"Mathematically Impossible to Pay Off US Debt"

I'm going to post the concluding paragraphs to this article and open up the floor to discussion;

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...if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this....

#1) If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.

#2) The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back.
That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

Of course if we had listened to our very wise founding father Thomas Jefferson, we could have avoided this colossal mess in the first place....

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

But we didn't listen, did we?

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.

http://theeconomiccollapseblog.com/a...-national-debt

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I dunno about all of that...but I do know you keep borrowing from the Chinese to service a debt caused by the massive increase of social entitlements and the Iraq war, nothing good will come of it....

Best would to replace the USD to some other currency, to use when trade world wide.

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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Originally Posted by Steve Boyd

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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You might want to look up who bought the most Bonds last year then.

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Originally Posted by Steve Boyd

Ask yourself what the US Government Debt really is. It's actually made up of things like Government Bonds, nice safe investments that if the idiots in the banks had bought (i.e. lent their money to the Government) instead of squandering their funds by lending them to the seething hoards living in dilapidated properties in run-down down-town USA the world wouldn't be in this mess.

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The reason the greedy banks lent money to people who wouldn't pay it back was because they were told to by the US Gov't in the 90's.....

Fannie May and Freddy Mac were the two lending institutions that created the marjority of those loans. They then sold these loans to other banks as part of other transactions and basically poisoned the whole banking industry in the US, and some of these bad loans were sold to bank's outside the US. Now ...you want to draw the lines and connections here to why all this was done or do we need to spell it out? Heck..I might as well, Steve, the government of the time was interferering in a process that has run well for decades to solve a problem that the government wanted to solve, that is put more minorities and lower class workers in their own homes, which conveniently is BS because people who cannot afford the home and have no equity IN the home would have no problem walking away from the home.

So...in conclusion, before one blames this on bankers, ask why Senator Dodd and Barney Frank were so defensive when questioned on all of this stuff emmm? They were head of the committees in the Senate and House over seeing all of this and took record numbers of donations from Wall St. firms over the years.

Government should regulate and NOT participate in the economy and politicians on financial matters should NOT be taking millions in campaign donations from the same institutions they are overseeing......

A question.

Does it even matter? I mean virtually all money is fiat money, which means a Dollar or an Euro is worth a Dollar or an Euro only because the government says it is.

I can see where deficits would lead to inflation so debts today are paid off in the future with cheaper money in the future, but really, the only thing that gives money value is our faith that government and rule of law (property rights) won't collapse.

As an aside, I don't think the gold standard is any better. What is gold? It's just a shiny metal with some industrial uses that is also used for ornamentation and jewelry. If it has to be based in a commodity, why not lumber? If push came to shove, I could at least build stuff with it.

When I think about it sometimes, all economics is really a house of cards, so I really try not to think about it too much. ;)

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Originally Posted by Mark in Oshawa

The reason the greedy banks lent money to people who wouldn't pay it back was because they were told to by the US Gov't in the 90's.....

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As the entire world has just seen, but the implications escaped you, is that banks and financial institutions do whatever they want to and what they want to do, regardless of anything else, is MAKE MONEY.
THEY with their embedded former CEOs etc in Government positions, tell the Government what to do, not the other way.
We just saw it nakedly with the Trillion dollars of Government--taxpayer---money forked over to them....

Only a silly person would suggest otherwise.



They lent, even on risky ventures like ME! because just writing a loan, flilling in my name at the top of a mortage contract and hitting PRINT could make them 6%.
6% of a couple of hundred thousand dollars for the time to type john vanlandingham and an address.
Their cost for the clerk doing the typing, a couple of bucks, the paper, about 130 sheets, the minimum they make was several thousand dollars for a couple of minutes "work" if i defaulted in 1 month;
the most is over $400,000 profit when the loan is repaid....

that's called a "good risk".

Try coming down to earth occasionally......

Yes but:
http://www.nytimes.com/2010/02/05/op...05krugman.html
[SNIP]

Fiscal Scare Tactics
By PAUL KRUGMAN

Published: February 4, 2010

These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.

Yet they aren’t facts. Many economists take a much calmer view of budget deficits than anything you’ll see on TV. Nor do investors seem unduly concerned: U.S. government bonds continue to find ready buyers, even at historically low interest rates. The long-run budget outlook is problematic, but short-term deficits aren’t — and even the long-term outlook is much less frightening than the public is being led to believe.

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

Consider, for example, what the latest budget proposal from the Obama administration says about interest payments on federal debt; according to the projections, a decade from now they’ll have risen to 3.5 percent of G.D.P. How scary is that? It’s about the same as interest costs under the first President Bush.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

The trouble, however, is that it’s apparently hard for many people to tell the difference between cynical posturing and serious economic argument. And that is having tragic consequences."


More of the same tactic from the same exact people that brought you Weapons of Mass Distraction?

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Originally Posted by janvanvurpa

As the entire world has just seen, but the implications escaped you, is that banks and financial institutions do whatever they want to and what they want to do, regardless of anything else, is MAKE MONEY.
THEY with their embedded former CEOs etc in Government positions, tell the Government what to do, not the other way.
We just saw it nakedly with the Trillion dollars of Government--taxpayer---money forked over to them....

Only a silly person would suggest otherwise.



They lent, even on risky ventures like ME! because just writing a loan, flilling in my name at the top of a mortage contract and hitting PRINT could make them 6%.
6% of a couple of hundred thousand dollars for the time to type john vanlandingham and an address.
Their cost for the clerk doing the typing, a couple of bucks, the paper, about 130 sheets, the minimum they make was several thousand dollars for a couple of minutes "work" if i defaulted in 1 month;
the most is over $400,000 profit when the loan is repaid....

that's called a "good risk".

Try coming down to earth occasionally......

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Yep they're supposed to make money. And if the system was allowed to play out without government interference, the ones that were making risky loans would have gone out of business. Going out of business sure isn't making money. That's one hell of a deterent to the next guy to come along and cook up some stupid scheme. But that's not what happened, now is it? The government (yes under Bush) came along and "bailed them out" because they were "too big to fail". What's the lesson there? It sure as hell isn't watch what you're doing closer, it's make yourself "too big to fail". And that is precicely what the banks have done. They used their TARP/bailout money to buy up smaller banks. And now we're all just waiting for the next bubble to burst. And if you don't think that's comming you're a fool.