There are many ways to pay down the debt. Cutting spending, raising revenue via higher taxes, raising revenue via greater economic activity, or any combination of the three. You assumed ONE scenario. I didn't mention a scenario. What's that saying about when you assume it makes an ass of of you? IT DOES MAKE A BIG DIFFERENCE ON HOW IT'S DONE, despite what some schmuck who thinks he's a know-it-all because he once scored 96 on a test.
P.S. There is lots of legitimate debate over the effect on the dollar, if all of the federal debt went 'poof'. People MUCH SMARTER than you (those who scored 97 and above) debate many sides of the issue.
Let's see... I'll pick a few articles from the Ludwig von Mises Institute, (you know, those economic idiots who YOU are going to lecture with you superior knowledge)-
From an article written by Murray N. Rothbard (professor of economics at the University of Nevada, Las Vegas, and vice-president for academic affairs at the Ludwig von Mises Institute) back in 1992.
... Unfortunately, paying off a national debt that will soon reach $4 trillion would quickly bankrupt the entire country. Think about the consequences of imposing new taxes of $4 trillion in the United States next year! Another way, and almost as devastating, a way to pay off the public debt would be to print $4 trillion of new money—either in paper dollars or by creating new bank credit. This method would be extraordinarily inflationary, and prices would quickly skyrocket, ruining all groups whose earnings did not increase to the same extent, and destroying the value of the dollar. ...
And here's one discussing how federal debt actually comes into existance, (much deeper discusssion than your childish understanding) -
... The fallacious argument here runs like this: 'If the government wants to increase its borrowing, it must induce people to lend to it. This means it must offer higher interest rates. Then everyone else must offer a higher interest rate in order to remain competitive.' The mistaken notion underlying this argument is that if Dick wants Jane to lend him a dollar at the prevailing rate of 10 percent, and if she is reluctant to do so, then Dick must offer a higher interest rate to get Jane to change her mind.
"Not so. There is another way to change Jane's mind. Dick can offer to lend Jane a dollar at 10 percent interest, in exchange for her making an identical loan to him. Indeed, Dick can convince her to lend him any amount at all as long as he lends her the same amount, at the same interest rate without producing any upward pressure on that rate.
"This example is not as fanciful as it sounds. Whenever the government wants to borrow a dollar, it simultaneously lends a dollar, just as Dick does. After all, why does the government borrow? It does so to avoid raising your taxes for the time being in effect lending you back the taxes it would ordinarily assess.
"Unlike the borrowing of an individual, government borrowing is always accompanied by an implicit loan to the taxpayers. The government, like Dick, borrows from the public (or Jane), while simultaneously lending the same amount at the same rate. Like Dick and Jane, the government and the public can carry this on at any level without having any effect on the rate of interest."
Economists call this the "Ricardian Equivalence" argument. It asserts that taxpayers recognize that bond-financed deficit spending implies the present-value-equivalent of future taxes. With any increase in government borrowing, taxpayers will increase their savings just enough to negate any effect on interest rates. Taxpayers will purchase any additional amount of government bonds without reluctance at the existing yield, because they recognize that if government is selling more bonds, then the taxpayers need to acquire more bonds in order to afford their (or their heirs') higher future taxes. If the government sells $1 billion in perpetual bonds at 10 percent per annum, then it must increase taxes by $100 million per year. The anticipation of those taxes creates the demand for exactly $1 billion in government bonds paying 10 percent per annum. Landsburg and Feinstone assert the savings imperative forcefully: "Knowing that you are committed to making payments of [$100 million] a year forever, you will be forced to set aside a fund from which to make these payments."
Ricardian Equivalence (with intergenerational bequests that vary one-for-one with the size of the inherited government debt) provides a useful theoretical benchmark. It gives us a logically possible limiting case in which deficits would not affect interest rates. Those who argue that "the government must offer higher interest rates when it borrows more" would thus be uttering a fallacy (as Landsburg and Feinstone say) if by "must" they were to mean that no other result is logically possible. But if, as we believe is the case, they only mean, "must, given the world as it actually is," then the argument is not fallacious. The Landsburg Feinstone critique is misplaced.
Does Ricardian Equivalence actually hold in the world as it is? That's an empirical question, and there is an ongoing debate among economists over which side's evidence is weaker. Perfect Ricardian Equivalence seems unlikely on the face of it.
Oh my dear Saint Peter hanging on an upside-down cross.
I am apparently making my way across the Valley of the Shadow of the Stupid.
No, there are NOT "many ways to pay down the debt". There are precisely TWO ways to pay down the Debt (and if you knew ANYTHING about Macro-Economic Public Finance, you would know that):
Cutting spending, raising revenue via higher taxes, raising revenue via greater economic activity, or any combination of the three. You assumed ONE scenario. I didn't mention a scenario. What's that saying about when you assume it makes an ass of of you? IT DOES MAKE A BIG DIFFERENCE ON HOW IT'S DONE, despite what some schmuck who thinks he's a know-it-all because he once scored 96 on a test.
Nah. from a Bond Market perspective, it's all really ONE scenario: "Full-faith Redemption via accrual of Fiscal Surpluses" (you probably don't even realize that, but that's hardly surprising).
I just assumed the least economically-damaging methodology of getting there, because I (mistakenly) assumed at first that you might be able to follow along with my argumentation.
Sadly, I was wrong.
In this case, it's not about "some schmuck who thinks he's a know-it-all because he once scored 96 on a test". It's about whether or not you're even a smart enough Schmuck to QUALIFY for the Test.
And buddy, based on our conversations -- speaking as someone who used to PREP my company's trainees for the Options portion of the Series 7 GSE -- I'd bet Cash-Money before God and Man that you've never even passed a single Accredited-College freshman Economics course with even a "B" grade or better.
Because you don't know crap... and you're not even as Wise as "cva66snipe", who at least knows that "Ya can't Spend more than ya Get".
Please re-read my #77, if you're not too Proud. Maybe you'll learn something.
OP