I agree.
It's when I start aggregating what is held by other governments that I take pause.
But one can almost be considered "monetizing the debt" and the other can't.
So why bother to borrow dollars at 5% interest rather than just have the Treasury issue them for free?
You believe there is a big difference between the cost of each?
Toddsterpatriot, if I haven't mentioned it before, you ask excellent questions, and that is certainly a good question.
Thanks, I try.
Yes, that's the crux of my point, and perhaps it is flawed. My question is: Why can't it? It seems to me that any government providing low interest loans for non-market reasons provides the same concerns about monetizing the debt that the Federal Reserve doing the same. Do you see this differently?
You believe there is a big difference between the cost of each?
It is true that any profit that the Federal Reserve system takes in goes either to the Treasury or to its 6% dividends paid to the banks who own stock in the Federal Reserve system, so it is reasonable to point out that some of this nets out. (I don't think that that dividend is considered a preferred stock dividend; however, if it is, then that dividend would actually be considered an expense rather than shared profit from the Fed's viewpoint. That's something of a distinction without difference, though, since the Fed doesn't pay income taxes and the dividend is paid tax-free.)
However, for each dollar that we borrow from the Federal Reserve we do currently pay circa 5% each year that requires taxes from the taxpayer that would not have to be imposed if the Treasury had created the original note. (Well, I guess we could decide to pay our interest to the Federal Reserve in newly minted U.S. notes rather than collecting taxes to pay them. ;-)