The Federal Government needs a couple of two or three trillion dollars, they've got a certain lifestyle to maintain between Social Security, Medicaid, Fighting (2) wars, Debt repayments from previously borrowed money, and backstopping the biggest, worst businesses in America (maybe even the world). Taxes are a wee bit down due to 10% unemployment and they have a pretty big shortfall.
What to do, what to do..... issue IOU's of course!!!! Uncle Sam's version of " I will gladly pay you Tuesday for a hamburger today" is the T-bill. So they set up their T-bill stand and start counting noses.... They can count on institutions they bailed out to put some of that Tarp money to work and we shouldn't neglect other central banks who will trade their crappy paper for our crappy paper (sort of a currency circle jerk) but past that the pickings are slim. So we have a short fall.
No worries! We will collect the money from the large institutions who support us (also known as "marks" or "johns") and then we will fire up the printing presses. To make it as simple as possible we are selling IOU's to ourselves. I'm sure that this will work out really well, I can't see how anything could possibly go wrong, after all this guy is in charge.....
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