Question: If the federal government (and/or Treasury) can just create money, why does it have to borrow it from other countries?
Paul Solman: Great question. Because it’s so cheap to do so right now, the thinking goes, why NOT borrow?
In other words, if the rest of the world is so afraid of every other currency on earth that it’s willing to give us its money at very low interest rates for safe keeping, why not let it? We then use that money to stimulate the world economy, starting here in America, something the world isn’t doing sufficiently (as we see it) with its own money back home.