A Modern Monetary Theorist would look at the other side of the ledger and write, “U.S. Dollar Assets Held by Non-Federal Entities Up $7 Trillion Under Obama.” And he or she wouldn’t necessarily consider this outcome catastrophic or even harmful.
Because users of the U.S. dollar live in a closed financial system, the dollars in those assets have to come from the Federal Debt because they literally can’t from anywhere else.
Notice the title of this article:
$7,060,259,674,497.51--Federal Debt Up $7 Trillion Under Obama http://www.cnsnews.com/news/article/terence-p-jeffrey/706025967449751-federal-debt-7t-under-obama
A Modern Monetary Theorist would look at the other side of the ledger and write, “U.S. Dollar Assets Held by Non-Federal Entities Up $7 Trillion Under Obama.” And he or she wouldn’t necessarily consider this outcome catastrophic or even harmful.
The Federal Debt seems to track the build up in retirement assets, for example: http://research.stlouisfed.org/fred2/graph/?g=mzu.
Because users of the U.S. dollar live in a closed financial system, the dollars in those assets have to come from the Federal Debt because they literally can’t from anywhere else.