• treadful@lemmy.zip
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    7 months ago

    Central bank loans the government $100 at 1% interest, even if they spend none of it, how do they pay the 1% when the issuer of the currency is also the loaner?

    Taxes.

    • Wes4Humanity@lemm.ee
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      7 months ago

      Pretty sure they’re saying if we taxes everyone 100%… Collected all the money from everyone in the country, then gave it all back to the central bank we borrowed it from originally, we’d still owe the interest on the debt… With no more money in the system where would we get the “taxes”?

      • treadful@lemmy.zip
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        7 months ago

        As with most debt, it can’t be paid off immediately or it wouldn’t have been debt to being with. It’s a bet on the future.