Hicks calculations wouldn’t pan out

In his [July 30] commentary, Michael Hicks suggests that the $1.6 trillion of U.S. Treasury Securities held by the Federal Reserve be wiped out (since they are debts the U.S. owes itself) and thus eliminate 11 percent of our total national debt. If that were done, however, the Fed would also have to write off an equivalent amount of bank deposit liabilities in order to keep its balance sheet in balance (which the Fed must do). Unfortunately, those deposit liabilities are assets on the books of banks throughout the country and cannot be eliminated.

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John Pardee, CPA