- Elon Musk claimed 14 computers in the treasury department Other government agencies just “send money from nothing” during the podcast perform with Senar Ted Cruza (R-Texas) on Monday. It seemed to criticize Government bookkeeping, although it is worth noting that the government can in fact print money at no cost.
Elon musk said that “crazy” US government computers It can only “make money from thin air.” Since America completely left the gold standard in 1971, international finances have only depended on it.
Admittedly, it is difficult to decipher what Musk referenced when he spoke of “magical monetary computers” at the Ministry of Finance and other government agencies on a Podcast appearance Monday with Senar Ted Cruza (R-Texas). Men’s comments came to a broader conversation about Doge’s search for waste, fraud and abuse in the Federal Government. Agency says $ 115 billion in savings was found, though Wealth analysis suggests that the figure is significantly overrated. Musk and Cruz discussed what they characterized as a complete breakdown in state bookkeeping.
“I think we’ve found 14 magical cash computers now,” Musk said. “They just send money out of nothing.”
Hedge Fund and Manager ETF Jay Hatfield, Executive Director of Infrastructure Capital Advisor, said Tesla Executive Director may suggest that much of the Government does not carry out properly double -entry accountingwhere a financial transaction must have the same and opposite effects on at least two different accounts. This seems a little hard to believe, Hatfield said, but he did not completely relented the possibility.
“If it were public society, it would be right away,” Musk said of the Government. “That would fail, and the company’s officers would be closed.”
And Washington, DC edit Cruza and the Ministry of Finance did not respond to the commentary request.
In the meantime, others have suggested that Musk can express confusion about how the US government basically can issue money to pay their own spending. Cruz and retired Republican Senator in Kentucky long discussed The Government basically taxes its citizens without representing the issuance of currency and causing inflation.
“Every computer that can only make money from the air,” Musk said, “it’s magic money.”
David Andolfatto, former Senior Vice President of the Federal Bank of St. Louisa, he said the language was red herring. Banks do the same when they borrow deposits, he said, or when a corporation such as men’s Tesla issues a number of stakes, diluting the value of existing shares.
“What Musk probably tried to communicate was that resources dedicated to these agencies were not properly revised or no appropriate supervision,” said Andolfatto, who is now chairing the Department of Economics of the University of Miami. “That may be true or false, I don’t know, but the fact that the government can print money from thin air is neither here nor there.”
How does the US print money
The government, of course, can do just that, whether or not Musk referred to the creation of money or not. Ex -food chair Ben Bernanke Explained this concept during the famous speech The National Club of Economists in 2002. The US dollar, he said, was valuable only in that it was strictly limited in supply.
“But the US government has a technology, called a printing press (or, today its electronic equivalent), which allows it to produce as much American dollars as it wants basically without cost,” Bernanke said in his address. “Increasing the number of US dollars in circulation or even a credible threat to do so, the US government can also reduce the value of dollars in terms of goods and services, which is equivalent to increasing the prices in dollars and goods and services.”
While the treasury monitors the print of the account and forging coins, it is Fed This creates money in practice by buying property – vaults – the sets – from commercial banks, which, as a result, receive a financial injection. Banks then create a loan by borrowing some of that money.
But as Bernanke admitted, this increase in the cash offer can be inflator. In an extreme situation, the Government may be tempted to excessively betray the currency to help pay the debt, encouraging the species hyperinflation Germany endured after the First World War, which is usually attributed to the main cause of the Nazi Party’s rise.
The Fed does not buy government debt from the treasury directly, but distributes its profit to the government. Libertians like Paul state that this dynamics lead to similar incentives. In his 2009 book Finish the FedPaul noted that a collection of goods and services worth $ 1 in 1913 cost $ 21 at the time of publication.
“Another way to look at this is from the perspective of buying a dollar purchase,” Paul wrote. “He remained at less than $ 0.05 from 1913 values. We could say that the Government and his banking cartel stole $ 0.95 together from every dollar, as they continued the relentless inflation policy.”
Andolfatto acknowledged that inflation is a consumers tax. “Seigniorage revenues,” he noted in a 2011 blog post, “refers to the buying power that the Government creates through the act of creating a new money.”
Still, he called Paul’s claim “nonsense”. The National Money’s stock in 1913 really lost 95% of its value over almost one century. This was not the case, however, for a dollar published in recent times in, say, 2010.
“This supply of money from 1913 represents a small part of our overall wealth,” Andolfatto wrote. Moreover, since it has been in traffic for almost 100 years (much of them have held them in the form of reserve), the loss in its purchase power has been extended to countless individuals, agencies and generations. “
This story is originally shown on Fortune.com
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