DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY

A satirical short film taking a look at the national debt and how it applies to just one family. Make sure you watch it to the end.

The only little problem... our entire money system is based on federal debt, i.e. you could freeze federal debt at or below present levels for all time and you'd still have the problem of not being able to expand the money supply for the needs of an expanding economy into the future GIVEN THE PRESENT SYSTEM OF MONEY. That problem needs to be fixed at the same time you fix the debt limit problem.

http://www.webofdebt.com

” you’d still have the problem of not being able to expand the money supply for the needs of an expanding economy into the future GIVEN THE PRESENT SYSTEM OF MONEY.”

That’s not true. The fed expands the cash and credit supplies constantly, and it isn’t tied to the debt in any way. We have fiat currency, and that is a terrible thing.

The debt, however, causes more money to be made available and that is a very bad thing as it dilutes the cash that you have in your pocket.

The debt, however, causes more money to be made available and that is a very bad thing as it dilutes the cash that you have in your pocket.

The first part of your comment is basically what I claimed i.e. that debt is the only way we have at present to reflate the system i.e. to provide enough money for the system to work. THAT is what needs to change. The problem is that the government is borrowing money into existence when it could simply be printing it into existence. In other words, the government is PAYING banks to create money out of thin air when it could as easily create money out of thin air ITSELF, and eliminate the middle man and the interest (which nearly doubles the cost of government).

Whether creating money (by borrowing or printing either one) is a good or a bad thing depends on who is doing it and how they are doing it. When Ben Franklin did it, it worked fairly well. The only two meaningful things in any sort of a picture like that are productivity and some sort of an element of trust. Consider:

Two shipwreck survivors on an island, five dollar bills in their pockets left over from their former life, and five clams on the island, a dollar is clearly worth one clam.

The one guy takes a machete and hacks a coconut tree into a crude printing press, kills an octopus and uses the press and the octopus ink to print up five new dollar bills, and pays them to the other guy to dig up fifteen more clams.

Now there are ten dollars on the island and twenty clams, the guy doubled the value of money on the island just by printing it. Nothing at all was needed as a basis for money in that example, the only two meaningful things in the picture were productivity and an element of trust. Worse, the entire history of the United States in the 18'th and 19'th centuries proves that you can't do anything like that using a gold standard.

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