Ron Paul's suggestion to not pay FED debt is gaining traction!

[RileyE104]

This seems big to me. Articles coming out claiming that it's actually a SOLUTION to temporarily ending the debate over raising the debt ceiling. :)

Here's one of the articles:
http://curiouscapitalist.blogs.time.com/2011/07/05/debt-ceiling-could-ron-pauls-plan-save-us-from-disaster-twice/

[Patrick Henry]

When I saw The New Republic speak positively of this I thought this could be huge. Maybe it will be? The good Doc should bring this up every chance he can.

[specsaregood]

The bankers are not gonna like this, not one little bit.

[AGRP]

Well, why do we owe them when we didn't sign for any loan?

[Carehn]

The bankers are not gonna like this, not one little bit.

Yep. Im not really the conspiracy type. But if i was looking to get killed i would do or say something along these lines.

Ron is bold and brave. Its like he doesn't care anymore. Guess he thinks ideas are bullet proof.

[smartguy911]

The Treasury pays the interest on the debt on behalf of the U.S. government to the Fed, which in turn returns 90% of the payments it gets back to the Treasury.

where does 10% goes?

[JacksonianBME]

The problem with this is that the damage has still been done in the sense that the currency has already been inflated. This is in essence turning the dollars created for this debt into greenbacks. I thought we were honest money folks?

[harikaried]

This is in essence turning the dollars created for this debt into greenbacksThe money has already been created when the Fed purchased the bonds. The quoted $1.7 trillion is the interest the government owes to the bond holder, who right now is the Fed. If the bonds were mature, the government could pay back those bonds which then gets returned to the Treasury. Except most of the bonds mature at a much later date, and the interest cannot be paid back now to clear the debt.

I believe Ron Paul would rather the Fed cancel the future interest payments on the bonds (where the money would have returned to the Treasury) as opposed to letting the Fed sell the bonds to another entity. If another entity holds the bonds, the interest paid by the government would stay in the hands of the bond holder.

[specsaregood]

where does 10% goes?

Oh silly mundane; don't worry your little head with such details. These are not the 10% you are looking for.

[sailingaway]

He didn't suggest not paying the debt, he suggested not paying the fed the INTEREST the US 'owes' the Fed on the money it printed out of thin air. I think Progressives like the idea of not paying the DEBT and they are the ones saying that. Ron hasn't opined on that, at all. It was in the WHO radio interview if anyone wants to listen to it.


Oh silly mundane; don't worry your little head with such details. These are not the 10% you are looking for.

That would be the interest...?

In any event that is yet another conflict of interest. Their budget is bigger, the more money they print. Oh, goodie.

[lester1/2jr]

"
The Consumer Financial Protection Bureau, for instance, by way of Dodd-Frank, specifically gets funded from the interest that the Fed collects on the U.S. Treasury debt it owns."

oh well forget it then, we couldn't do without this previously non existent yet will be amazing bureau. This will put 4 bureaocrats out of work no way.

"
But eliminate the debt and those reserves go away, too, which could lead to less lending by the banks."

they aren't lending anyway


"
But the biggest potential draw back is this: It just looks bad
"

as opposed to how things look now.

[harikaried]

"But eliminate the debt and those reserves go away, too, which could lead to less lending by the banks."The Fed has other tools for monetary policy. Only recently did they start going through this QE/QE2 buying up all sorts of mortgages and bonds.

[Paul Or Nothing II]

I've posted a detailed response on this in Grassroots Central - http://www.ronpaulforums.com/showthread.php?302042-Ron-s-idea-re-the-debt-ceiling-catching-fire...&p=3382120&viewfull=1#post3382120



The problem with this is that the damage has still been done in the sense that the currency has already been inflated. This is in essence turning the dollars created for this debt into greenbacks. I thought we were honest money folks?

What are you trying to say? The decision to extinguish the debt doesn't affect the moneysupply.


He didn't suggest not paying the debt, he suggested not paying the fed the INTEREST the US 'owes' the Fed on the money it printed out of thin air. I think Progressives like the idea of not paying the DEBT and they are the ones saying that. Ron hasn't opined on that, at all. It was in the WHO radio interview if anyone wants to listen to it.

Nope, he's talking about not paying the DEBT ie the "principal". Look at it like this way, there are ~14 T worth of IOUs in the market issued by the Treasury & Fed OWNS 1.7 T of them & Ron is talking about writing this off. Read my linked post for details.


where does 10% goes?


Oh silly mundane; don't worry your little head with such details. These are not the 10% you are looking for.


That would be the interest...?

In any event that is yet another conflict of interest. Their budget is bigger, the more money they print. Oh, goodie.

Fed generates "profits" while conducting its operations, a lot of it comes from the Treasury itself in the form of interest on Treasuries (debt), it distributes 6% of it among its member-banks, some is used towards paying Fed's own operating expenses & then rest are turned back to Treasury (this is the 90% it's talking about)

[scottditzen]

This is really good publicity...my head hurts thinking about it too much, but it makes a lot of sense.

[sailingaway]

I
Nope, he's talking about not paying the DEBT ie the "principal". Look at it like this way, there are ~14 T worth of IOUs in the market issued by the Treasury & Fed OWNS 1.7 T of them & Ron is talking about writing this off. Read my linked post for details.







Edit --

It looks like you are right, he says 'interest' at first, but at the end he says 'save $1.5 trillion dollars', and that has to be principle, right? Here is the part of the interview (go to the bottom for the video /radio interview segment) http://www.mediaite.com/tv/rep-ron-paul-america-should-declare-bankruptcy/

[Paul Or Nothing II]

Edit --

It looks like you are right, he says 'interest' at first, but at the end he says 'save $1.5 trillion dollars', and that has to be principle, right? Here is the part of the interview (go to the bottom for the video /radio interview segment) http://www.mediaite.com/tv/rep-ron-paul-america-should-declare-bankruptcy/

Yes, he's talking about the principal. The "interest" that he referred to would be the FUTURE INTEREST that'll've to be paid on it. Like 1.6 T of debt Fed is holding, some of those Treasuries will mature in a few months, some in a few years & so on, so if that principal is extinguished today then there's no question of paying interest on it in the future.

[IDefendThePlatform]

This is just more proof that our guy is the only one who truly understands monetary policy and how to make it work for Americans.

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It's about 50/50 between Ron Paul supporters and Gingrich/Bachmann supporters now, so could use some help with intelligent, pro-Ron Paul comments. Thanks

[DamianTV]

Hey, I put it in my Sig!

[dejavu22]

If there was ever an article to try to drudge bomb this one might be it. Could get a solid differentiation from the rest of the field and if it comes to pass then it would be huge leverage in the campaign.

Honestly we may want to make pushing for this plan or current prime directive for some pre Ames buzz.