I set up an account with the U.S. Treasury. You do this by sending a certified cashiers check say for $1000 to purchase say a 10 year bond. Then, the government will pay you interest on that bond, (after it makes sure your check is good) every six months. (It can be more, but it must be a cashiers check, certified) Then you have an account....
So after I set up an account in 96, I bought a 30 years bond..for a certain amount..and federal government pays 6 and 3/4 percent on the money I loaned it in 96. It has been paying that interest every six months for the last 22 years. Not a bad deal, and anyone can set up an account like this..... (6 and 3/4 was the going rate in for a 30 year bond in 1996..mortgages cost much more than they do now, and interest rates in banks were also much higher..)
...Here is how it happened...In the 80s the Democratic Party complained that only banks could help finance loans to the United States Treasury...So the Republicans agreed to allow normal investors like me, invest in U.S. treasury loans. So that is how these accounts were set up.. So the answer is...The Government of the United States borrows from its citizens, banks, IRAS. Pension Funds.. other countries ..and guess what? I have heard that the social security fund, has investments in bonds and government "notes"...(notes are loans that are 10 years and less) they are just as good as the "bonds"
Why are they just as good?...here is the key.....If the U.S. government does not pay the interest on its loans then all of us are fucked...because paying back loans supports the value of the government"s ...money..the dollars we spend on stuff. Let's say the government does not pay the interest on loans, or the loans themselves. What happens to those who have invested?..Fucked again. You see, the U.S. Government must pay the interest first to keep its good name to the borrowing community. Therefore it pays. It pays well to all who invest, not only the rich..but anyone with an account. The United States of America stands behind these loans..
In 2026, if I am alive, the federal government will dump amount of my loan into my checking account. Also, you may not believe this, but the interest on the loan the United States government has sent me...since 96.. at 6 and 3/4 %. has far exceeded already, the total amount that I loaned it. Not bad??? Oh, why 6 and 3/4 percent?...Well that was the going rate back then ..Interest rates were much higher than. The reasons ...well that discussion could go on forever.. Now interest rates are low. And I am not "rich." I heard about this on a TV stock market show in the 90s while I was on summer vacation. Say a person invested 10,000 in 1996 on a 30 year bond... So the government would be paying $675.00...(that is 6 and 3/4 percent) every year for 30 years on that 10,000 loan. That was the going rate then. I think the current rate on a 30 year bond is 3 percent? not sure..but it is in the newspaper every day. The government borrows almost everyday, so you can buy bonds almost everyday if you have an account........ (or if it were a $5000 purchase of a 30 year bond..yes you can buy them at any reasonable amount..then the interest would be $337.50 a year..on that loan)
I guess this is in response to the idea that Russia, China, etc. lends the U.S. government money. Well they buy our loans.....yes, So, do unions, banks, pension funds, citizens, and even the social security program..Why? not only does the government give a good interest rate..... but they are pretty damn reliable,,and they had better pay or we are all screwed....
and that is exactly what happens when some countries can't back up their loans..the money becomes worthless and the price of everything skyrockets beyond any logical level.. (too much?...but it shows that anyone can loan the U.S.Government money, if they set up an account)
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