The federal deficit is easy to understand. The feds have a lot of expenses, paying the bureaucrats, paying the troops, paying social security, paying medicare, paying for the armed forces, and on and on. Last year outgo was like $15 trillion. Income from taxes was a lot less. Say $12 trillion. To keep the checks from bouncing, Uncle Sam borrowed $3 trillion.
Actually, Uncle doesn't borrow the money, he prints it. Works like this. Uncle sells US Treasury bonds (soundest investment on the planet). Bond buyers give Uncle money in exchange for bonds. Thing is, T-bills are near as good as money. Granted bonds aren't accepted down at Walmart, but, the bondholder can turn bonds into cash with a simple phone call to his broker. There is a market, open every business day, and a sell (or buy) goes thru within hours. So, a man with a big wad of T-bills in his safe deposit box feels as wealthy as a man with the same amount of cash. My college economics course called bonds "near money". And printing near money is really the same thing as printing cash (real money).
So, what's wrong with printing money? As more and more money is printed, the value of the money goes down. US money today is only worth 10% of what it was worth when I was a kid. Gasoline used to be 28 cents a gallon. It's nearly ten times that today. Comic books used to be 10 cents. Last time I bought a child a comic book it set me back $4. Ice cream cones used to be 5 cents. More like $2.50 this summer.
What this means, is anything saved over my life time is only worth a tenth of what it ought to be.
That's the undertable tax. It nails us all.
And neither The Donald nor Hillary are talking about cutting the deficit. Hillary is talking about increasing it a lot. Vote for Trump. Don't get fleeced.
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