Why can’t the FED buy and forgive government national debt? via /r/wallstreetbets #stocks #wallstreetbets #investing

Why can’t the FED buy and forgive government national debt?

Allright retards, bear with me on this one.

A few weeks ago, John Stewart interviewed former FED president and CEO Thomas Hoenig and asked him this simple question: (I’m paraphrasing) why can’t the FED just buy government debt and forgive it? The guy didn’t provide a solid answer other than it’s complicated. So bear with me if this question shows how much little I know about economics and financial markets. I did do some homework and I found that the FED has a program called “Quantitative Easing” (QE) where they simply create new dollars into existence from thin air and buy assets from banks with those new money, so if that’s the case then why can’t the FED (FEDERAL reserve) just print new money and buy all the I owe you (IOU) notes that the government issues for it’s debts and just erase them entirely, eliminating all government debt? Aren’t the IOU notes just another asset and if they can buy assets from money they created then what’s stopping them from printing another 30 trillion dollars and buying all the debt and simply destroying those IOU notes? Also if the FEDERAL reserve (a government entity) can just print new money then why does the government take so much of my taxes? Can’t they just print new money and use it to finance whatever they want like they’ve been doing recently?

Submitted March 04, 2022 at 08:31PM by incrippletion
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