I understand this completely. But what i'm saying is it doesn't have to be this way. Of course it's not reality at the moment, because no one cares to follow the constitution and/or change things towards something that actually makes sense. It's absolutely ridiculous that congress needs to sell treasuries to raise money, when they can just create the money themselves. Congress just needs to change their policies & issue debt-free US dollars. It will put an end to this madness. It's really not that hard.
Debt Ceiling and Default
- Thread starter joneog
- Start date
I understand this completely. But what i'm saying is it doesn't have to be this way. Of course it's not reality at the moment, because no one cares to follow the constitution and/or change things towards something that actually makes sense. It's absolutely ridiculous that congress needs to sell treasuries to raise money, when they can just create the money themselves. Congress just needs to change their policies & issue debt-free US dollars. It will put an end to this madness. It's really not that hard.
Creating money IS creating debt.
They are no different.
It is impossible to issue "debt-free" currency, as there is no such thing.
It's not impossible. It's been done:
http://en.wikipedia.org/wiki/Moneta...n_of_debt-free_money_directly_from_government
"Some governments have experimented in the past with debt-free government-created money independent of a bank. The American Colonies used the "Colonial Scrip" system prior to the Revolution, much to the praise of Benjamin Franklin. He believed it was the efforts of English bankers to revoke this government-issued money that caused the Revolution.[31] Abraham Lincoln used interest-free money created by the government to help the Union win the American Civil War.[32] He called these 'Greenbacks' "the greatest blessing the people of this republic ever had."
You are (IMO) conflating too many concepts. Whether a currency is generated without a formal "interest" charge or not is irrelevant - the currency issued carries a debt obligation at least equal to its par value.
And that is also a completely separate issue from debt incurred by a gov't spending more than it takes in as revenue.
Lincoln hated Greenbacks. Greenbacks were, in fact, notes (ie, debt). He had them replaced by a national fiat currency. The Civil War left a massive debt legacy.
Gold is not money. Gold is a metal.
It sounds like we have some disagreements on what exactly is debt-free money. So I will word things differently:
Congress needs to issue US dollars without the simultaneous creation of any debt obligations (ie. treasuries) associated with that issuance. This way the government will not be forced to return the US dollars plus interest to the holders of treasuries, because no treasuries would exist in the first place.
I don't think I can make this any clearer and I won't explain this further.
This is pure printing money and financial suicide. Without debt, the money cannot disappear.
It can disappear via taxation and govt destroying the money coming in via taxes. It's far better than being at the mercy of China, big banks, and rating agencies- and facing a default, govt shut down, etc.
Besides, money can still be created via debt in the economy via the banking system. I'm just advocating that the govt not use debt for its funding.
Quote from dewton:
There is a solution to the problem. No I don't desire that the old folk die off due to lack of provision. The solution is really easy... the US govt does not need to go into debt at all to fund itself as it has power given by the constitution to create (and destroy) money. That's an end to being at the mercy of credit rating agencies, China, and big banks. If you're worried about inflation, the solution to that is simple... increase taxes and destroy the money that comes in via taxes. It's not a radical idea- it's in the constitution. However the elites via the media and vain republican vs. democrat debates on debt ceilings want you to believe it's a radical idea and once you believe that, they can maintain and increase their tight grip and control over everyone.
It's always different until the difference once day is so severe that it wipes the country out.
Meanwhile the United States needs to choose to be sovereign and not depend on other countries such as China for their toys. That means investing in manufacturing technology innovation & robots that create our clothing, ipods, wash our dishes, etc with little human labor. A future where robots serve us while we lay at the beach is what us science nerds dream about.
If you create money to freely spend, at the same time tax money and destroy this, this is exactly what we have now. How is this different from the current system? It's not.