Woolleybugger
Mayor
The trustees are likely using a model that reinforces the notion that the money the government can spend is limited to what they take in as revenue plus what they borrow from investors (tbills). The budget is really not that important to the solvency of this program unless someone decides that the budget itself is the most important factor. I used to think this myself. But now I have finally understood the real nature of fiat money and a sovereign currency. The most important goal of all monetary and fiscal policy should be creating an economy that works for as many as possible without getting too hot or too cold. Right now, the FED is mostly propping up balance sheets and injecting money into the system through financial institutions. I think it is limited by law in this manner.
There is no limit to what we can borrow from investors theoretically. It is only limited by policy and inflation. The FED can inject money into the system at any part of the system if legislation allowed it. This is an issue of policy not budgets. Change the policy and the problem goes away.
There is no limit to what we can borrow from investors theoretically. It is only limited by policy and inflation. The FED can inject money into the system at any part of the system if legislation allowed it. This is an issue of policy not budgets. Change the policy and the problem goes away.