If the Gov't cuts costs, who gets the money?

Discussion in 'Economics' started by nutmeg, Jun 25, 2012.

  1. So if the gov't gets more efficient, cuts costs, eliminates a few departments, this will really fatten up the bottom line.

    (Does the Gov't have a bottom line?)

    Who gets the money?
  2. Most of it will go to paying the deficit. So whoever has bought treasury bonds in theory.
  3. dont you find it funny how the more the government goes into debt the LOWER the interest rates get on treasuries?

    ever see what happens to corporate bonds when debt on the balance sheet soars?
  4. treasury bonds get paid off by the fed debiting and crediting accounts at the fed. It is not taken from anywhere

    According to conventional wisdom, the Federal government spends taxpayers' money. In reality it creates all the money it spends, and recaptures it with taxes and the sale of bonds. In the long run, however, it must spend at least as much as it recaptures. Otherwise it would drain the monetary base backing credit money, which is the main part of money supply on which the economy runs. In order to influence the amount of credit money that banks issue, the government must control the cost to banks of acquiring base money.
  5. That's not an insight often seen around here.