Why We Can NEVER Get Out Of Debt. MUST READ!!!!!

Have you wondered how politicians can say things like "We need to spend our way to prosperity" or "Deficits dont mean anything" or even better "the only way to get out of debt is to spend more" Im going to explain it right now.

I started getting into this on another thread with someone when he couldnt figure out why I said that we NEED to have deficits and we NEED to create more and more debt. I want to point out although we NEED big debt and deficits doesnt mean I AGREE with it. Im just pointing out a major flaw in the monetary system we have. This system is MEANT to keep us in perpetual debt. So without further adieu...

Our money is debt. Yes our money has no value and in fact is only in existence because it was borrowed into existence. So the first thing someone will say is "No money comes from taxes, its not borrowed into existence." and I say to you "Where did that money come from that was taxed?" The fact is it came from the central bank known as the FED. The money is borrowed from the banks at interest and then put into circulation.

That money that is put into circulation is then used for production, goods, and services. Then once into circulation a % of this money is then taxed and put into the coffers of the federal government. That money is used to pay the interest on the money borrowed and used for the general budget. By the way this is a simplified version of it all because it is a little more complex but sometimes its best to keep things simple.

Now that I have given a basic overview of how our system works I will now point out why it is we can NEVER pay off our national debt and why we HAVE to run deficits.

Lets say I am the FED and I have just persuaded the US government to give me a monopoly on the currency. So the first thing we need to do is get some money into circulation. Lets say we start out with $10k. So I tell the US government give me a piece of paper promising me to pay back the money I lend you with interest lets say 5%. So the government issues a bond and gives it to the FED. Then I will then have $10k created and given to the government. The government then takes that money and puts it into circulation.

Here is where it gets interesting. So now the government is in debt for not only the $10k but also the 5% interest. But if only $10k in currency exists then where is the government supposed to get the money for the 5% in interest? Simple they have to borrow more money at more interest. So do you see how this cycle of perpetual debt is started? The government can NEVER pay off the national debt because if no one was in debt there would be no dollars out there. This is why they teach you that deflation is a bad thing. In a real economy however deflation is a GOOD thing.

Now lets get into the tax aspect because the government recovers some of this money via taxes. Lets say the government has a 35% tax on the $10k into existence. First I want to point out you can never tax the whole $10k because some of the money goes underground like in the drug or prostitution trade. That being said lets say we recover taxes on $8k. That is $2800 dollars. A portion of that money is used to pay the interest and the remainder put in the "general fund" which is used for the next years budget or for other spending that is needed.

So lets say our interest payment is $500 dollars. So that leaves us with $2300 to put towards the general fund. Now however there is only $7.2k money our there because we have taken $2800 from the circulation in the form of taxes. So now if we have 35% of lets say $5k (remember the underground money you have to account for) that is $1750 in taxes you get. Take $500 for your yearly interest payment and you have $1250 left. Keep in mind the $10k in debt is still in existence for we are only paying the interest on this debt and nothing towards the principal.

The end game in this is our government is forced to keep borrowing more and more money at interest to cover previous debt with interest. There is no getting around it that is our system. The hopes of paying off the national debt is a farce and will NEVER happen because no debt=no money because money is debt. Our currency is called a Federal Reserve Note. What is a Note? Note=debt. This is an over simplified version but if you disagree please let me know why.

Henry Ford "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

I suspect Ford understood this scam.

Instead of reading that long post how about just realize everyone is a slave to money and instead of 'in god we trust' the money should read 'this is your god'?

Simple solutions but everyone wants to continue playing their game instead of making their own game they can win on their own.

Originally posted by jvm222
Instead of reading that long post how about just realize everyone is a slave to money and instead of 'in god we trust' the money should read 'this is your god'?

Simple solutions but everyone wants to continue playing their game instead of making their own game they can win on their own.

Because my post explains why you are a slave.

But don't you think we've reached the end of our rope as they say?
Where do we go from here?
Seven more years and we are 20 trillion in debt.
If rates rise to 5 % that's one trillion a year in interest alone.
How can we pay that?
Medicare, medicaid , social security for baby boomers.
I think it's time to leave this country now before the jig is up for us all.

Originally posted by MagnumOverDrive
But don't you think we've reached the end of our rope as they say?
Where do we go from here?
Seven more years and we are 20 trillion in debt.
If rates rise to 5 % that's one trillion a year in interest alone.
How can we pay that?
Medicare, medicaid , social security for baby boomers.
I think it's time to leave this country now before the jig is up for us all.

Think of a snowball going down the hill. When the end of the system is here the printing presses will need to run 24/7 on hyper speed. Id say the end is close if not already here.

Foreign countries are keeping the presses running but why do you think they continue to buy our debt?
Common sense says they should stop for a while to get rates up.
If they think we are in such bad shape Why support us at all?


[edit on 9/15/2009 by MagnumOverDrive]

Originally posted by MagnumOverDrive
Foreign countries are keeping the presses running but why do you think they continue to buy our debt?
Common sense says they should stop for a while to get rates up.
If they think we are in such bad shape Why support us at all?


[edit on 9/15/2009 by MagnumOverDrive]

My personal belief is the Central Banks around the world have a scheme going behind the scenes. America is to be the financial super center in an international superstate.

Wow I figured Id have some more debate on this at this point. Well here is a response from another site that I guess I should of added in.

to your otherwise EXCELLENT write-up?

From your essay:

"So I tell the US government give me a piece of paper promising me to pay back the money I lend you with interest lets say 5%. So the government issues a bond and gives it to the FED."

All of those "pieces of paper" represent bits of the aggregate wealth of our nation. Treasury bonds (representing real, tangible, physical property) are used as collateral against these un-payable debts. Let the government default on a bond and you've just handed a piece of OUR America over to an international banker. If through wreckless spending, the government defaults on enough of 'em, they OWN YOUR COUNTRY. It was very disheartening when I finally "snapped" to the realization that my property, infact has two mortgages- the one I took out to "buy" it, the other in the form of obligations made by Washington. Government signed the nation over to Snidely Whiplash and now we're the ones tied to the tracks.

Jefferson had it right- government should have never been allowed to borrow or be a party-to counterfeiting our currency. Short of a wholesale international default (leading inevitably to more war), I don't see a way out of this mess. It's controlled financial demolition.

He is 100% right and I should of pointed that out.

So I guess it comes down to how much they value this country in dollars.
Any idea what the collateral value of America is?
I could not even guess.

Originally posted by MagnumOverDrive
So I guess it comes down to how much they value this country in dollars.
Any idea what the collateral value of America is?
I could not even guess.

Good question.

The collateral value remains quit high. While America has exhausted its mineral reserves (as evidenced by the mountain removal projects in the Appalachians) it retains the worlds largest untapped reserves of Hydrocarbons.

I discussed this with a friend the other day, and she came up with a briliant conclusion.. The idea that it is impossible to pay the debt only makes sense on a closed world.. But we are not on a closed world.. You import and export stuff, money comes in and out of countries.. That way the debt can be payed, with money that is not originally generated by the FED..

But, we agree that this model only would work if the balance between exports and imports would be always checked in place.. And the truth is that America nowdays imports more stuff that it exports..

So, yeah America is doomed.. But essentially the model could work, IF the money on the different countries come from differente sources, and import/export balance is kept in check..

your right...but if you go back into the history of the boom and bust days of the 1800's on this matter, there have already been many ways of trying to set up a national currency,and that was completely control by the federal government. it resulted in extreme inflation and extreme deflation, and many ordinary americans lost everything. many smart men in our government at that time, tried to develop a stable monetary system and failed. i won't go into all the financial mistakes, but if you take some time, it's all out there in mind numbing detail.

Someone from another site showed me this vid... Wow!!!

video.google.com...#

It's an old video but the point is well made. It surprises me to hear this kind of talk coming from a preacher. I wish more people would listen to him and follow his advice. I think it falls on deaf ears . The moral majority has lost all credibility with me as I have become disenchanted with their fiscal policies and I've always believed that your religious beliefs should be kept personal and not politisized

It is all beautifully described here:

I want the Earth plus 5% (Allegory)

With video and everything. It's about time more people realize this so we can finally kiss this monstrum of a system goodbye.

Our money has value.........................people that say this aren't thinking. It may not be a tangible value like "gold" but it's a value.

Value of our money = lots and lots of bombs and a 600 billion dollars worth of military equipment and the kicker? NUCLEAR WEAPONS! It doesn't matter if gold is backing our money supply........we'll just go to war!