government and rates, page-4

The government is now a corporation and the main game is in maintaining their credit rating and keeping up the monthly interest payments. If they lower taxes (theft)then their ability to meet those repayments goes down and their credit rating (i.e. their ability to borrow more soon follows). Couple that with the gross incompetency/treason of your average government then you have the total disaster that is the world today.

You know the anecdote about the person who lives on maxed out credit cards and just manages to pay the interest each month? Same thing. Only in this case the only 'income' the government has is what it pinches from the people who actually work for a living, that's you BTW. So by dropping interest rates and hoping the banks will do the same they know that will free up a bit of income from going into mortgage payments so that people will have more to spend. And if it's spent then it's taxed.

What I can't figure out is how having the Reserve drop their rates effects the banks. Do the banks borrow from the Reserve? If so then where does the Reserve get it's money from? If it creates it (as it's supposed to) then why why are the federal and state governments in debt for hundreds of billions of dollars in the first place? If the Reserve borrows it then who from and how much leeway do they have to play with interest rates anyway? As usual, I smell a huge rat.