Liberty Street Economics

« | Main | »

November 28, 2018

Feed You can follow this conversation by subscribing to the comment feed for this post.

I follow Bill Mitchell and as a result of that I believe that Treasuries do not fund Congressional spending. They are irrelevant to Congressional spending, in fact. Anyway, this particular blog, in my humble opinion, misleads the reader and reinforces the veil that somehow the federal fiscal statement is just like our family budget. The federal government’s fiscal statement of expenditures and receipts cannot break down or get sick. It is simply a record of dollars spent into existence and dollars taxed out of existence. It is impossible for a government to borrow its own currency. When the central bank sells Treasuries in exchange for reserves, it is merely swapping one non-government sector asset for another. Reserves get converted into bonds of equivalent value. Bond issuance is a portfolio reshuffle for the non-government sector. It does not net add financial wealth to the non-government sector.

In reply to Jose Oyola: Data on net foreign purchases of U.S. Treasury securities are published in table 7 of the International Transactions data release from the Bureau of Economic Analysis. Data through the second quarter show that the pace of these purchases is down in the first half of 2018 relative to the first half of 2017. Foreign investors will continue to buy these securities and may well pick up the rate of purchases going forward. The point of the blog was that the substantial jump in the fiscal deficit has so far not caused the U.S. economy, as a whole, to borrow from foreign investors at a faster pace than it was before the tax cut.

What in the world is “Government Savings”? The Government literally owns the printing press for US Dollars. The government can spend or not spend. It doesn’t need an investment or savings account. How are they “saving” money?

How do you reconcile the national stats in this article with the UST data on foreign ownership disclosed in

The comments to this entry are closed.

About the Blog

Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

The editors are Michael Fleming, Andrew Haughwout, Thomas Klitgaard, and Asani Sarkar, all economists in the Bank’s Research Group.

Liberty Street Economics does not publish new posts during the blackout periods surrounding Federal Open Market Committee meetings.

The views expressed are those of the authors, and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.

Economic Research Tracker

Image of NYFED Economic Research Tracker Icon Liberty Street Economics is available on the iPhone® and iPad® and can be customized by economic research topic or economist.

Economic Inequality

image of inequality icons for the Economic Inequality: A Research Series

This ongoing Liberty Street Economics series analyzes disparities in economic and policy outcomes by race, gender, age, region, income, and other factors.

Most Read this Year

Comment Guidelines


We encourage your comments and queries on our posts and will publish them (below the post) subject to the following guidelines:

Please be brief: Comments are limited to 1,500 characters.

Please be aware: Comments submitted shortly before or during the FOMC blackout may not be published until after the blackout.

Please be relevant: Comments are moderated and will not appear until they have been reviewed to ensure that they are substantive and clearly related to the topic of the post.

Please be respectful: We reserve the right not to post any comment, and will not post comments that are abusive, harassing, obscene, or commercial in nature. No notice will be given regarding whether a submission will or will
not be posted.‎

Comments with links: Please do not include any links in your comment, even if you feel the links will contribute to the discussion. Comments with links will not be posted.

Send Us Feedback

Disclosure Policy

The LSE editors ask authors submitting a post to the blog to confirm that they have no conflicts of interest as defined by the American Economic Association in its Disclosure Policy. If an author has sources of financial support or other interests that could be perceived as influencing the research presented in the post, we disclose that fact in a statement prepared by the author and appended to the author information at the end of the post. If the author has no such interests to disclose, no statement is provided. Note, however, that we do indicate in all cases if a data vendor or other party has a right to review a post.