[altdataseller]

I don't nobody loves taxes, and government wastes a lot of money, but doesn't some of that money goes back to the economy via government spending on infrastructure, workers, software, new projects, etc? So how is that destroying money?

[jollyllama]

Good question. It's destroying the money to the extent that it's servicing government debt.

[jmoak3]

Correct me if I'm wrong, but when servicing gov debt, isn't that money simply distributed to gov debt holders?

Looking at https://fiscaldata.treasury.gov/national-debt/ and https://datalab.usaspending.gov/americas-finance-guide/debt/... it appears the largest holder is the "public".

Is that through treasuries sold by the US gov? If so, we wouldn't be "destroying" money by funding these.

The federal reserve has large holdings as well, which I believe it generated buying corporate bonds and MBS during covid - would we be "destroying" money by giving the federal reserve the cash to balance the books on all of those holdings so it can hold them to fruition (after buying them at a loss) without ever having to sell? It could then just toss away all of that money it received to cover the loss.

This could work, but I don't know the details or if this is the plan.

Just confused, and I've never had a real conversation about this - I hear "print money, tax money" but it seems too simplistic.

Do you happen to know?

[jollyllama]

I'm not sure as to the specifics of this scenario, but as a general rule, the paying of debt is the destruction of money, because the debt now no longer exists on the balance sheet of the creditor. And I believe that's applicable here.