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fund military pay during the shutdown with cash by selling IOUs to the Federal Reserve.

Created by G.A. on September 30, 2013

The federal government is expected to pay the military with IOUs when it runs out of money. Instead, issue the IOUs to the Federal Reserve and collect spendable cash that can be used to pay the military. This serves two important purposes. It puts cash directly into consumer pockets, boosting the economy. That will help head off potential deflation (a major fear of the Fed). It also becomes a tool to expand financial options that otherwise would not exist. What happens to the IOUs after the shutdown ends is a matter of policy that can be resolved later.

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