In this episode: what happens to your taxes when you pay them, what the government says they are used for and why orthodox economists have not embraced MMT's insights.
Thanks for getting this thought provoking stuff out there. Obviously in the US the incoming regime is saber rattling about cutting the federal budget, even though Trump policies added over $8 trillion to the national debt the first time around. We hear that one of the biggest outlays by the government is serving the interest payments on the national debt. Who are those payments actually going to?
It goes to those who purchase government bonds. That includes the Federal Reserve, banks, pensions funds and insurance companies, some individuals, corporations, foreign countries and foreign investors, the financial sector (hedge funds etc) and others. They all earn interest from those purchases.
Thanks for getting this thought provoking stuff out there. Obviously in the US the incoming regime is saber rattling about cutting the federal budget, even though Trump policies added over $8 trillion to the national debt the first time around. We hear that one of the biggest outlays by the government is serving the interest payments on the national debt. Who are those payments actually going to?
It goes to those who purchase government bonds. That includes the Federal Reserve, banks, pensions funds and insurance companies, some individuals, corporations, foreign countries and foreign investors, the financial sector (hedge funds etc) and others. They all earn interest from those purchases.