Why all the Debt Hysteria?
So, the national debt is about to reach the $22 Trillion dollar mark. Should we be worried? First of
all, money is a creature of law, and under our current legal system, all money is issued as debt, whether government debt or bank debt. So, why all the hysteria over debt? To me, it speaks of a complete misunderstanding of what money is in the first place.
If you ask a heterodox economist, such a follower of MMT where money comes from, they readily tell you about government spending, bonds and bank loans. If you ask an orthodox economist, you generally get some muddled answer about fractional reserve or an admission of “gee, never really thought about it”. Debt Clock, Union Square, NYC
Money enters an economy in one of two ways: 1) The federal government spends it into existence, or commercial banks loan it into existence. All other money is simply recycled.