Truth About National Debt

Truths about Money

1. Debt (loans) is the only way we currently get new money into circulation.

2. Money is not scarce! It takes a simple push of a computer keyboard to create.

3. The cost of this creation is ZERO ($0) except for excess inflation. There is a small cost for distribution.

4. There is no such thing as the “National Debt”. A debt is something that has to be paid back. The U.S. has not paid its national debt off since 1835. The debt should be labeled as the National Monetization account. This type of debt is not the same as you and I owing money! The only way the debt is really retired is by the Federal Reserve Bank of New York creating new money and buying Treasuries. Some people think that it is still an obligation of the U.S.

If all the debt and interest had to be paid off at once, there would not be enough money in circulation because the current money-debt system does not create the compounding interest charges, but only the principle. Since it does not have to be paid off at once, there is enough money in circulation to pay interest, but it does create unnecessary scarcity that causes hardships, conflicts, and additional borrowings to pay the debt service. This limits growth by forcing the economy to keep borrowing in order to pay the interest charges. This is the main reason that the banking system is unsustainable. It is impossible to pay back because there is not enough money to do so, thus causing the system to

What stops the bank-led financial system from expanding credit and money without limit, including to their owned investment banking side? The obvious answer would be that it would stop when participants ran out of profitable opportunities. But this is not a convincing answer if the activities of the hyperactive intermediaries in aggregate create the perceived opportunities: credit growth breeds asset-price bubbles that in turn breed credit growth. What stops it, is a crisis or collapse of the market used for collateral such as the 2008 mortgage crisis.

28. Banks are profit-seeking, risk-taking financial institutions. One’s money is at risk except for the insured amount. Therefore, they should not have the power to create money, but to only distribute it.

29. Monetary reform will reduce the financialization of the American economic system. This means the economy is stimulated by the shift from making things to the manipulation of money, which involves: derivatives, mergers and acquisitions, venture capitalism, leverage buyouts, workouts and turnarounds, currency speculation, and arbitrage. One of the reasons for this excess is the creation power attached to the banking sector. The monetary system becomes the servant and not the master of the economy, as it is now!

30. Permanent increases in the money supply only come when there is a write down or total failure to repay a bank loan. Is bankruptcy an appropriate way of having permanent money for our economy? Of course