tag:blogger.com,1999:blog-2761684730989137546.post6184751810877301292..comments2024-03-29T09:32:34.853-04:00Comments on Mike Norman Economics: Bill Mitchell — Foreign sales of US government debt are largely irrelevantmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-29729585478165396762017-01-02T13:30:12.177-05:002017-01-02T13:30:12.177-05:00There is no financial reason (in terms of facilita...<i>There is no financial reason (in terms of facilitating fiscal policy) for the bond issuance. It is just a form of welfare spending which helps the top-end-of-town....</i> Prof. Bill Mitchell<br /><br />Or deficits could be financed with negative to 0% yeilding sovereign debt - to maintain the central bank's ability to sop up reserves if deemed desirable. But who will buy negative to 0% yeilding sovereign debt? ans: Those who would otherwise have to pay even more negative interest on fiat account balances at the Fed.<br /><br />But what about the non-rich? Should they pay negative interest too? ans: No, since SOME risk-free liquidity/savings is legitimate so an individual citizen exemption of up to, say, $250,000 US should accompany negative interest on reserves (NIOR).<br /><br />But won’t the banks try to pass on negative rates to non-rich depositors? Yes, but who needs banks anyway since all citizens should be allowed inherently risk-free accounts at the central bank itself?<br /><br />But what about the strength of the US dollar if it can no longer buy welfare proportional to wealth? ans: It’ll probably go down but that should increase US exports and increase jobs.Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.com