A quick summary of things few people know about federal finances.

You might find this a helpful reference the next time you discuss federal financing.

1. It’s not really federal “debt.” It’s deposits into T-security accounts at the Federal Reserve Bank, similar to deposits into private bank savings accounts, but safer.
2. Those deposits pose no threat to the federal government’s solvency. As a Monetarily Sovereign entity, it can pay all its bills, of any size, simply by pressing computer keys.
3. Those deposits also pose no threat to taxpayers, since neither the deposits nor the interest are funded by taxes. The government creates new dollars to fund interest and all other federal spending.
4. The federal government has the power to pay off the entire “debt” (deposits) today, if it chose to, merely by returning all the dollars in those T-security accounts.
5. Federal deficits are in lockstep with T-security issuance legally, but not financially. As a Monetarily Sovereign government, the federal government never borrows dollars.
6. Even if the federal government collected $0 taxes, it could continue spending forever.
7. The purposes of T-securities have nothing to do with federal spending or taxing. The purposes are:
   A. To provide a safe, interest-paying place to store unused dollars and
   B. To help the Fed control interest rates by providing a base rate
8. The federal government also has the power to control market interest rates merely by changing its laws and/or by increasing or decreasing the supply of T-securities.
9. The federal government has the infinite ability to pay interest, simply by pressing computer keys. No taxes are involved.
10. Just as T-securities do not provide the government with spending money, federal taxes also do not provide the government with spending money. The purposes of federal taxes are:
    A. To control the economy by taxing what the government wishes to discourage and by giving tax breaks to what the government wishes to reward, and
    B. To assure demand for the U.S. dollar by requiring that taxes be paid in dollars.
11. Federal interest payments are economic growth dollars, added to GDP.
12. Federal deficit spending is necessary for economic growth. When the federal government has failed to deficit spend, we have had depressions or recessions. (See: https://mythfighter.com/2026/04/29/historical-bullshit-claims-the-federal-debt-is-a-ticking-time-bomb-from-sept-26-1940-to-april-20-2026/)
13. Recessions tend to be cured by increased deficit spending.
14. FICA does not fund Social Security or Medicare. The so-called “trust funds” are not real trust funds. Federal money creation funds those programs (and all other federal programs). The “trust funds” are line items tracking payments and disbursements, nothing at all like trust funds.
15. The greatest threat to the U.S. economy is the false belief that federal deficits and debt resemble private sector deficits and debt, and that the economy can grow without federal deficit spending. It has not. It will not. It cannot.
16. Inflation never is caused by “too much federal spending.” Inflation always is caused by shortages of crucial goods and services, most often energy and food.
17. Inflation is cured by increased federal spending to obtain and distribute the scarce items.

Rodger Malcolm Mitchell