I want to dress as Segal for next Halloween but I can’t find a wig. Also:

Really interesting. I just read the Bank of England’s companion article: Money in the modern economy, an introduction https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-in-the-modern-economy-an-introduction

I didn’t consider that you could still classify banking as fractional reserve banking even though there are no fractional reserve banking requirements. In my mind the concept was one of regulatory oversight.

Do you think that when a bank loans money to another bank they are creating money out of thin air? If they can do that then why do they need to borrow money?

I think you’re doing a good job interpreting and explaining modern monetary theory, I just don’t agree with all of it, although I agree with the concept.

Do you believe that the US government must collect taxes before it can spend money? Or do you agree that government spending is self financed and money creation (in spending by the US government) is only limited by concerns of inflation?

Do you believe that Banks hold digital money in their reserves? I do. Who do you think created that money?

You’re right that that article does talk about banks creating money and it’s true that banks can create money when they lend more than they have in reserves and assets. But my larger point was that IMO bank loans are credit but the bank loans are repaid with actual money. Maybe it’s semantics.

Also, you mentioned fractional reserve banking but that no longer exists. It ended around 2020 when the government changed regulations and no longer requires banks to hold any ratio of reserves to debt.

When a bank issues a loan it creates a credit in the borrower’s account. When the borrower withdraws/transfers the money from their account the money comes from the bank’s reserves. The bank’s reserves consists of deposits and other liquid assets. The money in the bank’s reserves started its life by being created by the federal government. You may argue that the bank is loaning money that it does not hold in reserves, but for lack of a better description, this is a huge liability for the bank that can create insolvency issues (bank run). For this reason, I do not agree that banks create money when they issue loans, since the bank’s reserves are not created by the bank.

Money collected from taxes is basically recorded in a ledger / account by the Treasury. Some people look at this as the end of the lifespan of that money or the destruction of that money.

Money begins its life by being spent by the federal government. They essentially create money with the press of a keystroke (granted they are spending funds which are approved by Congress and allocated for projects), the money credits a Treasury account, then they transfer it / spend it which puts the money into circulation.

The federal government does not actually NEED the money you pay in taxes to fund their spending. Money does not come from people. It is created solely by the treasury. The federal government WANTS the money from taxes to approximately match the amount they put into circulation through spending in order to prevent runaway inflation. If they spend more than they collect they are adding to the supply of money which seems to be normal for a society with a growing population and successful marketplaces, but if they spend too much you get inflation.

The federal government believes that balancing is important. They want the amount of goods and services that America exports globally to match the amount America imports. Each year there is a deficit which means that America receives more goods and services than it exports. In order to balance this, the Treasury issues bonds equaling the amount of the year’s trade deficit. We don’t have to do this but we choose to because we believe it will create financial stability.

When the US issues bonds it collects money and gives a promise to make interest payments and to repay those bonds when they are due. Those bonds are debt. This is essentially how the government borrows money.

This is a fantastic article from the Bank of England which is like the US Treasury https://share.google/GmWpluu76vSJpuw5C

Edit: read the discussion below for more context and clarification. Banks create more money then the federal government does, I wasn’t aware.

They were probably people dressed in rat costumes

When I was a little kid I saw The nutcracker ballet on TV and they had human-sized rats dancing around and I was terrified for a long time

You can get a 66% chance of being right if you turn on a switch and check the room. If the light is off you guess between the other two. For example, you are going to test switch 1 and if it is off you guess switch 2.

Reminds me of the Monty Hall problem except in that problem the game show host has an action to take which effects the odds.

Shitposting is an artform

Really blew my mind when I found out that red onions are just ripe white onions.

Terribly loud non-stop belching

Hmm yeah I obviously haven’t figured that out yet.

Five generations would be 10 people. If one of them was native American, their descendant would be 1/10 native American.

For anyone who isn’t a big always sunny fan, in the original scene Frank is holding two glasses of lemon water and he says “so anyway, i started fasting”

It’s a gif that changes when you look away!

Yes but you have to put the bread on top and bottom not just on the sides like some people do because then everything falls out