National Debt Problem Solved!

7 posts / 0 new
Last post
tictac1's picture
tictac1
Status: Silver Member (Offline)
Joined: Sep 25 2009
Posts: 175
National Debt Problem Solved!

Yes, that's right.  A man, more accurately a one-man think tank, has figured out how we can easily pay off our national debt.  Enjoy!

http://www.kjct8.com/news/30172361/detail.html

Are you as impressed as I am?!?

goes211's picture
goes211
Status: Diamond Member (Offline)
Joined: Aug 18 2008
Posts: 1114
One man think tank....

Another fine example of the American educational system.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1323
Wouldn't that be "one man not thinking tank"?

As the comments on the article point out, I'm not sure who is in worse shape, the "one man think tank" or the TV station!

No_Fiat's picture
No_Fiat
Status: Silver Member (Offline)
Joined: Oct 20 2011
Posts: 104
 His idea is the same as

 His idea is the same as what the FED told Roosevelt to do in 1933, and that is to confiscate the gold for useless fiat paper notes. His idea is just another gold grab from the people.

Thomas Hedin's picture
Thomas Hedin
Status: Platinum Member (Offline)
Joined: Jan 28 2009
Posts: 815
manetize the gold

Why not just monetize a gold coin, stamp it at 15 trillion, use it to pay the national debt?

Robbrian's picture
Robbrian
Status: Member (Offline)
Joined: May 21 2009
Posts: 22
monetize the gold

Here's the best solution I've seen yet, and it doesn't need Congressional approval.

http://my.firedoglake.com/beowulf/2011/01/03/coin-seigniorage-and-the-irrelevance-of-the-debt-limit/

"If you think about it, it does seem odd that the US Government is the monopoly supplier of US dollars and yet our politicians go through life thinking the government will run out of money unless it can borrow more. Of course that’s not true, the coins in your pocket are legal tender and yet were not issued against debt. They’re minted by the US Government, backed only by the gilt-edged credit of the American people, no one is paid interest on it and they don’t add a penny to the statutory debt. What’s more, the use of coins as legal tender is scalable, they could replace the use of Tsy debt sales. No, you wouldn’t have to carry more coins in your pocket. Nothing would change except Tsy would be credited by the Federal Reserve for the sale of interest-free Treasury coins (presumably of large denominations) instead of interest-bearing Treasury bonds.

The two great powers of a sovereign state are the monopoly of violence and seigniorage, the profits from the creation of money. If the federal deficit (that is, expenditures in excess of tax receipts) were funded by seigniorage revenue, not only would there be no debt service owed on the money, there’d actually be no deficit. Seigniorage (whether generated by the Federal Reserve or by the US Mint) is supposed to be booked by Treasury as “miscellaneous receipts”, since the funds canb be appropriated for other govt uses, it actually reduces the deficit dollar for dollar. Looking into it, I found that while Federal Reserve profits are counted as a revenue source (larger than estate taxes and customs duties combined), US Mint profits are not. I sent a couple of emails to the Tsy Inspector General’s office to point this out, but have’t heard anything back. I’ve copied below what I sent Tsy (changing the formatting a bit to merge the two emails). I go WAY into the weeds legally (“presumably in USSGL account, Acct Title: Seigniorage; Acct No 5795″), so I apologize for that in advance. Feel free to ask me to translate anything below into the English language. The bottom line is, the Secretary of Treasury already has the authority to create money without debt so there’s no fiscal reason to raise the debt limit. What’s more, since the Federal Reserve began paying interest on reserves in 2008, there’s no longer a monetary reason to raise the debt limit either."

oppmsu's picture
oppmsu
Status: Member (Offline)
Joined: Aug 12 2011
Posts: 14
Robbrian wrote: Here's the
Robbrian wrote:

Here's the best solution I've seen yet, and it doesn't need Congressional approval.

http://my.firedoglake.com/beowulf/2011/01/03/coin-seigniorage-and-the-irrelevance-of-the-debt-limit/

"If you think about it, it does seem odd that the US Government is the monopoly supplier of US dollars and yet our politicians go through life thinking the government will run out of money unless it can borrow more. Of course that’s not true, the coins in your pocket are legal tender and yet were not issued against debt. They’re minted by the US Government, backed only by the gilt-edged credit of the American people, no one is paid interest on it and they don’t add a penny to the statutory debt. What’s more, the use of coins as legal tender is scalable, they could replace the use of Tsy debt sales. No, you wouldn’t have to carry more coins in your pocket. Nothing would change except Tsy would be credited by the Federal Reserve for the sale of interest-free Treasury coins (presumably of large denominations) instead of interest-bearing Treasury bonds.

The two great powers of a sovereign state are the monopoly of violence and seigniorage, the profits from the creation of money. If the federal deficit (that is, expenditures in excess of tax receipts) were funded by seigniorage revenue, not only would there be no debt service owed on the money, there’d actually be no deficit. Seigniorage (whether generated by the Federal Reserve or by the US Mint) is supposed to be booked by Treasury as “miscellaneous receipts”, since the funds canb be appropriated for other govt uses, it actually reduces the deficit dollar for dollar. Looking into it, I found that while Federal Reserve profits are counted as a revenue source (larger than estate taxes and customs duties combined), US Mint profits are not. I sent a couple of emails to the Tsy Inspector General’s office to point this out, but have’t heard anything back. I’ve copied below what I sent Tsy (changing the formatting a bit to merge the two emails). I go WAY into the weeds legally (“presumably in USSGL account, Acct Title: Seigniorage; Acct No 5795″), so I apologize for that in advance. Feel free to ask me to translate anything below into the English language. The bottom line is, the Secretary of Treasury already has the authority to create money without debt so there’s no fiscal reason to raise the debt limit. What’s more, since the Federal Reserve began paying interest on reserves in 2008, there’s no longer a monetary reason to raise the debt limit either."

Thanks for the link Robbrian. 

The other one that I ran across was this one, which says if Congress were to repeal the mandate that we had to back deficit spending with new debt issuance, then we could pay off the national debt over the course of 10-20 years saving somewhere around $11.8 trillion in interest costs over 15 years.  Also, takes the welfare money for the rich bankers away. 

http://my.firedoglake.com/letsgetitdone/2010/12/10/the-national-debt-is-congresss-fault/

My only question with this method is what happens as the debt gets paid off?  Does "true" inflation get exposed?  I would think that spending more than you take in it still requires "money" to be created, which is massively inflationary.  If that is the case, it might be the best method as the average US Citizen would feel the major pain and force Congress to reduce its spending.  The perfect check & balance IMO.

I'm definitely not an economist or financial guru, so feel free to let me know if my inflation conclusion is off base.  Just seems like their has to be a consequence, intended or unintended, to going this route.

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments