Reply To: Government Debt and Wealth Inequality


I think you’re on to something, but I think the mechanism would be more like this: The government is able to offer above-market yields (accounting for risk of default) because it has the power to coercively raise the funds to pay back the lenders. Thus the lenders benefit from this whole scheme (if they didn’t prefer to invest in Treasuries, they wouldn’t do it) and the taxpayers ultimately bear the brunt of it.