Ask HN: How is the US coronavirus stimulus package (CARES) financed? I can't seem to find any reliable sources on this — is the U.S. selling more debt to other nations (who?)? Is the Fed effectively printing money to finance the stimulus? |
Ask HN: How is the US coronavirus stimulus package (CARES) financed? I can't seem to find any reliable sources on this — is the U.S. selling more debt to other nations (who?)? Is the Fed effectively printing money to finance the stimulus? |
A. The Fed doesn't print money. It instead creates digital dollar credits that are as good as cash. Many of those digital dollars will not actually get spent and will be deposited back inside accounts at the Fed or at other banks. But if enough of that money does eventually get withdrawn in order to be spent, then that can conceivably increase the demand for actual dollars. If so, the Treasury may have to increase the supply of dollars.
That's where printing dollars comes in. But in this case, it would likely only amount to a small fraction — if any — of the $2 trillion stimulus.
https://www.cbsnews.com/news/coronavirus-stimulus-package-pa...