Can we ever balance the budget or have a surplus going toward the national debt? Every time our Federal government has attempted to do this it has failed and has put the economy in a recession. by JJJ
Sunday, March 2, 2008
When I was a child, I always found it fascinating to watch the cartoon where the cartoon character would be riding a horse while holding a stick with a carrot on the end. The horse would see that carrot and instinctively move toward it. But every time the horse moved, so did the carrot! The most important thing to that horse was the carrot right in front of him, so much so that he didn't even notice the person riding on him.
I was amazed to find out that our country is very similar to that horse. Whether Democrat, Republican, or Independent, all instinctively would agree that we need to balance the budget and pay down the debt. However, every time our country has run a surplus and began to pay down the debt, a recession was sure to follow and we were unable to continue paying it down..
So where is the problem? Why can't we just pay down the federal debt and have no drastic consequences like when your family pays down your personal debts?
First, we will need to understand a little about how money comes into existence.
Every dollar note comes into existence through one of the twelve Federal Reserve Banks loaning out money at a particular rate. Only those notes can be used to pay off the debt with a particular Federal Reserve Bank. So essentially this "money" is created out of thin air, and then loaned out into society.
"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+...=$1,000)."
According to private sector calculations(since M3 is no longer released by the Federal Reserve) there is estimated to be 14.6 trillion dollars(electronic and dollar bills) in circulation today(a significant amount of that is being held by foreign countries so in reality, there is even less being circulated in the U.S. economy).
Every time the money supply increases, it pushes prices up. Let's say you grow corn. If you produce 100,000 bushels a year at $2.12 per bushel, you make $212,000 in gross sales in which you then deduct costs to determine your income. However, there is a limited amount of corn you produce. You cannot just decide one year that you will produce 200,000 bushels with the same amount of land and labor put into it. So each bushel has a real value as land is limited and your labor and time is limited. So if the government borrows one trillion dollars from the Federal Reserve and they then spend 100 billion on corn, there is now less corn that year and the usual purchasers, such as cereal factories, etc, now have to pay a higher amount to buy the same amount of corn as they would have before since the supply has been decreased. So the price rises and we see inflation. Then as the private banks expand that one trillion dollars to ten trillion dollars, the price of corn and other commodities will continue to rise(or one could say that the value of the dollar has declined).
So if the money supply is expanded through debt creation, which results in inflation, then when you try to pay off debt, the money supply will in return contract, which will result in deflation. So when any significant amount of debt is paid off that is more then being created at a given time, this will cause there to be up to ten times less the amount of money that is paid off. So if the United States Government paid down all of it's debt today, which is 9.3 trillion, this would cause the money supply to contract by upwards of 93 trillion dollars. That would mean a 64% decrease in the money supply. So the price of everything would then need to decrease to 1/3rd their current value(payroll included). During that adjusting period, very few things would be exchanged back and forth which would translate into many people losing their jobs and taking very large pay cuts and also not being able to purchase the basic amenities as they are priced 64% too high. People would feel like they just don't have enough money. Companies wouldn't have enough money to pay their employees and many jobs that are currently paid below 17$/hour would need to be adjusted below the minimum wage rate.
This would translate into a recession the equivalent of the Great Depression. Likewise any amount of paying down the federal debt will cause this deflation to occur proportional to the amount being paid off.
So what is the solution? Unfortunately there is no easy answer. One proposal has been that of allowing the private sector to produce competing currencies. This way if the U.S. dollar spins into an inflation free-fall, Americans have an alternative they can fall back on.
For instance, suppose I owned a business. There is a very attractive private currency called the "Liberty Dollar". This is a currency backed 100% by silver. So I could set my prices to also accept "Liberty Dollars". Then if the U.S. dollar inflates or deflates, depending on the Federal Reserve policies, my customers would still have a currency that they could pay with. I would still have a currency I could pay my workers with. I would still have a currency that I could purchase my products with. I could set my prices once and never need to worry about needing to raise them. As I find more efficient ways to produce and deliver my product over time, I would then be able to continually decrease my prices. Likewise, as my employees become more productive, I can measurably determine what increase in pay that they are worth. Productive exchanges would still thrive even though the U.S. Dollar is in no way included in these exchanges. Now if a whole community was completely on a silver or gold or commodity backed currency, then the Federal Reserve's decisions, whether ill or good, would have little bearing on that community.
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Theres a new book out called One Nation Under Debt that explains how and why the U.S. paid off its first national debt, the one it racked up in three wars of independence, buying Louisiana, and so forth. Finished paying it all off during Jackson's admin. Lots of new data but the book is also a great read.
Posted By: Jeremiah Johnson
Date: 2008-10-13 18:26:31
The only true way to eliminate the debt is to eliminate legal tender laws. Then people can transit their prices to commodities and the free market could determine what our money is. As long as we are exchanging federal reserve notes(fiat money), we will always have a national debt.
Don't see why the government couldn't do the same thing to corn with money that isn't borrowed, but is instead paid using tax revenue. And besides that if it's necessary to create inflation to have enough economic growth and paying off the debt reduces inflation too much couldn't we just change the reserve ratio? The reserve ratio also impacts inflation. If paying off the debt is causing too much inflation, just cancel it out by changing the reserve ratio.
Ultimately there is no good reason to have national debt. It wastes money due to interest payments. It would be better for the government to pay for things with its own money. Maybe we can't do that right away, but when we get another surplus we should immediately start paying off the debt, until its gone. Then, the government should start saving money, that is it should put some money away and not spend it that year just in case it needs more money in the future. That way if there's a recession the government can increase spending by reaching into its savings instead of by borrowing money.
Posted By: Jeremiah Johnson
Date: 2009-10-15 15:10:28
Thank you for your input. The whole point of this article was to show that with the current debt-based money system we have today, it is essentially impossible to pay off government debt. It is the entire system that needs to change altogether.
Suppose we lived on an island with 100 people and the only place you could get money was from you. But you had to borrow it from me to be able to go out and spend it on things people produced. Could you imagine that you would ever be out of debt at any point? When the total money in the system is always equal to the amount owed, there is no possible way of paying it back. These notes we use are "FEDERAL RESERVE NOTES". NOTE in law is an instrument of debt. As long as we are using NOTES as money, and our government is the source by which all NOTES are originally obtained from the central bank, do you imagine the government could ever pay back all of those and STILL use NOTES as money? In other words, when all the NOTES are paid back, there is NO MORE MONEY LEFT if that is what we are using as money.
So again, if we are using FEDERAL RESERVE NOTES as money, we cannot have a fiscally responsible government.
I am certainly supportive of a fiscally responsible government, but that requires changing everything about our system.
Look, I don't know if anyone is going to read this...but over on a diffrent website I put the article about HOW EXACTLY TO PAY OFF THE NATIONAL DEBT....WITH ONE COIN.
And the thing is...You don't need to Hyperinflate currecny, tax the citizenry or the domestic corporations to oblivion, lower standard of living, lie about cutting spending in the name of eliminating waste/fraud/abuse...
And you dont have to repeal the 16th ammendment, nor remove the federal reserve to do it...
In fact...It might be just as painless and as easy as 1,2,3
It's a step by step instructional, that I put up on at least TWO places...One is Newsvine, and the other is on the front page of channel comments on DefeatTheDebt.com's Youtube Channel page, (but you'll have to read each part, from bottom up...that's how YT puts the comments.)
Now...I already know your first inclination is to dismiss everything I say. It's BS, I guess you exclaim....And even if you do find yourself THERE, reading it...you'll cry "Balderdash! Can't happen! THEY won't let it...happen!"
Now, we've had for the last 97 years the FED, and the IRS. The Patriot community has decried these two entities as the evil agents of the NWO...in fact, a growing majority of folks, many you might find in the "Tea Parties", who, see the vast growing power that both the FED and the IRS, and government in general, have in our lives...and want to see them, and the Congress, as well as every politican...sent straight to h-e-double hockey sticks, never to suffer them again...
Well, let me give you the driving force behind my "One Coin" solution...I asked myself, You know...we have the FED and the IRS...and we have this National Debt, and "Toxic Assets", and a growing Tax burden...What happens if we had the RIGHT TOOLS to defeat this monster....but we have it hardwired in our heads to use these two tools (FED and IRS) THE COMPLETELY WRONG WAY, and every way we have thought of Debt Reduction, spending cuts, tax raises, money manipulation...has been based upon SEEING these TWO POWERFUL TOOLS for revenue generation, and debt reduction, THE WRONG WAY...and that's why we've been driving debt up to unimaginable levels...
So when I placed my solution online...It gets ignored.
And if pressed, all I would get as an excuse..."Look, buddy, why don't you just concentrate on your little warehouse job, and...just let the EXPERTS handle everything, OK? They know what they are doing, unlike you...who can't seem to do your little job right"
But...It figures...the people who I think are experts, are just as blind as the politicians, who are just as blind as economists, just as blind as the "Tea Party" Protestors, just as blind as the men who belive they run the whole world....all are just as blind, if not blinder than Stevie Wonder...and I'll bet if he was read to, this proposal, not only would HE get it....even Stevie Wonder could tell you about the Laws behind it, that would make it work, unlike our own lawmakers...who just couldn't, wouldn't, and would steadfastly REFUSE, at every chance possible, to get it.
These lawmakers and economists, would be like Charles Naughton, playing Caligula in the 1953 Richard Burton-Jean Simmons movie "The Robe", where, in the scene that Marsellus attempts to hand the robe to Caligula...Caligula recoils in horror, "Get it Away from me! It's bewitched! remove it!!!"
And the simple suggestion would be this: Instead of taxing everybody, to pay back the bonds, through the Central Bank the FED, the source of money...Tax the Fed, instead, and allow accounts to accumulate revenue from the unpaid taxes the Fed hasn't yet submitted.
If that last idea has you scratching your head, asking "How?", well, you can always go and look at my page: kaptblasto.newsvine.com, or you can go on the DefeatTheDebt.com's youtube channel page and see at the bottom of the channel page, my plan there as well.
It has been way too long to keep sufferinng like we are.
Posted By: Bob Snodgrass
Date: 2009-11-02 10:36:44
You should study history. The US national debt was completely paid off in 1835, during Andrew Jackson's second term as President. Jackson was a smart, interesting and evil man, the only President who had killed a man in a duel, something that he enjoyed discussing. In his "farewell address" which was written by his factotum Roger Taney (later author of the Dred Scott decision) and never given orally, Jackson was especially proud of his lifetime work of Indian removal, removal from lands that the Indians had held for centuries, for the benefit of white land speculators and sharecroppers. Long before the trail of tears, he had a record of killing Indians, getting them to sign treaties that were never honored, and repeatedly breaking his promises.
Jackson believed in hard money. He was pleased once the national debt was paid down and wanted to go further, to eliminate paper money. He couldn't do that, but he did sponsor a law requiring that all land purchases from the government had to be paid in gold or silver. This caused a run on the banks and was a major factor in the Panic of 1837- in fact that double dip depression from 1837-43 may have been the second worst depression in US history. The great depression of the 30s was more severe and lasted longer. Both were preceded by a big run up in commodity prices- the bubble commodity of the 1830s was cotton and the US had a role analogous to OPEC.
However, it’s too simple to blame the Panic of 1837 on Jackson and his elimination of the Bank of America. The panic was preceded by an orgy of speculation and run up of debts contracted by both states and individuals. British investors had sunk lots of money into the booming American economy in the 1830s; of course they often used borrowed money and when the Bank of England tightened credit, state bond prices sank like stones. Nine states went into default- they had borrowed heavily to finance canals, roads and other improvements expecting increasing revenue in perpetuity (sound familiar?). Florida and Mississippi permanently repudiated their debts, infuriating creditors in England and the Netherlands. Excessive private and state debt was a major cause of the panic of 1837, federal debt was not.
It's interesting, Mr. Snodgrass, that you pointed out that it was excessive STATE and PRIVATE debts that caused the 1837 panic.
And the reason why those debts were accumulated, due to specualtors defaulting, losing borrowed money, gambling on the market, and, due to states having to borrow heavily, to finance infrastructure, then repudiating it, figuring if they didn't, the tax burden they would have to impose would be too great to sustain a local economy, that could generate ANY tax revenue, in the first place, (you did mention florida and mississippi repudiating the british and dutch underwriters, correct?)
Ok...well, what my "One Coin Solution" is, basically takes the whole compund-intrest-payments/taxation-penalties-simple intrest concept, and turns it on itself like a moebius strip.
Instead of having Congress, thru Treasury, sell bonds, to fed, charge them a TAX BILL instead. Now, why do I say this?
Despite all contentions to the Contrary, CONGRESS was the final author of the Federal Reserve Act, which was Created to be an OTHER, set apart from Congress, allowing for conditions where this OTHER can decide against the Will of Congress.
Even though the FED is answerable to itself, (for the purposes of monetary integrity against Congressional wrongs), CONGRESS STILL holds FED *Accountable* for its actions, and ultimately CONGRESS holds ITSELF *responsible* for the FED's actions.
And Despite all the stupidity of Congress, as we know they commit...When Congress placed this entity on the PRIVATE-SIDE, what would have normally been a Government Agency, got DISGUISED as a PRIVATE FOR-PROFIT ENTITY in the form of a CENTRAL BANK! In otherwords, folks...HERE IS THE 'OTHER' that CONGRESS can TAX...instead of you and me, and the Corporations.
Today...The FED is Congress' BANKER/CREDITOR. Tomorrow...why not let CONGRESS be FED's banker/creditor, instead?
A loan agreement (promissory note) is like a TAX BILL acceptance/paymnet, BUT IN REVERSE. ( maybe it's easier to think of a TAX BILLING as a PROMISSORY NOTE...with an extra step added at the start, to REVERSE the whole process...Or, Like a reverse mortgage, but you keep your home in the end of the term, AND YOU KEEP the money handed out from the 'other party'...)
First, understand this: GOVERNMENT is NOT a 'household among households' as the BANK wants those inside Government to think of themselves. Households CANNOT, either, impose taxes on other households, nor, set regulation that other households must follow. Government CAN!
All this problem of DEBT, that we are forced to try hopelessly to pay through TAXES, stems almost directly from this WRONG-HEADED-NESS that was put into GOVERNMENT( actually, We, the People, through our reps) by Some of We, the People, working through BANKS!
Plus...if this can be approved STATES can use something similar on the INDIVIDUAL CENTRAL BANK BRANCHES,
And the taxation system we now suffer under, COULD be used as a form of a savings plan, or a report of the monetary amount of whatever we paid into THIS CURRENT system, AN \'asset\' that could be used as collateral for a loan.
If every american paid $1000 a year for 4 years we could pay down the national debt. As Americans we spend $1000 on gas, tv, cd's, movies, dinner, etc. Just like paying off our own debts why not be part of America and help our country out. Yes, some Americans do not have it to pay, well the million dollar baby actors, and pro sports players should help out, selfishness is going to ruin our country! We can all donate to help the problem,
Don't you see you have bought into interpreting "The Debt" as an entity unto itself? That is exactly how those who ran it up WANT to you think, they don't want you ponder on how it got that way, or who gained from it; believe it, the debt is partially reflected right now as large amounts of money in someone's pocket and bank account.
So, if everyone in the US 'donated' $1000 a year for four years to the National Debt, sure it would be paid off, but who effectively would you have just rewarded with free cash from your donation. It is as if a local business squandered it money, and perhaps some of was stolen, and now it has a debt. Well, if everyon in the community just donated $100 to that business it too would solvent, and you would have effectively rewarded both its inept handling of its finances and rewarded the thieves that stole from it, and then you would encourage all (including law enforcement) to just forget how it got that way, all it took was Other People's Money to erase the debt caused by those affirmatively responsible for the condition.
With both the hypothetical business and the US, these are not non-profit institutions that only do good for people, they are ruthless, irresponsible, and profligate entities - who you would have rewarded for their actions, at the sweat of your and everyone else's brow.
Gary, in response to your comments..."such is, the human condition".
Look, the monetary system that we now operate under can be boiled down into four short terse words..."Pay back, with interest."
Everybody, at some level, does this. Whether rich or poor. Whatever race, creed, color, sex, or persuasion...everybody tries to payback their creditor. That's what powers the Dollar.
Now...you believe that, according to the Government, or rather Former President Carter, that the Dollar is powered by the GNP...well, that's only part of it. The Dollar is actually powered by the GNP's ABILITY TO FACILITATE AND PROVIDE you THE CAPABLITY to pay back what you owe to your creditors, and you, in turn, meeting that obligation. Some say this system is a DEBT-BASED system...while that may be roughly correct, it might be more complete to say that this system is a DEBT-PAYBACK-based-monetary system.
Even if you, reading this now, are personally debt-free, and have paid back all your PRIVATE DEBTS you owed, you're still not completely DEBT-FREE, because as a part of GOVERNMENT, (which you are, naturally, because WE, THE PEOPLE are the BOSS) you are still owing. This goverment owes 12 Trillion and each bit of that 12 Trillion comes in the form of BONDS, that Government allows private sector, and foreign entities to hold.
And that's the problem. BONDS.
I'll have to get into this later, right now, I have to go to work. I'll have to come back later on tonight or tomorrow, to explain further. I hope you'll take time to read it, and I look forward to any of your comments too.
Hey I was thinking on the idea of eliminating our national debt, as well as the absurd profits raked in by large corporations. An idea kinda popped into my head along the way. What if as a monetary/taxation policy, the federal government capped (and collected the excess) after-tax corporate income of corporations in the highest echelons of our taxation scale to say, the total number of shares outstanding (preferred & common). This would effectively stop large corporations from siphoning money out of the economy.
The reason I chosen total shares outstanding as measurement for the cap is simple: it guarantees that these excessively large corporations can still reinvest this money into the corporation, or pay dividends to shareholders, and to issue more shares requires a vote from the board of directors.
Initially, the money would be an impressive sum because corporations would not be able to adapt their business models quick enough, and could have the potential to pay off a large chunk of our national debt. The idea of "maximizing shareholder value" could only hold until the company has reached that (very high) level of after-tax profit.
In the time period after the cap has taken effect, corporations would begin to find ways to reduce their after tax profits as close to the limit as possible. This could result in higher wages for employees, which result in higher tax revenue from regular citizens. Another possible benefit from a cap could also inspire corporations to lower the prices of their products, saving the consumer money in that savings pay off consumer debt/buy more stuff. Corporations could also invest more money into R&D, giving our future a bright glow with the advent of new technologies.
A cap on after-tax profits would obviously have negative impacts on our economy as well. Corporations may try to hide profits abroad, but tighter corporate regulation can prevent this (in my opinion). The idea that a company would just "shut-down" after they reach the cap has been presented elsewhere, but a law can be written to prevent it. There may be situations where these large corporations would get capped, and then the next year they may lose money. In our current accounting system, there is already a provision for this called a Net Operating Loss (NOL) carry forward/back provision. These provisions allow corporations that suffer losses to use there loss reduce the future tax obligations or partially refund taxes previously paid. An additional provision to ensure that money taken as a result of the cap can be (partially) refunded to help reduce operating losses.
I guess from my idea you can probably tell I have the opinion that large corporations take away from the freedoms American citizens are entitled to. A life of debt is not what our forefathers had in mind when they founded our nation, and the fact that corps have a larger influence in Washington than a single US citizen scares me because our congressmen are supposed to represent the people, not the corporations.
Anywho, I just wanted to put this idea down on "paper" (well this is close enough). Keep in mind corporations who would be paying into this debt solution are in the highest tax brackets and are clearly making money. Please let me know what you think and maybe more possible negative (or positive) outcomes of this scenario.
I am delighted to discover another "Bill Greene" with conservative economic and political leanings. There can never be too many of us!
I don't wholly understand that multiplier effect on banking and federal reserve theories. Professor Charlie Williams at HBS tried to teach me how it worked, but it was just too abstract and hypothetical for me to follow-- especially in this post when working backwards as in debt repayment situations. However, one thing I think we could do about this skyrocketing national debt is to stop adding to it.
Perhaps if we could just balance the budget from now on, the existing debt would become a smaller and smaller percentage of our total economic picture. Because the debt will eventually come home to roost, it is essential to stop increasing it. Once that is established, we could worry about reducing it.
BTW-- I think in ordinary simple ways, the kinds of common sense ways that have always made the average person so much wiser than the abstract-thinking inmtellectuals who have casued so much trouble for us all. My ideas on this subject appear at www.thecommongenius.com
Here is what I don't get. Literally all of the wealth in the US is owned by about ten percent of the perple. This means that literally all of the debt is owned by the wealthy ten percenters. I am not in that ten percent. Why should I care how much the national debt is? It will never be my problem.
If you payed off the national debt there would be no money in circulation.. It was 'designed' that way so that the national debt couldn't be payed off.
Think about it from the Federal Reserve point of view:
They print money for the cost of paper and ink, then trade the newly created FRN'S (federal reserve notes) including INTEREST to the government, who trades for equally impressive pieces of paper (bonds) with which the government uses to do what? To deposit into banks so that WE can borrow it.. not to mention that entire amount that was borrowed from the FED 'with interest added' is a bill the goverment foots to the American people! So we are getting taxed to pay off fiat money that is backed by NOTHING and created from NOTHING just so we can borrow it yet again with what? you guessed it! MORE INTEREST!
The Prices don't go up, the value of your money goes down!
You are probably thinking "well where does the money come from the pay the interest?" answer: FROM THE FEDERAL RESERVE! So basically the FED has to create even more money just so there is something to pay off the interest with. So you see, it was designed as a perpetual debt machine, and each note represents debt, So, as I stated above, if you pay off the debt you'll have to use every dollar in circulation (including electronic I presume) and if you did that there wouldn't be ANYTHING to purchase goods and services with..
That is why no matter why scheme you come up with to fix what was BUILT to be broken, won't see the light of day. This is why we were on a gold standard where one can deal with 'weights and measures' and not have to worry about being at the mercy of a private company.
END THE FED, go back to a standard of weights and measures and the problem will solve itself.
Here is what I don't get. Literally all of the wealth in the US is owned by about ten percent of the people. This means that literally all of the debt is owned by the wealthy ten percenters. I am not in that ten percent. Why should I care how much the national debt is? It will never be my problem.
I think they own real wealth like land(real estate), businesses (stock) and commodities (gold). Money is not real wealth if it is not backed by anything real(unless you need to start a fire). Actually, it is backed by faith in the American economy but that can be manipulated by powerful interests, as many of us know.
I think the false assumption here is: "So if the money supply is expanded through debt creation, which results in inflation, then when you try to pay off debt, the money supply will in return contract, which will result in deflation." The money supply and the national debt are not exactly the same thing. The national debt isn't just the money that the US "owes" to the Fed in return for putting such money into the banking system. There's no reason why retiring US bonds would result in a shrinking of the money supply. It would move cash from the accounts of taxpayers into the accounts of bondholders and continue to flow through the economy.
Fiat Monetary Inflation is one of the most effective tools used to repudiate debt. The U.S. government has been effectively repudiating its debt for decades through monetary inflation.
One of the first great repudiations was under the Administration of FDR, the next repudiation was under Nixon when he effectively repudiated all foreign debt by cutting the tie between the U.S. "dollar" and gold. This action completely changed the way debt is viewed and handled, other countries of the world had no choice but to follow suit and accept completely worthless fiat notes instead of gold as the repayment of debts.
One of Reagan's economic advisors rightly stated that:
"We can pay anyone by running a printing press" Thomas Gale Moore.
That statement is closer to the truth than we realize because the greater the rate of monetary inflation the less value the remaining debt retains. Thus, debt that was assumed at a higher value in the past is repaid at a much depreciated value in the future. While the face value may appear the same, the underlying purchase value of the currency is drastically reduced and for every 4% of monetary inflation there is an effective repudiation of around a half-trillion in debt. If government figures are correct, which I doubt, then this government has effectively reduced its debt load by trillions of dollars through this policy of massive monetary inflation.
I expect that the true figures of this governments latest venture into monetary inflation is much, much larger than we are aware of, the effects of which will eventually be seen on various fronts. At the moment, this government has been successful in exporting inflation while importing deflation, but I am not sure just how much longer that ruse will remain effective as more and more foreign governments decide it is a game they are no longer willing to play.
Do We Have an Orderly and Safe Way to Rewrite the United States Constitution in order to Fundamentally Change the Government?
by Roger Copple
July 12, 2010
Thomas Jefferson stated in the Declaration of Independence, “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government …to effect their Safety and Happiness.”
If you look at the Constitution of the United States, there is only one paragraph (Article V) that tells how we can change our government.But Article V only discusses how to propose and then ratify amendments.It does not say anything about the procedures to rewrite the entire Constitution.At their website, an organization called Friends of the Article V Conventionhas verified that there have been over 700 petitions for a constitutional convention from state legislatures, but Congress refuses to grant that right, which is an inherent right of “The People.” 
The Friends of the Article V Convention insist that the constitutional convention that is now demanded by the states, based on Article V, canbe only for proposing amendments, not about rewriting the US Constitution.They want a constitutional convention to discuss any amendment issues (like requiring a balanced budget, term limits, and so forth) as they are submitted by the states--amendments which later must be ratified by ¾ of the states.Read the quote below from their website:
“Constitutional scholars agree that an Article V Convention is limited strictly and exclusively to proposing amendments to the Constitution, which must then be ratified by three-fourths of the states before taking effect.The Convention itself possesses no legislative or taxing authority: it can only debate, formulate, and propose amendments.”
Chief Justice Warren Burger  is a constitutional scholar who does not agree with the constitutional scholars above:
“…The convention could make its own rules and set its own agenda.Congress might try to limit the convention to one amendment or to one issue, but there is no way to assure that the convention would obey.After a convention is convened, it will be too late to stop the convention if we don’t like its agenda.The meeting in 1787 ignored the limit placed by the confederation Congress ‘for the sole and express purpose’.”
Organizations like the John Birch Society , the American Policy Center , and no doubt millions of other individuals, on the right, left, and in the middle are very fearful of a constitutional convention which has never been tried since the first one in 1787.Conservatives are sounding the alarm that a constitutional convention would take away the Bill of Rights (especially their gun rights), encourage abortions and euthanasia.Radicals on the left are also apprehensive about what conservatives might do at a constitutional convention.And apparently, for different reasons, the US Congress also dreads a constitutional convention, and refuses to turn over any power to the various states to either amend or abolish the constitution.Here is what the Constitution itself states:
The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.
To put those tortuous words in layman’s language, Article V prohibited an amendment banning the slave trade before 1808, which is also discussed in the first and fourth Clauses of Section 9 of Article 1. Small states would be allowed to have two US Senators, or the same number as any other state.Most important of all, there would be two methods to propose new amendments, and two ways to ratify amendments, according to Article V.
Nothing is mentioned in Article V about completely rewriting the Constitution, and even if it is implied, there is too much fear and paranoia everywhere to allow The People to take matters in their own hands, since the US Congress and other branches of the federal government are not doing their jobs, based on the powers that We the People granted them.
According to Article V, if 2/3 of the state legislatures call for a [national]Convention just to propose amendments, it is not clearly stated who will decide who attends this Convention to propose amendments.And then to ratify the proposed amendments, it does state that Congress may propose either that 50 state conventions should ratify or that 50 state legislatures should ratify.
Much of the wording in the Constitution is outdated, complex, and obfuscated.It may be the supreme law of the land, but it is very boring.At the very least, we could simplify, clarify, and update the Constitution and make it readable, while removing some of the embarrassing references to slavery, among other things.If we did just that, average citizens would read it and become empowered by it.
Many conservatives are concerned that a liberal US Congress would unduly influence the Constitutional Convention if Congress selected the delegates that attended the national proposing Convention and the state ratifying conventions.They also are worried that a runaway Convention would change the ratification requirements.And they argue that the liberal media would bias people in the wrong way, if there was a constitutional convention.Some individuals argue that there would be rioting in the streets and possibly another civil war, if we had the second constitutional convention.Others say they fear a constitutional convention merely because they do not trust the current political climate in Washington DC.These fears, whether they are justified or unfounded, need to be addressed.
The challenge for many of us, on the right and the left, is that we do want to rewrite the US Constitution so that we can have a better government.But we do not want to attempt it, unless it is done in a nonviolent, orderly, and constitutional way.
One of the ways we can allay the deep fears that many people have about a constitutional convention is to propose the Twenty-Eighth Amendment which could revise and clarify Article V.Since more than 2/3 of the states have called for a constitutional amendment, it is long overdue.If we get new, clearly stated, and proper guidelines for having a constitutional convention--citizens will approach this event with excitement and hope. The process may cause them to exercise their civic rights and responsibilities as never before, as this new monumental endeavor begins.
If the Constitutional Convention delegates created a document that was outlandishly foolish, The People, and the states, would simply scoff at it and reject it outright, and things would then continue as they were before. As bad as Congress is perceived to be, do you think it would have the temerity to say, “Okay, we will have a constitutional convention, but we ourselves will select all the delegates.” Here is an example of how the Twenty-Eighth Amendment could read:
Throughout our nation’s history over 700 applications have been filed by state legislatures to request a national Constitutional Convention, from all 50 states, though not always for the same reason and not always in the same time period.Though the US Congress has a duty to call for a Constitutional Convention when 2/3 of the states request it—the US Congress, the President, and the US Supreme Court will not have the right to influence or control this process in any way, when this method of changing the Constitution is chosen.
Each state legislature shall send one delegate to participate in the Constitutional Convention, based on the Instant Runoff Voting of the citizens in the state:Voters of each state will rank 7 candidates in the order of their preferences.The seven most numerous political parties of each state will offer the voters of each state a proposed constitution and a potential constitutional delegate, who might be the one selected by the state to represent it, at the Constitutional Convention.For example, here is how one voter from Indiana might rank her votes, based on the seven most numerous political parties in Indiana:
If no candidate in Indiana gets a 51% majority, then before the second round of voting begins, the candidate who had the least amount of votes in Indiana would be dropped from the list of choices (making the total now 6).If after the second round of voting, still no candidate has a 51% majority, then the candidate who had the least amount of votes would be dropped (making the list of choices now 5).If after the third round of voting, the Republican Party (which may have just proposed the Constitution we have now) received at least 51% of the votes, then its candidate would be the delegate representing Indiana at the national Constitutional Convention.
The 50 representatives from each state will choose where, when, and how they will have the Constitutional Convention within three months.After that, the Convention will have one year to work on several revisions, if necessary, of the newly proposed Constitution, in the constant effort to get ¾ of the state legislatures to ratify it.If a state ratifies a version and a new version is made, that state must vote again on the latest version.If the new constitution does not get ¾ of the states to ratify it, then the proposed constitution will be null and void, and the current Constitution will continue as before.All of the debates and dialogue of the delegates will be publicized, and citizens will be allowed to voice their opinions in the process.Thereafter, whenever 2/3 of the state legislatures again call for another Constitutional Convention for any reason, then this process must be started anew.
There is another way to make amendments to the United States Constitution: If 2/3 of the members of both Houses of the United States Congress approve of a proposed amendment, then that amendment will not be ratified and added to the Constitution, until ¾ of the state legislatures approve it.The state legislatures will have one year to decide over the amendment proposed by Congress.If a state endorses a proposed amendment, it is allowed to rescind its approval later. However, once an amendment is officially passed, a state cannot rescind its previous approval of that ratified amendment.[End of amendment proposal]
This proposed amendment to revise Article V, does not allow Congress to ever choose state conventions as a way to ratify amendments or a new constitution.Only state legislatures can ratify amendments or a new constitution.
Our current system is based on “the winner takes all,” which means if a candidate got a plurality with a mere 35% of the popular vote, for example, he or she could get elected.The Electoral College system for electing presidents is not very democratic. Though I admire libertarian Ron Paul, I regret that he still endorses the Electoral College system.
Some people say, “We just need to follow and obey the Constitution we have for a change.” Those people need to be asked, “Do you mean the Constitution including all the amendments?Do you believe that certain amendments were big mistakes?Do you believe some amendments were unconstitutionally ratified?” Upon closer examination, you will find that many of these people are quite dissatisfied with the Constitution in some or many respects.With a new constitutional convention, they would have an equal opportunity to fine tune the Constitution more to their liking. We the People are capable of having a constitutional convention.And we can do it in an orderly, safe, lawful, and fair way.
After the proposed Twenty-Eighth Amendment is ratified, political parties and concerned citizens could start publicizing their own proposed constitutions months in advance before the Constitutional Convention began. Delegates attending the Convention would be held accountable by their political party and the citizens from their home state. If done in this way, there would be no shocking surprises.
Moreover, if people see workable ways that our “sacred” Constitution and government can be improved, they will be more inclined to consider a constitutional convention.To show one way our current Constitution and government could be improved, I have written a new constitution, called the Third Constitution of the United States (the first constitution was the Articles of Confederation, the second is the one we now have). 
In the Introduction to my Third Constitution, I list 45 reasons why we need a new constitution.The average US citizen would agree with most of my recommendations once they were fully understood. Considering the corruption in government, the shortcomings of our current Constitution, and the differences in political preferences that have emerged since our Constitution was implemented in 1789--the only solution is to create a new document that creates a live-and-let-live society.
In my Third Constitution I advocate Instant Runoff Voting, which would give third parties equal access to the political process.I recommend having 435 federal legislators (as we now have in the House of Representatives), based on districts of equal population.However, the US Senate is totally eliminated, and all bills must be passed with a 2/3 majority, not a mere 51percent.The new government that would evolve from the Third Constitution would be devised in a way that would make a smooth transition from the old to the new. It would build government from the bottom-up, not from the top-down, which has never been tried before.
The Third Constitution would maximize local community self-determination, whenever possible.Each precinct community could choose free market capitalism or socialism, or some mixed economic system.In dealing with matters such as rivers, power lines, fire and police protection, for example, the preferences of precincts could be overruled by township boards, the preferences of townships could be overruled by county boards, the preferences of counties could be overruled by state government boards.Each state would be largely autonomous.The greatly downsized federal government would have narrowly defined powers such as national defense, interstate trade, and so forth.
Each neighborhood precinct would choose one representative to serve on the township board.The township board would have legislative powers and make judicial and executive appointments that pertain to that particular township.Each township board would vote (among themselves) and send one representative to the county board.The county board would have legislative powers and make judicial and executive appointments that pertain to that county.Each county board would vote (among themselves) and send one of its board members to the state government board.The state government board would have legislative powers and make judicial and executive appointments.
In years past, I typically voted a straight ticket for about 20 different offices about which I knew very little.The process usually took about four minutes.I do not think everyday citizens should vote for a county recorder, state auditor, and similar offices.Experts who work in these fields should appoint persons for these types of positions.
However, in annual elections, members of a precinct could replace their one representative to the township board, for example, based on that person’s voting record and performance.The township board, in annual elections, could choose to elect a different person to sit on the county board for the same reasons.The county board also could choose a different person to represent it, at the state level.
In Indiana, for example, (if you can cope momentarily with some of these details) the city of Indianapolis and Marion County pretty much have geographical boundaries that coincide.There are about 600 precincts in Marion County (each precinct has about 500 adult voters).There are 9 townships inside the county.That means 66-67 precinct representatives (600/9=66.6) could serve on each township board.Each of the 9 township boards would elect one representative to serve on the county board, which would thus have 9 members, at least in Marion County.There are 92 counties in Indiana, so therefore there would be 92 members on the State Government Board, which would replace the current Indiana House and Senate state legislators.Each state legislator currently represents about 600,000 or more adult voters, a number that is way too large.
Here is another aspect of this system, which I call the precinct empowerment system: Let us say Wayne Township has Precincts #533-600 in Marion County.If the Wayne Township Board elects Mrs. Smith (from Precinct#539 in Wayne Township) to serve on the Marion County Government Board, replacing Mr. Jones (from Precinct#581, also in Wayne Township), then Precinct#581 in Wayne Township has no one in government representing it, since Mr. Jones was removed.So the voters of Precinct#581 would vote for a person to serve on the Wayne Township Board to fill the vacancy there that occurred whenMrs. Smith advanced to the Marion County Board, replacing Mr. Jones.
Now, even if Mrs. Smith got promoted to the State Government Board, either the members of the Marion County Board, where she came from, or the people in Precinct#539, where Mrs. Smith came from originally--could vote her out of governmentcompletely, if they were not happy with her performance at the State Government Board.If that happened, then the voters in Precinct#539, where Mrs. Smith came from, would need to vote for someone to serve on the Wayne Township Government Board.
Indiana now has 10 federal legislators who serve in the US House of Representatives and 2 US Senators (like every other state).Since the US Senate is eliminated under the Third Constitution, Indiana would have 10 federal legislators to serve in the new, unicameral US Congress.So, an adult citizen from Indiana would vote for one person, from his or her precinct, to serve in state government.That Indiana adult citizen would also vote for a president of the United States and one federal legislator to serve in the US Congress. That would be three elected officials to closely keep track of, not twenty-three.
Remember these are just my suggestions.A lot of the details in my essays and the Third Constitution are being revised constantly, as I get feedback from people.Many individuals do not want to read a long essay, especially about getting rid of our “sacred” Constitution.When I share my political beliefs with family and friends, they say things like “That’s too disturbing to think about.If it’s true, I don’t even want to hear it.After all, what can I do about it?You can’t change the system.It’s too powerful.”
A new US Constitution could motivate people to make civics vitally part of their everyday reflections.Many people feel apathetic and powerless about participating in government.But it does not have to be that way.
If we sit back and do nothing, the powerful corporations and global elitists, bent on establishing a new world order, will remake our society for us, and they will not be hampered by our current Constitution and government.We can remake our Constitution in a way that truly empowers common people for the first time, and we can drastically reduce corruption in government.But we better act now before it is too late.
Roger Copple retired this year (May 2010) from teaching third grade in a public school in Indianapolis.He turned 60 on June 3.Roger became a libertarian supporting Ron Paul after previously identifying with the Green movement.Now he is trying to reconcile libertarian, socialist, and anarchist political theories.He has a Master’s degree in Special Education, and a Bachelor’s in Elementary Education. He can be reached at firstname.lastname@example.org.
 The “Third Constitution of the United States” and the latest version of my essay “Defeating the New World Order and Creating a New Society That Allows Capitalists and Communists to Live Together in Peace After Establishing a New Constitution” which was posted at www.disinfo.com on July 4, 2010, and some of my other writings, can be found at my website www.NowSaveTheWorld.com .
Why not create government bonds used to pay off the debt, using a government program over several decades, then cash them in when they reach the maturity of the amount of the debt. If the debt is causing inflation, deflation would be really hard to adapt to because people will not accept less money. What if instead we introduce a new currency, and pay off the debt at the same time. The value of the new currency would be through the roof, then we can start the system back over debt free, and create a clause that the national debt can only be increased during war, and we have so long to pay it off.
I began to plan a community of people that would remove itself from reliance on US fiat currency. ( funny money) way back in 1990. As a result all my friends and business associates attacked me and called me a lunatic. They also robed me blind, and did their level best to destroy me. Well, I'm still here and most of them are not. Divine justice I'd say. One day soon, this will come to pass.
Posted By: Richard Posner
Date: 2010-09-14 15:42:34
All interest is usury.
Any system based on usury is criminal
The present global economy is based on usury.
Capitalism is based on usury.
What part of this don't you understand?
“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”
"Once a nation parts with the control of its currency and credit, it matters not who makes the nations laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile."
William Lyon Mackenzie King
"So both Aristotle and Plato noted the paramount principle - that the nature of money is a fiat of the law, an invention or creation of mankind. This principle, part of a lost science of money, must now be relearned in the 3rd Millennium in order to achieve the monetary reforms needed to move back from the brink of nuclear disaster, to move away from a future dominated by fraud and ugliness, toward a world of justice and beauty."
Stephen Zarlenga, "The Lost Science of Money"
The average American believes in capitalism in hopes of being invited to the party. Their only part in the celebration will be to prepare and serve the refreshments, check the coats, park the cars and clean up the mess after the party is over, for minimum wage.
correct me if i am wrong...f we had 281 million ounces of gold in the Federal reserve in 1971 and gold is at 1500 an ounce ..isnt that 421 trillion$?...then if we create new money and back that money with gold and buy back all the dollars at there current value would we be debt free?..the new money has gold value ,,the old has No value..so one new dollar is worth how many of the old?...this is how we wipe the books clean isn't it?..
Why pay off the debt ? The debt exists because it is necessary. A modern economy cannot prosper without one. As the debt grows the economy will grow with it with little inflation just as has been happening for thirty years. It never has to be paid off and it cannot cause the country to go bankrupt. Balancing the budget ruins an economy by contracting the money supply and a national debt expands the economy by adding money to it.
Hey I was thinking on the idea of eliminating our national debt, as well as the absurd profits raked in by large corporations. An idea kinda popped into my head along the way. What if as a monetary/taxation policy, the federal government capped (and collected the excess) after-tax corporate income of corporations in the highest echelons of our taxation scale to say, the total number of shares outstanding (preferred & common). This would effectively stop large corporations from siphoning money out of the economy."
Capping after-tax profits of corporations will only serve to further curtail the U.S. economy. When faced with the prospects of an after-tax cap, U.S. based corporations would simply relocate to foreign states/countries/etc. whereby they wouldn't be subject to such penalties. As a result, the overall tax revenue collected by the U.S. Government would decrease significantly. Further, thousands (if not millions) of U.S. citizens would be left without jobs ... which again decreases tax revenue (for reasons mentioned on this site numerous times).
Essentially, your theory is very shot-sighted. In fairness, yes - countless U.S. based corporations earn ridiculous profits that are distributed to a select few. However, for every one of those kinds of corporations, there are 10 other corporations that redistribute the bulk of after-tax profits back into the company for purposes of R&D and technological improvements.
Simply put, penalizing corporations for earning substantial profits will not only lead many organizations to abandon the U.S. ... and thus, leave countless Americans without jobs. Moreover, it will inhibit marvelous technological breakthroughs that our on the horizon. Many of which take increasingly larger amounts of cash to develop. (again, please note that I share your disgust in the way numerous organizations distribute over-the-top profits ... but those companies are indeed few and far between).
One final note ... in response to Kristjan's comment above ... how can you say that there is nothing wrong with carrying an increasingly large national debt? The issues that are crippling the likes of Greece, Ireland, and the UK are not merely potential pitfalls of the U.S. economy sometime in the future. Rather, the potential for such a collapse in our own economy is a very real scenario right around the corner.
Sadly, it seems more and more Americans are concerned with matters related to Jersey Shore and American Idol than they are matters of potential monetary default. I wish more people read websites such as these.
In truth, I don't agree with several ideas posted on here. However, it's nice to see people (regardless of their viewpoints) actually exploring the issue!
I have to disagree with your idea that paying off our debt would shrink the money supply. Just think about where the money flows...
It would flow from the tax payer, to the government, to the Treasury bond holders. Unless the bond holders simply burn their money, it would enter the economy again when they spend it.
Many foreigners hold American debt. If we actually paid it off (which we are doing, but not as fast as we create more debt instruments) then they would have money to invest in American products. This would create American jobs (if we were willing to produce here again). And I promise you this will happen when energy prices go through the roof.
Money doesn't disappear my friend. It is simply redistributed. Wealth is only destroyed through consumption.
The original poster has not the faintest knowledge of economics. When both US citizens and foreigners are gladly willing to buy US debt at extremely low rates (as they are now), why wouldn't we maximize our utility through debt? Looking at succesful companies, only a small handful are debt free. How else does a nation grow? Its called an investment. As far as your inflation theories go, consider this. We currently have about 1.6% inflation, and would like to see an optimal inflation rate of 2%. Japan would give anything right now to have inflation, as deflation is just as bad. Your high school economic rationale cannot begin to explain the nuances of our economy. Having zero debt would result in a stagnant economy at best, and consumers would not be able to take shelter in treasury bonds.
"there is now less corn that year and the usual purchasers, such as cereal factories, etc, now have to pay a higher amount to buy the same amount of corn as they would have before since the supply has been decreased. So the price rises and we see inflation."
Hmmm... this seems incorrect to me. I could be wrong, but I think this better describes supply and demand, not inflation. Inflation would be a case where it took more money to buy the same amount of corn because of an increase in money supply.
Very naive and sophomoric understanding of how our capitalist economy really has worked. Greed, is a natural human trait that forces an every increasing spiral of wealth disparity. Wealth begets more wealth and, contrary to the canards heard daily, the wealthy and entrepreneurs are not "job creators". They are mearly vehicles to transmit the will of the real job creators, the consumer, to hire to satisfy their demand. No demand - no jobs. As wealth gets sucked out of the middle class so does the demand (i.e. the ability to pay) for products and the jobs to produce those products. A viscious cycle..
My last comment is referring to the original post. When debt takes the form of an investment in the future of the country( roads, infrastructure, environmment, education, healthcare) as opposed to blind speculation, it is healthy and met with huge future paybacks.
This is all ignoring the fact that if somehow we do pay off the debt (and FYI the proposed "tax the Fed" solution will only cause massive inflation), but if we did somehow or other pay off the debt, or even start to pay off the debt, the government sees it as a green light to spend more and... create more debt. If we "donate" to pay it off, that is just voluntary taxes. You can donate as much as you wish to the government: http://www.fms.treas.gov/faq/moretopics_gifts.html
Go right ahead, what do you think they are going to do with your money? Pay down the debt? Or spend it?
Looks like we have a lot of faith in the current Washington bureaucrats if we think any of these solutions will pay down the debt with our current rampant spending. Only when we get people into Washington who trust the constitution, the sovereignty of the states, and can live within (or below actually) their means, and not pander to special interests and all other unconstitutional welfares and wars can we really start to pay down the debt. Otherwise it is spend, spend, spend. And ask me how that impacted my debt levels in college...
The way to pay off the national debt is to tax "net worth." Americans own $55 trillion of net worth, of which $47 trillion is held by the top 20 percent. It is growing at 7.2%/year, or doubling every 10 years. In 50 years that $47 trillion will have grown to more than $1.5 quadrillion. Read all about it here: PayOffTheNationalDebt.org.
I have only spent a short time researching this topic and only one thing comes to mind.... the more we borrow. the more we need to make to pay it off. Currently the government is not doing things to raise more money, the argument is either to spend or cut to balance the budget,
If the standard is to drive up your personal debt to support the many many institutions that were created because of it, or to support jobs that HAD to be created because of debt creation, then I can only say that the idea of staying debit is not a sustainable attitude and eventually will tear down this country from the top down.
We are already seeing the affects of greed and political buy offs from the money that is at the top which only creates more and more decention among its citizens and trying to harness it or control is is not about power.
This country was built on the opportunity for prosperity and equality but it is obviously not happening and this country has a virus which has no cure except to wipe away all that has been done over the last 200 years of accumulating debt.
One example that can be used is a simple one. Most Americans one came of age and wanted a new car as a right of passage from child to adult but most americans never had enough money to buy a car outright, so according the their income and credit, which again is based on borrowing and paying back as well as assets..... we're most likely given a laon, whether a good one or bad one, statred their debt stream this way. Now.... since most people are fine with paying a little interest on getting something they either could not afford outright or flatout just wanted but did not have the entire amount are now paying a higher price the item in the end and most likely never pay it off regardless. Long story short, debit is a volital animal that will never die because the system is run by how much you owe. Only the elite are not bound by this aspect, but the resrt of us are slaves to to all the products we are told we want or flat out need and because of how much the country is dependent on debt, we will never get out from this as long as it is a standard way to live.
I personally do not like to have debt, I would prefer to own what I buy, pay it off as soon as I can and use the excess money for things that make working for a living worth it.
Currently, I earn a living that pays the banks, the insurance companies, the governemnt and with the increases in the cost of living, will never be able to get on top of it and appears to be something I have to accept or perish.
Yes, do I need all of these things? Of course if I do not have enough money to buy a house outright, or have a personal physician that I pay out of pocket or help to pay for government programs vital to our country such as infistructure, etc.... yes, it appears that I do need all of these things.
So, if needing all of these things are a must, it would make sense that increase to these costs only erase my net profit which eventually will bankrupt me unless I find a way to make more money.
My opinion about wiping out the national debt I believe is obvious.
For peace and prosperity, if the national debt was eliminated, we would become the loaner instead of the loanee.
We would be an example of how a country should work. Spending what we earn is not sustainable when a problem occurrs such as WAR, UNEMPLOYMENT OR HUMANITARIAN EFFORTS. Balancing ther budget does not account for the future....... we are putting our future in debt for citizens that are not even born yet, that is not the country we should be where our unborn children inherit the unnecessary debt of their grandparents or great grandparents or even their great, great, great, great grandparents.
Accepting this way of life is absord.
Being in debt is wrong- we all know it and the example the government should be putting out there is to save money for retirement, possible hardships or your childrens future- not setting the example that this is how it should be.
Being in debt limits abilities and forcing the status quo to continue, and personally, if you are like me in any way at all, I do not like to be forced to pay for something "just because" it what they say to do.
Yes, would it be hard, of course, would it happen over night, no.... does it need to happen... hell yes.
I cant contniue to offer up scenarios of common sense, but in the end, it makes no common sense to be in debt just to be in debt or to think you have to be in debt to pay for employees at the credit card companies, stock market employees, or even government employees.
Its time to clean house starting with what we need instead of what we want.
For those of you that talk about the historical ways the United States paid off debt, that was back in the days when money was based on gold and silver as mandated by the Constitution. With the creation of the Federal Reserve system in 1913, ownership of money was taken from the public and given to this quasi-government agency. Since Nixon removed all intrinsic value from US currency in 1971, we have what is known as "Fiat money." Fiat money is money that has value only because of government regulation or law. Since there is no longer any connection between anything of intrinsic value and our money, the Federal Reserve is free to print as much as they want. The consequences of printing more money is the dilution of the money that we have in our pockets and in our bank accounts. The public's money is eaten away by inflation. (Inflation is a kind of hidden tax that harms middle class and especially the poor and most needy Americans.) Prior to the creation of the Federal Reserve, there was virtually no inflation at all. This article is a very good summary of the problems we face today because of fiat money. The national debt is now approaching 15 trillion dollars and the federal government is borrowing about 46 cents of every dollar they spend. Estimates based on the CBO numbers indicate that the interest on our accumulated federal debt will equal all federal income by the end of this decade. 2020 is only 8 years away. At that point, there will be no federal money to pay for anything other than interest, not even the President's salary, or for Congress, or social security or our military. Also keep in mind that unfunded federal liabilities exceed one million dollars per tax payer. See US Debt Clock for conformation of these debt figures.
To Steve, and to all others who posted since I last posted:
You want something of IntrInsic value backing the money, and that's fine.
The problem becomes that no matter how much gold, or how much silver, or how much BLING you can grab to put into a storehouse to BE a Backing for any circulating currency, the VALUE of all that BLING, STILL...
is predicated upon how much someone is willing to trade for it, and FURTHER predicated on how much HANDLING/STORAGE is needed to possess that BLING.
and this all boils down to AGREEMENTS. THE HANDSHAKE. which IS the basis of ALL VALUE for ANYTHING ANYWHERE, with ANYONE! in other words...the basis of LAW....or FIAT (as you decry against.)
Let me tell give you an analogy on the power of the AGREEMENT, just to show you how utterly USELESS GOLD/SILVER truly could be.
Remember the TV Show "ALF," on NBC? Yeah, I know some of you are groaning right now, remembering (or at least trying not to...) but this was a sitcom about an ALIEN living with a Family....
On Alf's Planet, MELMAC, GOLD was so plentiful and so much of it was just littering the streets of his planet, that it made STYROFOAM valuable, in a Melmacian's eyes, like GOLD is to us.
When ALF came here, and saw all that STYROFOAM he almost had a heart attack of joy. He thought he died and went to Melmacian Heaven.
The power of the AGREEMENT and CONTRACTS, ***UTTERLY*** blows away any power of GOLD, Silver, or any precious metal that could be HANDLED, Possessed, and transported relatively EASILY....
Let's take a look at the 1793 Coinage Act, another AGREEMENT and CONTRACT that was standing as LAW...until it was realized that it wasn't working as good it was thought of being:
Even in the midst of the 273.25 Grains of Silver, or, the 1/15th that number, grains of Gold needed for Submitters of Specie to bring into the Mint for Congress to then authorize that Mint to mill Alloyed Coins for those Submitters to then take back from the Mint to THEN circulate in the economy....
It set up the precedent that Congress needed an OTHER to be there, interacting with Congress, so that ANY MONEY (or even, any ENFORCEMENT of, or OBEDIENCE to, LAW) not only HAD VALUE in that OTHER's EYES...But with that MONEY (having the VALUE that the OTHER believes is there) that OTHER CIRCULATES IT, rather than CONGRESS itself.
While Article 1, Section 8, Clause 5 DOES say Congress "shall have power" "...to COIN MONEY, regulate the value thereof, and of foreign coin,..." NOWHERE in that clause does it say that CONGRESS has power to SPEND (on what IT WANTS) any MONEY it presequently COINS, (or creates) into circulation.
["presequently"???? I think I just "coined" a word!, maybe not! Scrabble might not accept it! It's over seven letters, anyway!]
...Because the OTHER has to accpet that as having VALUE to THEM, to spend for ITSELF, on what IT WANTS.
and when you have ONE ENTITY being able to EMIT MONEY (or rather, just crank up the printing presses) to trade for what it wants, pretty soon that money circualting has NO VALUE In that OTHER's EYES...
This was also the problem with the "LEGAL TENDER" Laws of 1861-1863, as well as the United States Note issuances of the 1960's Even if X amount was to be printed, and "spent into circulation," and EVEN IF the OTHER (being the people) would accpet them as Tender to circulate among themselves, and EVEN IF the TAX to take them out again the OTHER could accept, as a way to regulate VALUE of ANY CIRCULATION thereof....Still could be considered "FIAT" (as those on here decry FIAT-ness, in the gleam of "intrinsic" VALUE.)
So...as it was with the COINAGE ACT, establishing AGAIN, that there NEEDS to be AN OTHER to take and circulate it...the same holds true with the CENTRAL BANK SYSTEMS, and today with the FEDERAL RESERVE SYSTEM.
The main problem that the Coinage act tried adressing was COUNTERFEITING: During the Revolutionary War, British Forces counterfeited the Contiental Scrip that the Colonists were using as MONEY...the counterfeiting operations were successful enough, that the people, after winning the war against the British, found they couldn't trust the Scrip anymore, as it was so plentiful and yet, much of it was COUNTERFEIT. So the call from the PEOPLE to the Government was: GIVE US HARD MONEY! We want GOLD and SILVER in our money...THAT CAN'T BE COUNTERFEITIED! (You do know about the phrase, "Not Worth a Continental." don't you?)
But when the Coinage Act went into effect, after a while, the question dawned upon the people,
"HEY! We know the Value of this hunk of GOLD, and that hunk of Silver...why don't we just trade it among ourselves? Why do we need to go to the MINT and wait for them to mill it into coin, for us to THEN take from them, and spend it? We can just...cut the Gub'mint out of OUR PROCESS...who needs da Gub'mint ANYWAY in our lives? What have THEY EVER DONE FOR US...really?"
And the problem being was, that was one of the MAIN SOURCES OF REVENUE for the GOVERNMENT: SEIGNORAGE. They figured that as long as the people cooperated, and used the mint system, not only would they have their spendable coin, but GOVERNMENT could have the SEIGNORAGE, so that they wouldn't have to TAX THE PEOPLE (even through the APPORTIONMENT TAXES) so much...
Not to mention that the STATES were having problems with readilly accessible sources of GOLD and SILVER drying up, or, finding that readilly accessible sources were on INDIAN LANDS....ON TOP OF any Bank dealings that Government was having problems with....
That's why a Central Bank System was first proposed by Alexander Hamilton.
Yet, the problem remains, whether it be a GOLD, or precious metal based monetary system, or whether it be a FIAT-BASED System, when GOVERNMENT DEALS with a BANK. (even a CENTRAL BANK, and even a CENTRAL BANK SYSTEM that GOVERNMENT CREATES)
And the same problem happened with EVERY OTHER GOVERNMENT THAT HAS TRIED A CENTRAL BANK SYSTEM BEFORE.
And it's akin to MOSES, listening to the THIRSTY HEBREWS, and STRIKING the ROCK, rather than had he listened to GOD, (who put the rock there in the first place) and just merely SPOKE to the ROCK, to quench the HEBREWS thirst.....
Government, thinking it needs to listen to the THIRSTY BANKERS, demanding the "EXPEDIENCY," puts NON-PUBLICLY-TRADEABLE TREASURY CERTIFICATES (ISSUANCES OF DEBT) into the Federal Reserve's Coffers in the first place, rather than doing the Manuver that I outlined in a previous posting above....
As a Result of the WRONG-WAY action, Government THEN, as a way to lower or remove its burdens with the BANK, sells BONDS to the WORLD (including, you and me), with what amounts to a LOWER interest rate (through the yields), than what the TREASURY CERTIFICATES have on their faces, at the BANK....Much in the same way as Paying off a HIGH INTEREST CREDIT CARD, with a LOWER INTEREST CREDIT CARD...or getting rid of DEBT, with another DEBT...
...and this practice of GOVERNMENT keeps being stubbornly practiced, ad infinitum, ad absurdum, ad nauseum...because it's a way to JUSTIFY TAXING YOU at the point of your earnings, at each turn....and a further way for YOU to continue allowing this stubbornly held practice of our Government with OUR BANK, allowing you to keep chanting blindly the mantra "WE ALL HAVE TO PAY OUR FAIR SHARE" essentially so that GOVERNMENT can keep "PAYING DOWN" the National Debt...
.so that those in Congress, when asked by some "WHY must we keep doing this?" Can blithley ask back "Well whose going to pay for the firemen? Who's going to pay for the soliders? (they never ask...Who's going to pay for my FAT SALARY...because essentially that would be the kiss of death to their carreers right there!)
And it isn't smart. Not at all.
NO AMOUNT of raising TAXES, or CUTTING SPENDING proposals is going to fix this problem we have...but, we keep seeming to LOVE hearing all these "wonderful" proposals, don't we? I mean, THAT and whether So-and-So was doing (_____) with the OTHER so-and-so...our EARS ITCH to hear THAT, too...RIGHT?
Maybe it's because we hate the rich man so much, for having, and us NOT having...
So we devised a way to get back at him...
We've CUT OFF OUR OWN NOSE, and allow ourselves to hemmorage a little...to SHOW THE OTHER GUY, HOW WRONG HE IS...
Cutting off your Nose to spite your OWN FACE, is BAD ENOUGH...and doing it to SPITE THE OTHER GUY?
Well, Insanity is sometimes defined as "doing the same thing, over and over and over again, expecting a different result, each time...."
Isn't it time we stopped?
Maybe it's time, we started doing the RIGHT THING? Instead of always doing WRONG, thinking, "Well, NOW THAT'LL FIX THEM...." because it doesn't!
Here's an idea, folks, especially YOU BONDHOLDERS out there, waiting on Government to "PAY DOWN" the National Debt....
Instead of always buying up the Bonds, figuring you're "saving for the future," why not do the ONE THING that NO ONE has ever thought of before....
Take your bonds back to the ISSUING TREASURY...and instead of DEMANDING PAYMENT...why not take out a LOAN instead with them....and use your Bonds as a DOWNPAYMENT....getting rid of the DEBT, (as well as the obligations on present and future revenues to keep TAXING YOUR INCOME MERCILESSLY, just to pay you through the yields and maturities TAX FREE) and helping Government to honor those promises upon those bonds you hold, ALL AT ONCE?
Are you scared? Think you'll have to PAY PRINCIPAL on that LOAN if you try it? You think there better be a LAW against such an idea?
Well, then, if you think THAT....Then all I'm doing is talking to stupid walls, no, COWS and SHEEP...shaped like people, talk like people...and maybe with this NDAA act now....carted off in Livestock train cars, by the Military, for whatever offsense belived warranted...to FEMA CAMPS, there to WORK OFF such a huge insurmountable NATIONAL DEBT, that your Government, who YOU KEEP VOTING IN, ran up on you, for the WORLD (including you) to buy up, so that you can TAX YOURSELF TO OBLIVION, to PAY YOURSELF TAX-FREE.....
...and I will have wasted my time talking to such sheep.
You say the "TAX the FED" idea will only cause MASSIVE INFLATION...
Hmph...I don't think so Dan...Here's why:
right now, the FEDERAL RESERVE HOLDS the BIGGEST AMOUNT of FEDERAL DEBT, in the form of Treasury Ceritificates and BONDS....(second is CHINA)
Now...when you TAX THE FED, in the way I am prescribing, which is 250 times one year's Average Federal Imposition on the Nation (without accounting for "Deductions")...and you're only taxing it ONCE.
What you're doing, is establishing a CEILING LEVEL for the amount of DOLLARS that can be in the system, circulating, exchanged, or held in account, at any one time, alright? And we're talking about BOTH Checkable deposits as well as CASH, as well as CREATED CREDIT.
(which by the way....BANKS NEVER CREATE MONEY OUT OF THIN AIR. NEVER. If they could...they wouldn't need YOU drafting a promissory note with them, saying you'll pay back what you owe...PLUS INTEREST.
The reason why "fractional reserve" seems to break that rule, is because the INTEREST that you have to get, has to be created as well. And in the RESERVE RATIO of 9:1, where banks can deposit your note, and with the Magic of the BANK RULES, allow that submission to have a FORCE MULTIPLIER placed upon it, AND, any of THAT MONEY, created this way, has to be LENT OUT as well, to circulate, (not SPENT OUT), and a PROMISSORY NOTE put in its place to COVER IT, where a force multipler gets placed on IT, and so on, and so on, and so on.....)
What my "TAX THE BANK" idea, as well as my idea of Bondholders DOWNPAYMENT, with Bond ISSUER Treasury, using thier bonds to get rid of the outstanding burden placed upon US as Citizens....
(which consists of my part II and part III of my little "nutty idea" that I have been calling "HOW TO GET RID OF THE NATIONAL DEBT...without breaking a sweat!")
is supposed to work is like this:
The TAX placed upon the BANK is supposed to make a HARD CEILING, (as I stated before) but it also can be raised or lowered, with certain procedures....
DAMN. I've got to go to work, Where did the time go? I have to pick this back up, later on tomorrow, I suppose.