#economics #money
Borrowing money, taking out a mortgage, printing notes, minting coins, running up credit, issuing currency or signing IOUs, leaving bills unpaid etc. are all shades of the same thing and there are the same two sides to each of them - the issuer/borrower has a financial LIABILITY and the holder of the mortgage, bank notes, bank deposit, IOU etc. has a financial ASSET. It always nets off to precisely zero.
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Mark Wadsworth: Economic Myths: Governments don't issue currency.s first in the process creating deposits then the government taxes or borrows those deposits.
Again, nope.
The general rule that "loans create deposits" applies to the government just as much as it does to banks or anybody else.
<span>Borrowing money, taking out a mortgage, printing notes, minting coins, running up credit, issuing currency or signing IOUs, leaving bills unpaid etc. are all shades of the same thing and there are the same two sides to each of them - the issuer/borrower has a financial LIABILITY and the holder of the mortgage, bank notes, bank deposit, IOU etc. has a financial ASSET. It always nets off to precisely zero.
So the government can pay people with coins and notes, bank deposits, new bonds, or simply pay a supplier over an extended credit period. It is all shades of the same thing. It does not Summary
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