Why Does the Govt Pay Interest On the National Debt?

[Lamarr]

And Who Do They Pay It To?

How important is this issue worldwide? Having private banks create money is the root cause of all world poverty, hunger, disease and misery. And until we fix it, we will never be able to make a dent in these other issues.

We can fix this. We can fix it in a matter of months -- a year at most. We can make our government the most financially sound in the world -- nearly overnight. The government can loan out all the money any state needs to build roads or schools or hospitals – interest free. Approximately half of a state’s infrastructure cost is from interest on borrowed money! When the money is repaid by the states it will all come back to the federal government, preventing inflation. All we have to do is to take back the power to control the quantity of money and put that power into the hands of the federal officials closest to the voting public -- namely the Congress of the United States.

Some say, “Well, those crooks in Congress will create too much money once they get the money power.” But Congress now “creates” all the money it wants! It just creates it as DEBT, which never gets paid back, and which we the people have to continually pay interest on. Instead of creating bonds -- or debt -- the government could and should be creating DOLLARS, interest-free.

Article 1 Section 8: Congress has the authority to coin money & regulate the value thereof: Or have we strayed away from the Constitution?

 

[yureeka9]

Wow! Looks like a lightbulb has turned on in your head! Welcome to the world of common sense and rational thought! Population: just a few...

 

[BrainChild09]

This is an idiotic suggestion. I don't even know where to start.

 

[nofrillz]

yah
this falls into the seems like a good idea at the time

its simple the government gets money from taxes yes... but also mostly through bonds (paper that says they will pay you back in X years with interest) that they sell to BANKS and other government though there NATIONAL BANKS (fedral reserves)

so if there is no interest payments then it would be like writing a blank check to who ever where ever...

futhurmore it would be logical to think that they would take this blank check and invest it in schools and roads and shit that will develop the county. BUT they will spend ALLL of it on GUNS, BIGGER BADDER STONGER GUNS!!!!

then after the country goes bankrupt they will ask you to pay 90% income taxs and youll be like FUCK THAT but it wont matter because they will by now have BIG FUCKING GUNS POINTED AT YOUR FACE and youll be like I want to leave this fucked up place, but you won't be able to because all the road are busted from all the tanks that parade though the city and the only airport will be a milirty airport



if you think this is made up consinder alot of the african counties, there bank/government can't/don't pay interest on there bounds, alot of those contry do have resources but no one invest in the country, all investment is forign and they are left payin intrest on money outside of the country.

seems like a good idea at the time

 

[nofrillz]

also there is something call Stagflation

this mean if there is no inflation your economy will stall, if no one is going to get a return on there investment they won't invest in a business or country, so no investment mean no growth.

there is also something call marginal propensity to spend uncontroled interest rates and overcontroled interest rate change people spending habbits... this margianl propensity to spend is what i was discribing in the above,


this is some deep level Macro Economic shit trust me it will keep go on for days trying to explane why we need good governmental control on intrest rates

people have done masters on this topic

so yah
not a Eureka moment at all

that like saying if you eat your own shit they there will never be waste in the world!!!! EUREKA

 

[Cruise]

^^^^^^^^^^^

Well, you've got all the points I wanted to make.

But, it just occured to me why Abraham Lincoln had to stop.

When a government prints its own currency, there is no incentive for any other nation to accept it.

With the Federal Reserve, at least they can get other nations to buy into the BS. But, with government fiat, at best, it only works on its own citizens, not with other nations.

There would have to be price AND wage controls AND high taxes AND government regulations all over the place.

It would basically turn into Soviet Russia, if the government printed all the currency.

Goodbye Chinese kitchenware. Goodbye Japanese electronics. Goodbye Middle East oil.

 

[Lamarr]

^^^^^^^^^^^

Well, you've got all the points I wanted to make.

But, it just occured to me why Abraham Lincoln had to stop.

When a government prints its own currency, there is no incentive for any other nation to accept it.

With the Federal Reserve, at least they can get other nations to buy into the BS. But, with government fiat, at best, it only works on its own citizens, not with other nations.

There would have to be price AND wage controls AND high taxes AND government regulations all over the place.

It would basically turn into Soviet Russia, if the government printed all the currency.

Goodbye Chinese kitchenware. Goodbye Japanese electronics. Goodbye Middle East oil.

If the currency is backed by an instrument of wealth, that provides incentive for the world to trade with us

 

[Cruise]

If the currency is backed by an instrument of wealth, that provides incentive for the world to trade with us

Is it that you think government should use fiat or should government use a convertible paper currency? Either way, it ends in disaster.

There have been many schemes by governments to use a base for their paper currency other than money (gold and silver).

They tried...

land,
stock,
wealth,
commercial credit,
and
government debt.

All have prices in the market, in terms of money. So, government uses that set price, at time of issue, to decide how much paper currency to issue.

Unfortunately, prices do not standstill in the market, whether for money, or for other wealth. With a given stock of money available, when the government adds its own paper currency as a substitute, you essentially have paper and money making the same transactions. This immediately distorts prices. People will use the less valuable paper instead of the more valuable money (gold and silver).

The government has just disrupted the economy.

To try and keep the disruption as small as possible, the government uses a bureaucracy to determine how much paper to issue based on the "true" prices in the country. They never get this right because there are millions (billions, trillions?) of different prices. When you add political pressure to always pay for "one more thing" to that you get a strong incentive to always overissue.

More issues leads to more price distortion, leading to a massive outflow of money (gold and silver), black markets, increased imports, and uncompetitive exports.

Government paper currency tends to destroy local manufacturing, sort of the way that is happening with the Federal Reserve, but a lot worse and a lot faster.

Just look at the Continental currency and I would include Lincoln's greenbacks. Both didn't use a Central bank and both failed against government demands for more spendng. Neither lasted a decade without losing half of its initial value to gold money (or a lot more in the case of Continental currency).

No matter what a government tries to use to back its paper currency, it always fails because of its tendency to overissue due to its disruption to prices.

Personally, I don't believe the Federal Reserve Note is true fiat. To me, it is backed by oil and is really a petrodollar. Foreign governments do not want paper because they know it has no value. But, they will take oil. As oil gets more expensive, watch the Federal Reserve Note die.

True government fiat and paper currency never lasts more than a few years before they have to add convertibility or stop issuing it.

 

[Lamarr]

I don't get y'all, we were warned from the beginning!

"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."

- Thomas Jefferson