# Repayment of government debt by creating credit for the issuance of Fed corporate bonds

**URL:** <https://governance.worldlibertyfinancial.com/t/repayment-of-government-debt-by-creating-credit-for-the-issuance-of-fed-corporate-bonds/39594>\
**Category:** General\
**Created:** [August 20, 2025, 10:09am UTC](https://governance.worldlibertyfinancial.com/t/repayment-of-government-debt-by-creating-credit-for-the-issuance-of-fed-corporate-bonds/39594 "2025-08-20T10:09:48Z")\
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**Author:** ![rui\_enomoto](https://yyz2.discourse-cdn.com/flex034/user_avatar/governance.worldlibertyfinancial.com/rui_enomoto/32/9644_2.png) [@rui\_enomoto](https://governance.worldlibertyfinancial.com/u/rui_enomoto)\
**Post date:** [August 20, 2025, 10:09am UTC](https://governance.worldlibertyfinancial.com/t/repayment-of-government-debt-by-creating-credit-for-the-issuance-of-fed-corporate-bonds/39594/1 "2025-08-20T10:09:48Z")

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Repayment of government debt by creating credit for the issuance of Fed corporate bonds

> **Summary**
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> 1. Background
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> In the modern U.S. central banking system, the Federal Reserve (Federal Reserve Board) has a relatively small capital, and its financial risk absorption is effectively dependent on federal guarantees. As a result, the U.S. government has been forced to raise fiscal funds by issuing deficit government bonds, increasing the burden of interest payments and dependence on tax revenue.
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> 1. Outline of the proposal
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> This proposal eliminates the fiscal deficit and provides the government with the possibility of tax-free financial management by combining credit creation through the issuance of FRB corporate bonds, the increase of Fed capital, and the issuance of government banknotes dedicated to debt repayment.
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> 1. Significant increase in FRB capital
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> • Set up a huge amount of capital in the FRB
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> • Accumulate and manage profits from credit creation in capital and establish a financial foundation that does not depend on government borrowing
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> 1. Fundraising through the issuance of FRB corporate bonds
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> • Based on a huge amount of capital, the Fed issues corporate bonds to raise funds from the market
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> • Funds raised are used for monetary policy and market intervention, reducing dependence on government deficits
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> 1. Issuance exclusively for debt repayment of government banknotes
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> • The U.S. government does not use banknotes for new spending, but issues them exclusively to redeem existing debt.
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> • Direct repayment of government bonds is possible, eliminating the need for new borrowing or dependence on tax revenue.
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> 1. Expected effect
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> 2. Improving the independence and credibility of the FRB
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> • Huge capital increases the ability to absorb losses and expands the freedom of policy management
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> • Market psychology evaluates that “the Fed will not fall”, strengthening the credibility of the dollar
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> 1. Reducing the burden of U.S. government debt
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> • Government banknotes dedicated to debt repayment can directly carry out government bond repayment
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> • There is no need to issue new government bonds or depend on tax revenue, and tax-free financial management is possible.
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> 1. Improving the flexibility of policy management
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> • By creating credit by issuing huge capital + Fed corporate bonds, it is possible to integrate monetary and fiscal policy.
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> • Interest rate and inflation management can be implemented while supporting the credibility of the market
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> 1. Constraints and points to note
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> • Legal: Amendments to the Fed Act and the U.S. Fiscal Act are mandatory
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> • Economic: Huge capital, issuance of Fed corporate bonds, and inflation risk management associated with the issuance of government banknotes are required
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> • Policy management: It is important to design that does not compromise independence due to private investment and Fed bond interest payment pressure
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> 1. Conclusion
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> By combining the increase in FRB capital, creating credit by issuing FRB corporate bonds, and issuing government banknotes exclusively for debt repayment, tax-free financial management without the need for U.S. government borrowing will be possible, and the Fed’s creditworthiness and policy management capabilities can be maximized. Present a financial and fiscal paradigm.