I did not see any reasoning or causality behind your statement,

“The notion that federal money creation (aka federal borrowing) could make our government poorer is ludicrous.”

all I saw was a grand pronouncement.

Perhaps you are technically correct in saying that the U.S. can print money ad infinitum and never be any poorer but I see perhaps a logical inconsistency in that statement.

If, as you say our wealth is dependent on the ‘Full Faith and Credit’ of the U.S., and if we print money as if it there were no tomorrow, then doesn’t that eventually indeed make the U.S. poorer by reducing other entities ‘Faith’ in the U.S.?

I’m sure if I read your book I would have a better understanding of your concepts but perhaps you could tell us again how printing greater and greater quantities of U.S. dollars does NOT negatively impact our economic standing both at home and abroad. Isn’t that one of the definitions of ‘being poorer’?

Thanks.

He doesn’t understand the profound difference between the federal government and all other entities. The federal government has no savings, so it has no savings to deplete. The so-called “debts” of the federal government merely are a tally of the money created by the government.

Unlike people, companies, cities, counties and states, the federal government has had, since 1971 (the end of the gold standard) the unlimited power to create money. Therefore, it cannot be “poor.” If the government wanted to give Mr. Sheehan $1 trillion tomorrow, it merely would mark his bank account with an additional $1 trillion. This would make Mr. Sheehan rich, but would not make the federal government one cent poorer.

Even government so-called “borrowing” is obsolete. What we erroneously call borrowing is actually creating T-securities from thin air, collateralized by full faith and credit, then selling them for money we previously had created. The federal government just as easily and prudently could create money directly, also from thin air and also collateralized by full faith and credit. That would end federal debt along with the nonsense written about federal debt.

The notion that federal money creation (aka federal borrowing) could make our government poorer is ludicrous.

This is explained in more detail at http://www.moslereconomics.com/ [The 7 Deadly Frauds] and at http://rodgermmitchell.wordpress.com/2009/10/17/the-problem-with-debt-hawks-economics-chicken-littles/

Rodger Malcolm Mitchell