OldNavySailor

To Monetize or Not to Monetize: Who Cares?

Why does the government have to issue debt (bills, notes, bonds)?

It has a printing press (U.S. Treasury). Why do the American people have to pay income taxes to pay the interest on self-inflicted debt when the government can loan the money directly to the lending industry?

The government receives the interest payed by the banks and uses it to pay for its operating expenses.

Banks loan the money for commercial/personal loans and charge interest. When the loans are repaid the money is taken out of circulation until new loans are made by the banks again. This free market expansion and contraction of the money supply establishes equilibrium in the money supply thereby keeping inflation under control.

So tell me, why do we need the Federal Reserve to "buy" the government's debt if the government doesn't have to issue debt?

In fact, why do we "need" a Federal Reserve private corporation to manage the countries monetary base?

Oh, and why do we have to have an income tax if the government can pay for itself with the interest earned from loaning "our" money to the banking system?

Does this make sense to anyone?