The federal government is drowning in debt. Currently, it's over $34 trillion in hock. The interest alone on that debt is at $1 trillion annually is the largest single line item on the official expenditure sheet.
Yes. Government debt is a multiplier. It multiplies debt and all the negative consequences of massive, unpayable debt.
If from such colossal indebtedness, we were as a nation seeing amazing developments springing up in every sector of our society, I suppose we could somehow rationalize our insolvency. But we're not.
Insolvency? As the world is slowly waking up to, the $34 trillion will never be repaid, not in its entirety. In fact, in order to continue paying the interest on the bonds we've sold to borrow the money we have borrowed so far, we will have to issue more bonds. And borrow more money. This can only end badly.
I'm hardly the first -- probably the 12,000th -- to point out that the whole regime of borrowing to fund the functioning of the government as now practiced, is a gargantuan Ponzi scheme. There's no way around it: Government debt multiplies government debt. We borrow money we don't have to inject cash into the system, accruing interest, which then requires us to borrow more money or slash spending to such levels that government's ability to function is crippled, if not completely shut down. This is idiocy to the power of ten. It is unnecessary, illogical, wasteful, and devastating to the greater well-being of the citizenry. It ultimately will be fatal to the country as a functioning entity.
Periodically, more and more frequently in recent times, we confront this absurd trap with bickering about the "debt ceiling". We are alerted to potential government "shut downs", with foaming at the mouth over the urgency and gravity of our dilemma: Borrow more money vs. drastically cut spending. Borrowing almost always wins out. Which is why we are where we are.
I'm sure that there are many members, probably the majority, of Congress who are genuinely convinced of the necessity of tackling this difficult dilemma as currently framed, who are genuinely panic-stricken when confronted with such a crisis "on their watch". But the truth is these manufactured meltdowns are essentially a sham. And both these clueless government representatives and the public are being played for suckers.
I realize that's a rather nasty indictment of the high melodrama of our national debt crisis, fecund fodder for histrionic huffing and puffing by the media which goes on sometimes for weeks on end. But let me pose THIS simple question . . .
Why is the government borrowing money in the first place?
Phrased a little differently: If we need to inject money into the stream of cash available as "legal tender" to cover expenses, either private or public -- aka create currency -- why does the government have to borrow the money to do it?
The perfectly simple, factually accurate, straightforward and honest answer is that it doesn't. The Constitution is very clear on this. Article 1, Section 8 . . .
There have been two occasions where the U.S. sidestepped the debt route and issued money directly.
Abraham Lincoln used "greenbacks" - the paper currency shown below - backed by nothing more than confidence in the government - to finance the Civil War. He printed $449,338,902 of this currency, a lot of money at the time.
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