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|Subject: ||Federal loan payments - who do they go to? (please dont delete!)|
I'm trying to figure out how loans work... Let's say there's $100 in the money supply. I ask the govt for $50 so I can go to college. The fed "prints" the $50 as national debt and gives it to my school. There's now $150 in existance.
I graduate and get a job and get $60, which I pay back to the federal reserve to pay off the loan plus interest. Where does that $60 go? It seems like $50 of the $60 would have to be destroyed in order to balance out the fed printing the first $50 in the form of my loan. If it isn't, we have inflation of 50% and a national debt. If it is destroyed, we have deflation since there is an equal amount of money ($100) and more people/productivity clamoring for it.
Please don't delete!
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