Where Does All the Money Go? (2024)

FAQs

Where does most of the money go? ›

The U.S. Treasury divides all federal spending into three groups: mandatory spending, discretionary spending and interest on debt. Together, mandatory and discretionary spending account for more than ninety percent of all federal spending, and pay for all of the government services and programs on which we rely.

Ecclesiastes 10:19-20 King James Version (KJV)

A feast is made for laughter, and wine maketh merry: but money answereth all things. Curse not the king, no not in thy thought; and curse not the rich in thy bedchamber: for a bird of the air shall carry the voice, and that which hath wings shall tell the matter.

The bank lending process

Only a small portion of your deposits at a bank are actually held as cash. The rest of your money (the majority of the bank's assets) is invested by the bank into vehicles such as consumer or business loans, government bonds and credit cards. Borrowers have to pay the bank back with interest.

In 2023, major entitlement programs—Social Security, Medicare, Medicaid, Obamacare, and other health care programs—consumed 50 percent of all federal spending. Soon, this spending will be larger than the portion of spending for all other priorities (such as national defense) combined.

Millionaires also bank differently than the rest of us. Any bank accounts they have are handled by a private banker who probably also manages their wealth. There is no standing in line at the teller's window. Studies indicate that millionaires may have, on average, as much as 25% of their money in cash.

Annual totals are based on data from April of each year. Inflation adjusted to the 2023 calendar year. As of April 2024, the five countries owning the most US debt are Japan ($1.1 trillion), China ($749.0 billion), the United Kingdom ($690.2 billion), Luxembourg ($373.5 billion), and Canada ($328.7 billion).

So, dollars in circulation are backed by government debt. However, it is important to realize that physical currency is only a tiny portion of the total money supply. This is because most money is created by commercial banks, not the Federal Reserve.

The primary sources of revenue for the U.S. government are individual and corporate taxes, and taxes that are dedicated to funding Social Security and Medicare. This revenue is used to fund a variety of goods, programs, and services to support the American public and pay interest incurred from borrowing.

Money is not everything, but money is something very important. Beyond the basic needs, money helps us achieve our life's goals and supports — the things we care about most deeply — family, education, health care, charity, adventure and fun.

Is money good or bad according to the Bible? ›

The biblical teaching on money is thus two-fold: money is a gift from God, a sign of his blessing. But it is not to be a god in itself. The Bible is not ascetic; poverty is not inherently virtuous, nor is wealth sinful. But true wealth, the Bible teaches us, is spiritual, not material.

Money is a tool of evangelism, discipleship, and serving others. Jesus tells his disciples, “And I tell you, make friends for yourselves by means of worldly wealth so that when it fails, they may welcome you into eternal dwellings” (Luke 16:9).

Although governments do hold power over countries' economies, it is the big banks and large corporations that control and essentially fund these governments. This means that the global economy is dominated by large financial institutions.

Like banks, which are federally insured by the FDIC, credit unions are insured by the NCUA, making them just as safe as banks.

The Board of Governors—located in Washington, D.C.—is the governing body of the Federal Reserve System.

Savings accounts, certificates of deposit (CDs), money market accounts, cash management accounts and investment accounts are all possibilities. Which should you choose? That depends on how far away your goal is, how much you hope to earn on your cash and how often you want to access it.

Peru/Peruvian Sol

This South American country offers tons to do — there's exploring the 15th-century Inca citadel of Machu Picchu, the Maras salt flats, the Amazon River, and the beach-strewn coasts. Even with a tourism boom, your dollar will go far here against the Peruvian Sol.

Almost none of it exists in bank vaults. Most of the world's money is not physically stored in one specific location. Instead, it exists in various forms and locations within the global financial system. The majority of money is stored electronically in banks and other financial institutions worldwide.