Fiat Money vs. Federal (Public) Debt

By | August 24, 2017

Fiat money

  • Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity.
  • The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.


Federal (Public Debt)

  • Public Debt in the United States is principally the debt of the federal government.
  • In 2005 federal debt was about 60 percent of GDP.
  • But in the last ten years the federal debt has almost doubled to 103 percent GDP.



  • At the end of FY 2017 the gross US federal government debt is estimated to be $20.4 trillion, according to the FY18 Federal Budget.
  • Of this gross amount, debt “Held by the Public: Other” is estimated by at $12.4 trillion, debt “
  • Held by the Public: Federal Reserve System” (i.e. monetized debt) is estimated by at $2.46 trillion and debt “Held by Federal Government Accounts” is estimated at $5.53 trillion……(government printing money?)