Quote:
Originally Posted by mangamuscle
^ You seem to think all of the federal goverment debt is internal, when the ugly truth is that you also owe banks from other countries and the federal reserve does not set their interest rates. |
The federal reserve doesn't have to set other banks interest rates. They set the rates on the treasury bonds those banks buy. One of the big misconceptions is government debt is like a loan. It isn't usually. The government sells treasury bonds at auction, which are basically promissory notes at a set interest rate. The banks, individuals, corporations, governments, or what have you buying them do not set the interest rate.
