Wikipedia:Reference desk/Humanities: Difference between revisions
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:::Yes, most would-be government debt holders would likely choose foreign sovereign debt or other domestic AAA rated fixed income securities. But, as I mentioned, the international outflow of capital wouldn't reduce the domestic money supply. It would just reduce the demand for the domestic currency and would likely reduce the rate of exchange. This could actually be inflationary (imports become relatively more expensive), especially in a country with a large [[trade deficit]]. I mainly wanted to point out that the monetary effects (inflationary effects) of this sort of fiscal policy relies estimating a whole lot of variables. It is also likely to have a lot of other unintended effects as well (changes in the trade deficit/surplus, high income people moving overseas, less domestic private investment being [[Crowding out (economics)|crowded out]] by government debt etc.).
:::[[Open market operations]] aren't the same as the government issuing more debt (or paying interest on [[bank reserves]], discussed above). Regardless of the federal government fiscal situation (how much debt it issues, what rates it gets etc.), the central bank influences short-term interest rates, inflation and, more directly, the money supply by buying and selling government bonds or other assets on its own account. If the federal government decides how many bonds are in existence, the Federal Reserve strongly determines how many are in public circulation. The Federal Reserve can create more money, either physically printing it (technically the Treasury's Mint prints it, the Fed just puts it into circulation, I believe), or putting it into the reserve accounts held by member banks, in exchange for government debt (or other assets), increasing the money supply. Or it can sell those acquired government bonds (or other assets), decreasing the money supply (taking money out of circulation). These monetary actions are, preferably, independent from the federal government's fiscal actions. [[User:NByz|NByz]] ([[User talk:NByz|talk]]) 15:46, 27 March 2010 (UTC)
== Allowing someone dearly loved to die for someone else ==
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