Why the National Debt Canât Be Paid Off
- Thread starter bearice
- Start date
In a debt based monetary system, sovereign debt is not supposed to be paid off "in full."
Debt = money. Paying off debts destroys money.
Think of double entry book-keeping. On one side is the government debt. That is a liability. On the other side is Private sector money. That is an asset.
Government debt is money in the private sector - to the penny.
The US government has a free-floating fiat currency which can be expanded at will. Taxes are collected to control aggregate demand, not necessarily for spending. That's why the IRS and Federal Income tax were created the same year as the Fed.
The US Government is not operationally constrained in spending money - because thru the Fed and Treasury - it creates as much money as it wants and needs.
Hope this helps...
(And by the way, the system will crash, but not the way most people here assume)
Debt = money. Paying off debts destroys money.
Think of double entry book-keeping. On one side is the government debt. That is a liability. On the other side is Private sector money. That is an asset.
Government debt is money in the private sector - to the penny.
The US government has a free-floating fiat currency which can be expanded at will. Taxes are collected to control aggregate demand, not necessarily for spending. That's why the IRS and Federal Income tax were created the same year as the Fed.
The US Government is not operationally constrained in spending money - because thru the Fed and Treasury - it creates as much money as it wants and needs.
Hope this helps...
(And by the way, the system will crash, but not the way most people here assume)
well said, but there is a flaw. if government was not borrowing, the private money could not lend to government, and so, they will lend to other private entrepreneurs, etc, which would have been better than lending it to the government, since private enterprises are more efficient. If no one was borrowing, then the cost of capital would come down.
Thx for the posts dude, my whole plan on the other thread was simply to dispel the common myths about the central banking systems.....I have come to realise this is not a possibility..... The percent of the population who go full retard is simply far to great.......Bearice is a shining example of liberal intelligence.......WTF am i sposed to do with that?!?!?
I don't know, man... There's a lot of people here that love to regurgitate the stuff that the tinfoil hat brigade produces.
Hello, Hello. I bothers me when you guys confuse these crackpots like Bearice with "liberal" political thinking. Some of you guys need to look up the definition of "liberal" in the political sense. Perhaps these folks, with let's politely say somewhat off-the-wall ideas, are better described as "radicals". It has gotten so the neo-con crowd has starting labeling everythuing they don't like as liberal. I very often see the word liberal used, when what is really meant is "socialist" or left-wing. The libertarians have used the word more correctly than most. One can have a liberal bent and be a socialist or not. One can be a fiscal conservative and be a liberal. But this constant misuse of the word liberal, is ruining the usefulness of the word. There are plenty of other words that could often be better substituted. For example, right-wing, left-wing, socialist, social conservative, radical, crackpot, lunatic, moron, etc.
