10 years ago
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Ending the debt limit crisis: Can the Fed forgive the National Debt?
The debt held on the balance sheet of the Federal Reserve can be canceled without any significant consequence, because it is a bookkeeping artifact corresponding to the money supply. In essence, the government owes this money to itself.
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http://blogs.reuters.com
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Forgive 2 or more trillion dollars? This is smoke and mirrors, and would only allow congress to spend just that much more rapidly than otherwise with the present debt cap in place. This temporary gift of more spending would be otherwise meaningless.