Forum Post: National Debt = The 1%'s Savings

Think about it. The nation incurs debt whenever money is created. The creation of money happens three ways.

1. The government acquires revenue by creating a treasury bond and selling it. The bond becomes the property of the buyer and thus part of their savings. The government also has their money to spend. The saving is new money and it added to the national debt.

2. Borrowing from the central bank. The fed prints money and lends it to the government to fund its operations. This money is paid out and generally winds up deposited in banks. The savings again is new money and its creation adds to the national debt.

3. A consumer goes to a bank and takes out a loan. As long as the bank has the required fractional amount of money on deposit, it may fund a loan with newly created money. This money also winds up in savings and is included in the national debt.

So it stands to reason that since the 1% have such a disproportional amount of the country's wealth they are also a disproportional majority of holders of the national debt.

The reason the 1% opposes spending is because their savings will be proportionally diminished. If the debt is doubled, the relative value of their savings is halved. This does not apply to most of the 99% who have little or no savings. The opposite is true for those with negative net worth. With more money around their debt is proportionally less.