You have to balance your budget. Why doesn't Congress have to balance its budget?

Q1: Is our so-called “national debt” a real debt, an interest-bearing burden that we must repay?

A1: No, it’s a “Debt In Name Only”, a “DINO” - It lacks the two essential qualities of a real debt.

1. A real debt is a serious burden. Our DINO is not now and will never be a serious burden for taxpayers.

The buyers of newly-issued treasuries pay for the redemption of mature treasuries. It’s equivalent to a simple bond rollover that your corner bank enjoys doing every day. In every auction, more treasuries are demanded than are available from a limited supply of new issues. Auction winners get the safest, most liquid US dollar instruments; the losers are stuck with bank risk. If it were ever necessary, the Fed could even create an artificial demand for treasuries by buying them in the open market with a few keystrokes. A burden? No! A hoax!

Wall Street charlatans invented the scary DINO hoax to gain a fortune in commissions by privatizing Social Security and Medicare and to maintain a

Wall Street charlatans invented the scary DINO hoax to gain a fortune in commissions by privatizing Social Security and Medicare and to maintain a huge army of unemployed labor that prevents the middleclass from bargaining for better wages and working conditions. http://www.sourcewatch.org/index.php?title=Portal:...

Our Treasury does not borrow money like a home-buyer getting a mortgage. It is rather a custodian of funds, like a bank accepting money offered for certificates of deposit. While a bank with too many bad loans can certainly have too many maturing CDs, our non-lending, fiat Treasury cannot have too many maturing bonds unless its deficit spending is causing inflation. And that is NEVER true during a recession and may be true ONLY in a war or an emergency requiring rationing. During prosperity, banks are ALWAYS the sole cause of inflation, creating over $6 of credit for every deficit dollar spent. To curb inflation, don’t restrict infrastructure spending! Regulate th

The Treasury auctions bonds only because Congress requires that the annual budget deficit be financed by the proceeds. This requirement, now a relic of the former gold standard regime, was suspended during World War II (http://neweconomicperspectives.org/2013/08/mobiliz... followed by 35 years of strong economic growth without harmful inflation. Now, under our fiat currency regime, Congress can again finance deficits out of thin air, the same way your corner bank financed your home mortgage. Free Congress!

2. A real debt must be repaid. Our DINO will never be repaid and should never be repaid.

Our DINO is the total value of all maturing treasuries, which only a federal budget surplus can reduce. Since dropping the gold standard in 1971, we have rarely had even a modest annual budget surplus and none is now in sight. In fact, budget surpluses are deflationary, leading eventually to a severe depression. To supply enough risk-free treasuries, the glue that b

the glue that binds all trading nations, the DINO must continue to grow with our economy.

Q2: Could savers make a “run” on Treasury bonds?

A2: Yes, when savers can get risk-free returns from the Wall Street casino or from GM bonds, Illinois bonds, or Detroit bonds. Safety is not everything. Safety is the ONLY thing!

Q3. Could savers stop buying Treasury bonds?

A3. Yes, when savers no longer want insurance, annuities, pensions, or other risk-free, interest-bearing provisions.

Q4: Could savers prefer foreign sovereign bonds?

A4: Yes, indeed! So far, almost two thirds of the world’s reserve currencies are in US dollars and half of all US Treasury bonds are held by foreigners. But if China’s infrastructure (and its productivity) becomes better than ours, its sovereign bonds could become safer than ours. And that could happen only if US voters worry more about our DINO than they worry about our failing schools, falling bridges, leaking sewers, and an aging power grid.