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Ask Dave

Where Does The Money Come From?

Liz wants to know where the government gets their money from, in this clip from September 22, 2008.

QUESTION: Liz asks where we are borrowing this $1 trillion from that the government is using to bail out these financial institutions.

ANSWER: It’s just increased national debt. When the nation doesn’t pay its bills or doesn’t have a balanced budget, we go further into debt every minute. The government issues a promissory note, called a treasury bond. If you buy one, the government owes you that money. It’s a very safe and low-interest investment. Part of the danger is that foreign investors have bought that, so we are deeply in debt to China and other countries that don’t have our best interest at heart.