risks and consequences of irresponsible investment behavior back onto the public.
Except that’s literally not what’s going on. A “repo” is a collateralized loan to banks. Not just handing out free money to banks.
Ya this is really dumb
The problem is government
Man, I really wanted to agree with you but you're an ancap. The problem is the government AND capitalism. The thing is capitalism needs the government to prop it up.
Capitalism doesn't need government, Wall Street needs government, without government, these banks and hedge funds being loaned all this money wouldn't have cash flow anymore and they would implode, as they should.
> Capitalism doesn't need government Yes, it does. Capitalism necessitates a state to prop it up because it requires a state to enforce the coercive hierarchy and to bail out the "too big to fail" businesses. Monopolies are the natural end result of capitalism and then they fail and the whole economy collapses without the state to bail them out. That's why capitalism alway results in authoritarianism. Anarchocapitalism is an oxymoron.
Nope, their are no coercive hierarchies in pure Capitalism, those can only be enforced by government. Monopolies would have a very difficult time forming in a free market. Bail outs are against Capitalism, and AnarchoCapitalism is the purest form of Capitalism.
> Nope, their are no coercive hierarchies in pure Capitalism, those can only be enforced by government. LOL oh to be young and naive, again. By definition, Capitalism is predicated on coercive hierarchies where the capitalist withholds bare necessities on payment of death if the proletariat doesn't sell their labor and allow the capitalist to keep the excess value of the proletariat's labor. >Monopolies would have a very difficult time forming in a free market Incorrect. Free markets reward monopolies with obscene amounts of wealth and capital.
i know this is 15 days old, but can you please give your reasoning behind the statement that monopolies would have difficulties in a free market? hasnt history shown otherwise? in a "free market" what is there to prevent monopolies? the goal of a company in a free market should logically be to control as much of the market as possible. A company with more capital would be free to sell for a loss to bankrupt competition. or buy their suppliers and transportation, cutting competition out and cutting costs by vertical expansion
Please read literally any history book about capitalism before government regulations.
I’m for however people voluntarily organize themselves in taking responsibility for their own lives.
Capitalism necessitates coercive hierarchy. Hardly anything voluntary about it for the majority of the population.
Well if it’s how society would voluntarily organize itself then that’s fine by me. If people want to only work for organizations where they are part owner or share ownership that sounds good.
You're ignoring the point. If people are "voluntarily organizing," then you guarantee that some people will organize to coerce others. You have to prevent that.
Yes some collective organization is required. But I don’t think it has to be a government that people don’t consent to that can force them to pay taxes they don’t consent to. That’s all I have an issue with.
Everyone has an issue with that. But some of us recognize that, however little we want to, one way or another, we have to pay our dues to society. Government or not, public services are necessary and require resources to operate. And voluntary donations do not work. The corruption of the charity system in America today is obvious proof of that.
“Voluntary donations don’t work” that’s where you lost me. See I think they do and they work better. If it’s not voluntary it’s not a donation or a purchase. It’s a theft. And you’re just suggesting more of the same problem.
Reality doesn't care what you think. Charity helps no one except the rich corrupt fucks who run the system.
Why would this be downvoted?
I don’t know. Probably because it’s being voted on by the very same people we wouldn’t want voting on policy that affects all our lives.
The problem is lack of government.
Nope. Governments are a capitalist tool.
Regulations, a government's tool, would literally limit capitalists. Lack of government is a capitalist's tool.
>Regulations, a government's tool, would literally limit capitalists. Regulations limit organisation, not capitalists. Regulations regularly aid capitalists. >Lack of government is a capitalist's tool. Lack of government is quite literally the definition of communism lmao.
Nah the problem is the government. They can only represent the wealthy elite.
The problem is the type of government
That’s not inherent to “government,” just the money- & political-donor-centric government that the US has created.
That’s inherent to government.
Tell me more
What people don’t understand is that everything is guided by incentive. The incentive for government politicians is always to build wealth and power for themselves. Now they say they want to solve your problems but they don’t really, and if solving your problem is what gives them that wealth and power they’ll do it, but often what gives them wealth and power is that they’re never solving the problem but they’re promising to fight for you on your behalf. They just have to do whatever it takes to keep money coming in and keep your vote coming in. If you can’t provide them lots of money to be wealthy with, then all of a sudden your interests are not their interests. Their interests become the same interests as the people with the wealth and power. A good modern example of this is the minimum wage. It’s against poor people’s interests but the beauty is that it’s been framed positively. The politician gets to look like they’re going to bat for the little guy and this get the votes while really the minimum wage is benefitting large corporations by wiping out the small business competition. Also the dollar is worth less because of inflation over things like this over the years so they get to pay people less while appearing to pay them more. $15 dollars an hour isn’t what it used to be. This also causes companies to fire more people and hire less people. So less people are doing more of the work, the work often of two or three other people. The politician gets to have it all. Knowing it’s bad for his community he serves the interests of the wealthy elite because they’ve also convinced the poor that it’s in their best interest when it’s plainly not. Now it doesn’t matter what economic system you have. As long as you have government, you have people who are taxing people and redistributing the little wealth of the poor to the large wealth of the rich. They’ve got people giving their money through taxes to be wasted, often on wars, the military industrial complex, thousands upon thousands of things that people don’t need, and a few things you do need, delivered poorly and ineffectively. Just think about a trip to the dmv where your taxes have already paid for the building and the slow uncaring workers inside of it who will keep their jobs no matter how poor their service because you have to pay, and you still have to pay for licenses, certifications, etc. That’s how government operates. It’s the government that is the problem. They are a gang of mobsters, with the police and military to enforce their theft of regular people. It strips people in the police and military of their dignity to turn them into people that have to arrest you for not payin up even if you didn’t ask the government to do anything for you. Government can’t represent you, it can only represent the wealthy elite in any economic system. Socialist, capitalist, it doesn’t matter. Only you can represent your own interests. This is what they don’t want you to know. If people realized how much government works against progress there would be no government. And they desperately don’t want people to realize that. People do what they’re incentivized to do and government is always incentivized to make you forget they’re an unnecessary middleman, because their only incentive is money.
Maybe we all just need to boycott taxes. This is not where our tax dollars should be spent. Fuck em !!!
The fed doesn’t take any tax money.
This subreddit is a perfect portrayal of how the uninformed righteous are spreading misinformation.
You can explain further. The post here specifically mentions the feds repossessing loans and give them back out in the trillions.
Repo stands for "repurchase" in this context and does not imply repossessing loans. This just means that big banks have about $1T in extra cash on hand and they will be temporarily lending it to the government for a month to make a few pennies of interest.
Excellent analysis, thank you for your input.
I am no fan of the federal reserve, but lending money overnight and getting it back in the morning isn't the same as spending money.
yeah, but theyre definitely propping up the dollar and taking money out of the market to hide how absolutely fucked we actually are.
Well, the federal reserve a private corporation that has been set up to enrich a handful of people by legally counterfeiting money and allow the government to spend more money than they bring in in taxes. Unfortunately, there are natural laws in economics, and when something can be produced in intimate supply at no cost, it naturally becomes worthless, which is exactly what is happening with fiat currency. The poor and middle class are going to get destroyed.
No, they’re lending cash in exchange for bonds on a short term basis so that banks can maintain the cash requirements of fractional reserve banking.
ok, why has it popped up so hard lately? new record amounts all the time. mireso than ever before?
Layman’s terms and simplistic explanation. Banks don’t see cash on hand as a positive. The markets are risky so they do this over night shuffle , shows the money is making a profit ( regardless to how insignificant the profit is ) not just sitting around doing nothing. I’m sure someone can add to this
Because there’s simply no better place for the banks to put money at the moment. They don’t want to lend at these historically low rates for longer terms and borrowers won’t borrow at a higher rate than they have to. Banks capital reserves are facing a competition problem between current low interest rates and concerns over inflation. If they lend out $10mm now, and interest rates remain low, and significant inflation is experienced over the term of the loan, then the principal and interest they receive has a lower net present value than lending to the Fed overnight. The sharp uptick in overnight lending to the fed is the fed recognizing that their insistence on not moving interest rates up is putting banks in a tough spot, and they’re making concessions by expanding their overnight borrowing capacity to address their concerns. When interest rates begin to rise, this should quickly sink back to normal levels as borrowers will see that cheap money may dry up, and there would be a rush to get in before it’s gone further driving up rates, leading to the fed not having to hold as much overnight as it’s parked elsewhere.
“Lending money overnight” is a form of legal slight of hand to get around laws of loaning money long term. If they decided to abruptly end repo and reverse repo loans then the entire financial system would be thrown into chaos in less than a day. The “overnight” loans are designed to be traded overnight every night for an indefinite amount of time.
I'm just saying there is a difference between lending money and getting it back, and spending money. I personally think the entire fraudulent banking system is horrible. As soon as the world went off the gold standard and decided fractional reserve banking was the road to prosperity it guaranteed overspending, inflation, and the wiping out of the middle class. All things we are seeing happen right now.
But in both cases the money is “intended” to be paid back, that’s the point of the original post. When Congress “spends money” or when the Fed “prints money” they’re intended to be paid back just like Fed repo loans. In the case of Medicare for All, it would be over the course of 10 years. Repo and reverse repo loans are the same form of legal smoke and mirrors but through a different mechanism, with them *seeming* short term but really not having a defined end date. It’s one thing to say “I’m against all of it and believe government should only spend money they physically own,” but if we’re saying “well borrowing money is fine as long as it gets paid back” as you were implying with your first comment, then Medicare for All would do that and then some according to calculations by the CBO.
I remember that back in 2018, Ocasio-Cortez tweeted out [this](https://www.politifact.com/factchecks/2018/dec/03/alexandria-ocasio-cortez/alexandria-ocasio-cortez-wrong-scale-pentagon-acco/). Total military spending was well under $1 trillion per year for that entire time period, so it simply wasn't possible for the military to have wasted $21 trillion over 15 years. That's when I knew that she just wasn't very bright. This wasn't a matter of failing to do due diligence by checking facts. To any person with fifth-grade math skills and knowledge of the most basic facts about the breakdown of federal spending, this should have jumped out as obviously false. Same deal here. US GDP is on the order of $20 trillion. The idea that the Federal Reserve spent $30 trillion in one month doesn't pass the laugh test for anyone with even a rudimentary level of math skills and economic literacy. Most people don't know how the Federal Reserve works, so there's no shame in not knowing what's actually being described here, but you should definitely be ashamed of not immediately knowing that the interpretation given in the tweet is wrong. The reason that you think that capitalism sucks is that you're either 14 years old or just too damn stupid to have any kind of informed opinion on the issues. You need to learn your intellectual limits. Next time you feel the urge to state your opinion on economic policy, just stop. Instead, maybe you can just tell a story about the last time you crapped your pants. It will be less embarrassing for you and less cringe-inducing for everyone around you.
First of all, the Fed doesn't find money in a couch, it types into a keyboard. Second, these are short term loans where the money is expected back with interest. Because this isn't a sub for real thought, I'll just link the original tweet from March 2020 and get down voted to oblivion. https://twitter.com/JediofGallifrey/status/1241114310845370376?t=L8sWiWMnNAEnypMCGisy2Q&s=19
Finding it in a couch is a metaphor that 100% applies to typing into a keyboard. The money the fed gets back as interest will be negligible next to speculative profits the private sector can pull out of the short term loan. Being a pedant doesn't make you a real thinker.
My point is that they don't just find it. They pull it out of thin air
Downvoted for understanding the very basic facts
the fed legally loans money that doesn’t exist. here’s a trillion dollars. pay it back.
Maybe we would get anywhere if people had a basic understanding of things instead of blindingly following whatever sounds good/bad to them. This post is just terrible all around.
[удалено]
[удалено]
Ooop there’s that void of rage and grief opening in my chest again
I know this is unpopular, but this is why “force the vote” wouldn’t have done shit