U.S.A. Debt Crisis So Bad, Possibly No Way Out?

Really? One has to live under a rock to not realize this game can't continue. In Weimer Germany one bought as much tangible property as soon as one could in order to be redi to go so that the next days inflation did not prevent them from buying something or anything useful. When hyper inflation kicks in it will be to late for most to react. Convert your holdings from monetary to tangibles while you can.

Fiat currency works fine, it has been proven in many studies the world over. Backing a currency with a commodity, especially one as rare as gold puts a hard cap on the amount of money in the system. This leads to economic stagnation. The more common the commodity backing the value of the currency is, the less of an issue this is.

The trick to making fiat currency work however, is that it can't be debt based.

reply to post by Aazadan


How is more money introduced into the system? How was it introduced in the Colonial Scrip system, for example? Could you just send out a small amount to each household on a monthly basis?

There is only one surefire way to dramatically reduce the National Debt. Which is to drastically cut government spending and use that surplus cash to pay back securities that our government sold to other nations and private individuals.

We taxpayers currently pay about $2.7 trillion per year in taxes.
The Federal Government currently spends about $3.5 trillion per year.
See the problem?

If we could somehow cut government spending down to maybe $1.7 trillion per year, we could take that cash surplus of $1 trillion and really make a dent in the national debt.

Here is who we currently owe the most:
China - 1.265 Trillion
Japan - 1.1 Trillion
Caribbean Banks - 273 Billion
Oil Exporters - 272.7 Billion
Brazil - 252.6 Billion
Taiwan - 186.7 Billion
Belgium - 185.7 Billion
Switzerland - 183.3 Billion
United Kingdom - 163.4 Billion
Russia - 151.1 Billion
Hong Kong - 139.6 Billion
Luxembourg - 131.4 Billion
Ireland - 92.2 Billion
Singapore - 91.9 Billion
Norway - 73.9 Billion
France - 68.1 Billion
Germany - 64 Billion
Thailand - 58.8 Billion
Canada - 57 Billion
Mexico - 56.7 Billion
India - 51.9 Billion

However, there is a significant portion of the debt that I have no idea how we could possibly repay. Which is the amount that the Treasury owes the Federal Reserve. Because of the Quantitative Easing policy, the Federal Reserve purchased Securities from the US Treasury Department to the amount of $1.7 Trillion. And are now buying $85 billion in mortgage-backed securities per month.

So one part of our own government owes money to another part of our government. Which makes no sense.

Samtzurr
reply to post by Aazadan

 

How is more money introduced into the system? How was it introduced in the Colonial Scrip system, for example? Could you just send out a small amount to each household on a monthly basis?

The same way the fed does it now. It prints money and then buys bonds with that money. The main difference from what I understand is when congress controls it they're limited to only buying government bonds, which limits spending to public works projects (bridges, parks, schools, roads, infrastructure, and so on). The fed however can create money to buy anything they want, it doesn't even have to be in the US. If the fed wants to they can finance the construction of a statue of Hitler in Germany. Basically, it works through trickledown. A city creates a bond, the central bank (public or private) finances that bond by creating money, the city gets the money, and then uses that money to hire construction teams, employees, materials, and so on for the project.

Directly sending money to the citizens would work too though, especially in an age where electronic transfers are commonplace. I think the issue you would run into here though is people directly voting themselves money from the treasury. Most people are against QE and pumping 83 billion into the economy every month (this is $261 per person) to keep things afloat. It is considered totally unsustainable. If the people were directly pocketing that money though the opposition to the program and likelyhood it would be discontinued are greatly lowered.

allenidaho
There is only one surefire way to dramatically reduce the National Debt. Which is to drastically cut government spending and use that surplus cash to pay back securities that our government sold to other nations and private individuals.

Debt on a national scale doesn't work the same way as debt on an individual level. There's no ability to repay it. Infact, even if we had a real desire to pay it back it is literally impossible without a new monetary system. Each dollar that's created is created at interest, in order to pay that interest which is only payable in dollars, more dollars have to be created. Every dollar in circulation is created this way, in order to fully repay the debt (which is more than just the US national debt) it would literally take every single dollar on earth and then more dollars in addition to that.

Furthermore, nations being in debt to each other is being used as a tool to prevent wars between major powers. Debt is wiped out when war is declared, in order to prevent wars every nation has indebted itself to every other nation and then used that debt as collateral on their currency. Through this system war between developed nations is virtually impossible as it would crash both economies overnight. Repaying debt to nations is a very dangerous move and would probably spark a world war as the direct outcome is destabilizing everyones currency.

buster2010
Well seeing how the debt really doesn't exist because the money is really make believe with nothing to back it like gold just tell the Fed to go get screwed. Then America can print it's own debt free money like we should have been doing all along.

.

that is the kind of sensible thinking that got a few presidents shot in the jaw

reply to post by Aazadan


reading your post made me think of the merchant of venice by shakspere or was it bacon and the character shylock wanting his pound of flesh .

hundreds of years later and shylock is getting his pound of flesh over and over again

buster2010Well seeing how the debt really doesn't exist because the money is really make believe with nothing to back it like gold just tell the Fed to go get screwed. Then America can print it's own debt free money like we should have been doing all along.

Exactly my point.

Except commercial bank money is just as much make believe as the cotton notes printed by the FED.

If not more so.

It's not even backed by the paper IT'S NOT printed on.

Aazadan
Fiat currency works fine, it has been proven in many studies the world over. Backing a currency with a commodity, especially one as rare as gold puts a hard cap on the amount of money in the system. This leads to economic stagnation. The more common the commodity backing the value of the currency is, the less of an issue this is.

The trick to making fiat currency work however, is that it can't be debt based.

Fiat currency should be issued without commodity backing by the government, debt free.

Both the FED (your central bank) and all banks in general issue debt money with no backing to it. You can't redeem it in anything at the issuing bank.

You don't even know which is the issuing bank.

And there's a very strong incentive for banks to lend because that's how they make money.

Thing is, the money they lend, they issue out of nothing by very the act of lending it, through Fractional Reserve Banking.

Which means the expense of bank lending is actually socialised through inflation.

It's the society at large that's lending to itself. Not the bankers.

So why should the bankers gain from it?

Especially as the interest they charge also comes from money they issue out of nothing, collectively. Because that's the only money we use. Their credit.

So, basically, when a bank makes a loan they are printing (issuing out of nothing) their future income.

A huge conflict of interest.

Samtzurr
reply to post by Aazadan

 

How is more money introduced into the system? How was it introduced in the Colonial Scrip system, for example? Could you just send out a small amount to each household on a monthly basis?

New money is issued into existence and the economy through bank loans to the companies and general population.

Money is retired from the economy and existence through the monthly payments of the debtors to the banks to service their debt.

But there's always more new money being injected than old money is being retired.

Otherwise there wouldn't be anything with which to pay the interests on the loans in the first place.

It's legal counterfeiting and counterfeit money laundering.

That's what the world economy is based on.

allenidaho
There is only one surefire way to dramatically reduce the National Debt. Which is to drastically cut government spending and use that surplus cash to pay back securities that our government sold to other nations and private individuals.

We taxpayers currently pay about $2.7 trillion per year in taxes.
The Federal Government currently spends about $3.5 trillion per year.
See the problem?

You haven't the faintest clue what you're talking about.

The reason for the debt is because all money is continually loaned into existence (out of nothing) as interest bearing loans, by the debt (banking) monetary system.

If the money had simply been spent into existence (out of nothing) by the government (instead of borrowed into existence at interest from the private, for profit banking system which likewise issues it out of nothing) there would be no debt.

The debt is make believe.

Only ignorant people believe it is real and means anything.

Also, if they cut spending that won't be interest payments on the money issued out of nothing as interest bearing loans by the private bankers.

No.

And it won't be military spending either.

No, it will be useful social programs and expenditures. Like SNAP, Social Security etc.

Yet that's exactly what people like cheer and clamour for.

Dollar used to be backed by gold. Its now backed by DOD superiority. When the DOD fails that is when you can start to worry.

XevenDollar used to be backed by gold. Its now backed by DOD superiority. When the DOD fails that is when you can start to worry.

Money doesn't need to be backed by anything.

It can just be and circulate, as long as it is impossible to counterfeit and no more of it is ever issued.

They just need to stop issuing it (the only purpose to issuing money is to redistribute wealth and spending power, no new spending power is created, just the existing one diluted/redistributed) and cancel the onerous, odious and fictitious debt to the banks, which issued the money out of nothing yet demand it back with compound interest and are the reason for the budget deficit in the first place.

# the bankers.

And stop issuing money, just cancel all bank debt and outlaw banking as the fraud it is.

Release yourselves from your imaginary shackles so you can then free the rest of the world too.

If you can't/won't do it, who will?

USA debt is around $17 trillion is it not? The Iraq and Afghan wars alone have cost the US anywhere between $4-6 trillion. Add in low tax rates, etc (not advocating a rise, don't panic!) and you can see how this total could be fairly easily overcome in a short period of time.

The key thing is getting the basics right. Personally speaking, i do not see that happening though..............