The main purpose is definitely to supply the government with currency. Many countries put imo unnecessary restrictions on themselves and do not borrow directly from the central bank which would be simpler and cheaper.
replyIf that were true we wouldn't have corporate bond markets, and municipal bond markets, and mortgage bond markets. All of these are capital markets where the capital goes to either a private party or a non-monetary-authority government.
replySeignoriage (the practice of the government directly issuing currency to fund its government expenditures) has been around for about 2500 years and predates the invention of the bond market described in this article by roughly 1500 years.
simpler - yes, but that would also lead to a debasing currency, hyperinflation, and guaranteeing that nobody else would buy your bonds.
replyWouldn't that be just more complicated way to print money? With weird question about would it ever be possible lower debt without actually printing...
replyMoney comes from debt. Debt is essentially the way to print money.
replyNo. Money is a type of debt, but a very special type, one that has no duration and is available now rather than locked up for some period of time. When the treasury sells bonds, it replaces "unlocked" money with "locked" money in the private sector, decreasing the amount of unlocked money in the private sector to balance the increased amount of unlocked money in the public sector. The amount of unlocked money remains constant.
replyIf the Federal Reserve prints reserves (unlocked money) to buy bonds (locked money) and keeps doing this as they mature so that WALCL goes up and to the right, that's money printing.