Posted on 12/02/2014 9:51:47 AM PST by SeekAndFind
So here's a positively eye-watering number: America's national debt (not its deficit, which is something different entirely, so stop confusing them, please) is now a gobsmacking $18 trillion or $7 trillion higher than when President Barack Obama took office in 2008, The Washington Post reports.
According to the right-leaning Powerline blog, "41 percent of the national debt of the United States, from George Washington to the present, has accrued during the Obama administration."
(In case you were wondering, the 2014 budget deficit came in at a comparably smaller $483 billion, which "[represented] the smallest deficit as a percentage of GDP since the George W. Bush administration," Powerline also noted).
This begs the obvious question -- apart from, say, selling off Mount Rushmore and turning Wyoming into a giant theme park, how the heck do you pay down an $18 trillion note?
(Excerpt) Read more at pennlive.com ...
Well, the difficulty of looking at both sides of the coin is one side is much smaller than the other.
USA M0 money supply, to wit actual cash, is $4T. (Never mind how much of that is held offshore by foreign entities...) We can gather ALL physical US currency, hand that to bondholders, and we’d only pay off 22% of the debt.
Other forms of what is considered money (M1, M2, M3, etc) are, M0 component aside, just debt. $4T in hard currency, the rest (however you squint at it) is “debt currency” - ledger notations that, say, your bank owes you $1000 cash if you withdraw $1000 (funny, they don’t actually let you take that much at once...); you may _think_ you have what’s in your checking account (so does M1), but that doesn’t exist beyond current fractional-reserve arrangements and expectation of no run on banks.
To undo the national debt, we have to run M0’s $4T to bondholders, then work that thru their further debt arrangements so the gov’t re-acquires that cash and pays off the next $4T batch.
Most money is debt. National “credit” is simply the Federal Reserve writing “$1,000,000,000,000” in the “credit” ledger column, and “-$1,000,000,000,000” in the “debit” column (sum total of $0!), and initiates a series of loans based on that credit amount, on the theory that eventually it will be paid back (the chain of loans is “repaid”), and the total returns to $0. Most US money is debt currency: this virtual money exists only insofar as someone owes you, which when paid can in turn be handed back (eventually) to the gov’t as taxes and in turn pay back the Federal Reserve.
Yes, address the assorted annual deficits - that is needed to stop the hemorrhaging. That’s the “stop digging” advice implemented. Trade deficit is exporting currency; problem is any attempt to reverse that will suffer “bad money drives out good” with foreign entities retaining the hard currency while returning the debt currency, leaving us with less real money to work debt payback with and little cash to function on once the debt is paid off. Budget deficit is just the gov’t adding to or extending the chain of debt owed the Federal Reserve, making it even longer to unwind the debt problem; sooner we stop extending the chain of debts the sooner we can unwind it.
Ultimate problem is that the $4T of physical cash need represent the imputed $200T total value of the USA. Debt currency makes this disparity functional for now; to pay off the national debt would require severe deflation, multiplying the practical value of a dollar by 50x.
Agreed, sounds like a plan to me!
[Which guarantees that the exact opposite is what government and the united confederation of bureaucracy will do.]
That's way, way too little; you close all federal agencies except those explicitly commissioned by the constitution and those that carry out a Constitutional function (cutting them to just that Constitutional function), which would leave us with:
Overturn Obamacare.
That could have already been done.
Overhaul ALL gov’t aid programs to focus on the truly needy.
Nope, that's not Constitutionally authorized at the federal level; check your State's Constitution.
Cancel Corporate Tax and current income tax and institute a national sales tax, with a floor for the truly needy.
I don't want a national sales tax; such a monstrosity would further cement the idea that the interstate commerce clause covers intrastate commerce that has been built upon Wickard v. Filburn, to the point where even non-commerce is assumed to be governed by it. (See: GONZALES V. RAICH)
Quit farm subsidies and most foreign aid.
Well, the above would get rid of a lot of the agencies involved w/ farm subsidies, which should make getting rid of the subsidies easier.
Make Congress subject to the same laws as the rest of us and quit lifetime benefits.
Definitely; we don't need multiple classes — while we're at it we should abolish LEO assumed immunity.
The problem with returning to the gold standard is the limited amount of gold existing. Total value of all gold ever mined is about $8T. Total M0 hard US cash is about $4T. Set those facts against this: total value of the USA is about $200T, and the total value of a nation’s currency should equal the total value of the nation itself. We’d need to deflate the dollar by 50x to correct the imbalance vs national value, then impose further massive adjustments to switch to a viable gold standard.
Current total world economic value is about $600T. US total value is about 1/3rd that. Presuming all currencies go to a gold standard, we’d have to move 1/3rd of all gold ever to Ft. Knox et al, unwind (or repudiate) all debt back to the Federal Reserve (restoring their ledger to a simple “$0”, turn off the lights, and lock the doors), and deflate the dollar 50x (that’s times, not percent).
Will to do so? ain’t happenin’.
Start by charging the countries flooding us with illegals for services rendered.
Make that final deflation 33x, not 50x. We’d have to inflate hard currency to match our fair fraction of gold.
(Further math corrections welcome.)
Unfunded liabilities? that’s just promised amounts. Stroke of a pen, law of the land, problem solved - just like it was created.
It can/will never be paid off.
Silver lining is that every other country is in at least as bad a shape. So no one is likely to ask.
1. Drastically cut back or eliminate every Federal agency since 1945.
2. Drastically cut back every Federal program established since 1960.
3. When #2 provides a reason to the slackers for the riots that destroy entire neighborhoods and cities, let them happen.
4. When the riots are done, allow private enterprise to put people back to work rebuilding the damage from #3.
5. Drill baby DRILL... everywhere. Sell Oil worldwide. Become the 21st century Saudi Arabia. Jobs Jobs Jobs.
6. Keep Government interference out of the way or at least to bare minimum.
Offer up California and the Desert Southwest for sale. Give Mexico right of first refusal and when they can’t afford to buy it offer it to the highest bidder who can meet an $18 Trillion reserve.
Sit back and watch the La Raza/Atzlan folks freak out when they learn the ChiComs are going to take over. Hold out the prospect of doing the same with Oregon and Washington State to keep the PacNW Progressives in line.
;-)
How to pay off the debt? It is simple. Spend 10% less than you take in each year. Over time, as you pay down the debt, tax receipts grow with economic expansion, and the interest paid on the debt declines as a result of the debt reducing, the payoff rate will be faster. Once the debt is completely gone, purchase gold with the 10% in order to return the US to a sound currency.
How to spend less than tax receipts. Prioritize spending and don’t spend on the lower priority items. This is the job Congress has abdicated. In today’s world the only way to force Congress to do its job seems to be term limits which forcibly remove 25% of Congress and 30% of the Senate each election cycle. Knowing they cannot make careers out of elective office they won’t have to ingratiate themselves with big contributors and special interests. A Constitutional Amendment with the following requirements would also help:
1) The annual federal budget will ensure at the end of each year there is a budget surplus be insufficient for into session to develop and pass sufficient new appropriations for individual departments to in total achieve the mandated surplus. If Congress fails to revised authorized spending to meet this requirement within 30 days, the President is required to make cuts to spending at her/his discretion to achieve the requirement. Congress may override the President’s prioritization of spending by passing a revised budget meeting the total budget requirement.
2) The annual surplus will be allocated 100% to paying down the national debt. In the event the government has no debt, the surplus will be invested in gold bullion to back the legal tender of the United States. Should the government have no debt, all future obligations of the government are covered by a fully funded trust fund, and the currency is 100% backed by gold, the annual surplus will be returned to the people on a prorated basis based on prior year tax payments as a credit against taxes paid in the following year.
3) The federal government is permitted to run a spending deficit during times of a war formally declared by a vote of Congress per Article I, Section 8. During the period of declared war Congress may authorize an emergency budget for a budget year not to exceed a deficit of 20% of tax receipts. Congress may during a period of declared war authorize a budget deficit of 30% of tax receipts with the agreement of the legislatures of at least 60% of the states. All emergency budgets may not be renewed for more than 12 months without a vote of Congress and, if required, the state legislatures.
4) Under no circumstances is Congress permitted to pass an emergency budget for more than four consecutive years.
5) The baseline budget is defined as the prior year budget for each department and line item. Congress may not pass any law permitting automatic spending increases in a department or budget line item above the baseline.
6) Congress may not submit aggregated or omnibus spending bills to the President. The individual budgets of each department and agency of the government will be a separate bill approved by Congress and submitted to the President for signature or veto.
7) All spending by Congress must be incorporated into the budget. Congress nor any federal agency may obligate the US Treasury to guarantee payments or loans to any foreign nation, person or entity without a separate bill being passed by Congress and approved by the President for that specific purpose during the year in which the disbursement it made. No such payments, loans, guarantee or obligations to foreign entities may be made for more than one year into the future.
8) Spending for any program, activity, project, or transfer payment with a real or projected duration of more than three years must be reauthorized every three years by an appropriation of Congress without exception. Congress and the President may not approve any treaty with a foreign nation committing the United States to future payments outside the annual budget approval process.
9) The President is authorized to veto any line item of a budget passed by Congress as long as the total of the spending vetoed by the President does not exceed 20% of the affected department’s total budget. Congress may override any line item spending veto, within 30 days of the veto being cast, by a recorded vote of at least 60% of the members of both houses.
10) In the event the President and Congress fail to meet any of the requirements of this Amendment for a fiscal year, a national election will be held on the first Tuesday three months following the end of the fiscal year in which the requirements of this amendment are not achieved. All members of Congress and the President will be elected at this special election and no serving member of Congress or the President will be permitted to stand for election to any office at the special election. The new President and Congress will assume office 30 days after the special election.
I’d start by confiscating every single Democrat’s money in our so called government. After all it’s for the children. :)
Do as Germany bdid, just cancel it!
eliminate all unconstitutional government agencies, eliminate all welfare programs, and never borrow again.
If anything, the next couple generations will get royally screwed.
Excellent idea
The answer is too obvious to require repetition: roll back regulations that shackle business and cut back dramatically on social programs.
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