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View Full Version : How will RP fix the Nation Debt and SS?




bc2208
09-17-2007, 08:15 AM
If the $ from income taxes goes to pay the interest, how will eliminating it asap solve the debt problem? Granted we will stop spending money abroad but how will we account for the debts still owed?

bc2208
09-17-2007, 08:20 AM
preferably 8 ;-)

Shellshock1918
09-17-2007, 08:21 AM
cut spending and taxes.

ThePieSwindler
09-17-2007, 08:24 AM
preferably 8 ;-)

hmm you seem to be one of those "how are we going to live without the fed manipulating monatary policy" types..

but yeah the answer is to cut spending. Sound money can be acheived through a free market approach where other currencies are legal tender and can compete with the current monopoly the government holds on money. The debt itself can be lowered simply by bringing troops home and cutting waste spending (like on bureaucracies such as the DHS and Dept of Ed).

Green Mountain Boy
09-17-2007, 08:25 AM
The congress would not have to pay interest on the National Debt if they borrowed money on the credit of the United States (which is constitutional) instead of using the private credit of the Federal Reserve.

Starks
09-17-2007, 08:28 AM
How long would it take to resolve the national debt? Does the 10 year figure still hold water?

Green Mountain Boy
09-17-2007, 08:31 AM
Why is everyone so concerned about the National Debt ($9 Trillion), when the total debt of this country is $45 Trillion??

bdmarti
09-17-2007, 08:38 AM
The congress would not have to pay interest on the National Debt if they borrowed money on the credit of the United States (which is constitutional) instead of using the private credit of the Federal Reserve.

I don't think that's correct. Yes, it is constitutional for the government to borrow on the credit of the United States, but it must be borrowing money that exists from someone who has that money...and chances are good that whomever loans the government money will want some interest paid on their loan.

The problem with the FED is that they don't have the money that they loan us, but rather they make an entry in a book...and poof...they then say they have money that previously didn't exist.

We'd be better off if we just printed the money ourselves like Lincoln did...even though that's also unconstitutional, at least we wouldn't have such a huge debt.

jj111
09-17-2007, 08:42 AM
If your ship is sinking because there is a huge hole in the hull, the most essential thing to do is to fix the hole so that more water (deficits) doesn't come into the ship. So first stop the deficits. Stop the bleeding and hemorrhaging first.

Only Ron Paul will stop the massive deficits caused by massive spending.

Green Mountain Boy
09-17-2007, 08:43 AM
I don't think that's correct. Yes, it is constitutional for the government to borrow on the credit of the United States, but it must be borrowing money that exists from someone who has that money...and chances are good that whomever loans the government money will want some interest paid on their loan.

The problem with the FED is that they don't have the money that they loan us, but rather they make an entry in a book...and poof...they then say they have money that previously didn't exist.

We'd be better off if we just printed the money ourselves like Lincoln did...even though that's also unconstitutional, at least we wouldn't have such a huge debt.

The congress has the power to create and coin money itself. Therefore it can borrow money from itself (the United States). It doesn't need to be created as interest-bearing notes.

bdmarti
09-17-2007, 09:02 AM
The congress has the power to create and coin money itself. Therefore it can borrow money from itself (the United States). It doesn't need to be created as interest-bearing notes.

Whoa there...

Now we really disagree.

The congress has the power to "coin" money, not to "create" money.

If congress had the power to "create" money, then the powers of taxation and borrowing become meaningless. Why would you need to tax, if you could just print? Why ever borrow, when you can just print?

In addition, the states are strictly prohibited from emitting bills of credit (and FED Notes are exactly that), and yet no explicit power to the contrary is given to the federal government. When a power is not explicitly given to the federal government, then they don't have that power. The phrase "to coin money" which is the power that congress does have means that they can take gold and silver and mint them into standardized coins. That's all it means.

If you inappropriately interpret "to coin money" to mean "to create worthless paper bills of credit" this then conflicts with the explicit nature of the enumeration of powers, it makes the powers of taxation and borrowing pointless, and it creates a further conflict with the states having the limitation of only using gold and silver as legal tender but being forced to use worthless bills of credit to pay the federal government.

Despite Hamilton's desire to the contrary, and despite the creation of the FED and previous central banks, it simply doesn't make sense to interpret the "coin money" phrase as anything but the minting of gold and silver coins.

The FED, and previous central banks, are not an example of ambiguity on the matter, but are an example of corruption and ignorance within government.

Green Mountain Boy
09-17-2007, 09:12 AM
Ok, I wasn't interpreting "coin money" as creating worthless bills of credit. It was just a mistake on my part when I wrote "create."

AZJV
09-17-2007, 10:03 AM
during the civil war, the government created money called "Greenbacks" to finance the war, because central banks were wanting to charge 20 plus percent. They didn't coin it , they created it. If I remeber corectly, the colonies also created the "continentals" which was script.

bc2208
09-17-2007, 10:46 AM
I know and agree with all of the anti-Fed arguments emphatically. I was just wondering if you change the idea of what the role of government ought to be now, you still have the scars of what the government was.

bdmarti
09-17-2007, 10:53 AM
during the civil war, the government created money called "Greenbacks" to finance the war, because central banks were wanting to charge 20 plus percent. They didn't coin it , they created it. If I remeber corectly, the colonies also created the "continentals" which was script.

That is correct. Lincoln did print lot's of money to pay for his war, and prior to the constitution the colonies had continental scripts for money.

However, just because Lincoln and others have tried to have the government print money since the constitution was ratified doesn't mean that their actions were constitutional.

The government does, and tries to do, things that are in fact unconstitutional all the time. When Lincoln printed money, he was violating the constitution.

A fiat currency could be viable and trustworthy only if the persons in charge of creating the currency were both perfectly trustworthy and highly competent, perhaps even to the extent that they had more knowledge and incite than is humanly possible.

Since I don't think the FED or congress is either trustworthy or competent in the area of currency policy, it would be better left with the markets.

I think the debates had during the constitutional convention reflect the fact that the majority of delegates were reluctant to give the power of printing and emitting bills of credit to the federal government, and thus verbiage to this end was specifically stricken/prohibited from the text of the constitution.

It's a shame how often our congress passes laws that aren't even close to being constitutional.

bdmarti
09-17-2007, 11:04 AM
I know and agree with all of the anti-Fed arguments emphatically. I was just wondering if you change the idea of what the role of government ought to be now, you still have the scars of what the government was.

It won't be easy to get rid of the FED. They are going to kick and scream and put up one hell of a propaganda fight.

Here are a few ideas that would be useful when transitioning away from the FED.

The FED holds something like 20% of our debt. With the wave of a legislative pen, we can cancel all debt. Since they pay us the interest anyway, it's not a real problem. Furthermore, even the loss of our bonds as "assets" to back the currently issued currency is irrelevant since the FED can reset it's reserve ratio to reflect it's new holding level.

In addition, all FED notes act as a lien against all the assets of all the FED banks. As we phased out the FED, we could at the same time seize the assets of the FED and sell them. Those assets are currently locked down as supposed backing for our money anyway. Now, with the reserve ratio being at 10% or some nonsense, the FED won't have enough assets to pay off our whole debt, but it's a start.

we've got a big whole to dig our way out of.

Thurston Howell III
09-17-2007, 11:25 AM
The borrower is a slave to the lender, always. So, who are the slaves and who are the masters?
I think if we had a constitutional government it would take care of itself.
And ya know, what's wrong with having more than one currency and letting an open free market figure it out. The fed would be phased out naturally that way, maybe.

Zak
09-17-2007, 12:05 PM
The national debt will not be an issue if Ron Paul is elected. We owe trillions of federal reserve notes. When Ron Pail is elected, he's going to start a competing United States currency, probably a 100% reserve requirement gold currency. This currency will outcompete the Dollar on the market. The FRNs will collapse in value, as people rush to trade them in for real currency and our debt will be trillions of mostly worthless pieces of paper. From what I have heard him say, I think that this is how is plans to get rid of the FED.

katao
09-17-2007, 04:22 PM
The national debt will not be an issue if Ron Paul is elected. We owe trillions of federal reserve notes. When Ron Pail is elected, he's going to start a competing United States currency, probably a 100% reserve requirement gold currency. This currency will outcompete the Dollar on the market. The FRNs will collapse in value, as people rush to trade them in for real currency and our debt will be trillions of mostly worthless pieces of paper. From what I have heard him say, I think that this is how is plans to get rid of the FED.

Yes, this is my understanding too. I like the plan, except for the concern about what other nations (in particular CHINA), will do when they realize that the US is working around paying them the true value for their debt holdings. I'm sure RP has thought this through (along with the very smart people he will place around him), but I'm just wondering...