For every
debtor there is a creditor. What the
members of Congress understood, but which the gullible public did not, is that
a $4 trillion debt for debtors, represents $4 trillion in claims for the creditors!
And the members of Congress were the creditors.
To get us out of this historically-set trap,
today's Congress has a range of options
First, it
could simply stop paying interest on the debt.
Keep in mind that interest is
the fuel that is exploding the debt. So
cut off the fuel and stop the
explosion. Since 1790 over $3 trillion in interest-payment obligations
have been added to the original $75 million debt. So, cutting out interest payments would
immediately cut the annual deficit (that taxpayers must pony up each year) by
about $300 billion. (Experience
shows that all other conventional actions, no matter how painful, do no more
than slightly slow the rate of debt growth.) Then Congress could actually and
realistically begin the process of paying
off the debt, using newly created, government-issued
(not borrowed) money.
One thing that will make it difficult to
stop the payment of huge amounts of interest that cripples our economy
As we all
know, the monied elite control politics.
And with the cessation of interest payments to those who have loaned the
country money (by buying its treasury bonds), many amongst this monied elite
would have their incomes significantly reduced.
Insurance companies and pension funds, too, are invested in federal debt,
i.e. they too own treasury bonds -- and foreign holders would also be upset, for they likewise are heavily
invested in these status-quo financial arrangements, corrupt though these
arrangements may be. Economically, however, we as a country
simply cannot for very much longer continue to add compounding interest payments
to our existing and gargantuan indebtedness.
Another set of problems
The biggest
debtor is not the federal government. It
is business corporations, and it is impossible for them to forever increase the
physical production of goods and services in order to keep up with the exponential
debt growth that plagues them. And yet,
if they are to remain profitable, their production and sales must keep
up with the debt growth. Problem is,
many of them will, in the long term, not be able to do this. Why not? Because the wages they pay their workers will
never be enough to let them (the workers) buy all of the growing amounts of
products and services the business owners must sell, in order pay the rising
amounts of interest on their exponential debt growth.
The result
of all this will be that many of
these businesses will necessarily fail, and layoffs will consequently continue
at a high rate. Unlike the indebtedness
of these businesses, the physical economy has limits. So the result is not only going to be growing
unemployment and therefore shrinking wages (as ever larger numbers of newly
unemployed workers compete with each other and attempt to underbid each other). The
result is also going to be inflation that constantly reduces the buying power of
wages. (The more interest payments these
businesses have to pay, the more they are going to have to raise their prices
in order to stay in business.)
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