Eliminating the national debt is a BAD idea.

[automatthew]

The national debt is a good thing. Conversely, paying off the national debt would be a really bad thing.
-----

The national debt means that the government owes money. To whom is this money owed?

Investors; i.e. people who believed the government would pay back debts and were willing to "purchase" bonds or other forms of debt transfer.

Who are these investors?

Us, largely. Many Americans have some stake in bonds and securities, whether from retirement accounts or mutual funds, or direct investment. In fact, the national debt was considered by Alexander Hamilton to be beneficial to the commonwealth because it made this sort of situation possible. Government secured debts are minimally risky; how likely is the FG of the USA to default on loans?

So what happens if the government pays off the national debt in full? Well, for one thing, we stop getting paid returns on those bonds, and a major avenue for low-risk investment is closed. Also, eliminating or substantially reducing the debt would cause interest rates to rise disproportionately. If you're willing to accept this without boring explanation, cool; skip the next paragraph. Otherwise, read on.

>begin boring economics<
Foreign governments often back up their own currency with our Treasury securities (instead of the gold standard, the world uses the Trust America standard). If the U.S. government pays off debts, securities are either completely unavailable or in extremely short supply. These countries would have to start using some other guarantor for their currencies (no small inconvenience in itself, not to mention the lack of comparably low risk substitutes). This means less demand for the dollar, which means that the value of the dollar would fall. To prevent the decline of the value of the dollar, the Fed would have to raise interest rates. Higher interest rates would be more attractive to a small class of investors, but bad for large classes of debtors. Short version: debt guaranteed by the U.S. government is valuable to everyone, because it is very low-risk.
>end boring economics<

More troublesome to some is the disposition of the revenue freed by the end of interest payments on the national debt. There are three basic options:

1) Cut taxes so revenue matches expenses.
2) Let Ted spend it.
3) Keep the money as a surplus.

How likely, really, is option 1? No matter whether you think cutting taxes is a good thing or a bad thing, or even if you have a "nuanced view", I think we can all agree that taxes being cut to match a drop in expenses is not going to happen, barring the election of Thomas Sowell as president. So, good or bad, option 1 is right out.

Option 2 is the most likely outcome. Conservatives would oppose it, as should anyone who thinks the government already misuses its revenue. If you believe that an increase in government spending is a good thing, why are you
complaining about the national debt? The money was borrowed to fund your programs, anyway (please please please somebody challenge this! bring up defense spending . . . you know you want to).

Option 3 is, in my opinion, the worst possible scenario. This is counter to the initial sense of most Americans, who think that surpluses are good. "It means our country has lots of extra money, right?" Surpluses in my pocket are good, yes. But surplus revenue in government coffers is not the same as surplus in private hands.

What do we do with surplus cash? Spend it? Same as option 2. Hide it under the bed? If the government just stashed the surplus, it would cause deflation. Invest the money? That is the possibility that I fear most.

Investment means buying a stake in something, purchasing at least partial ownership of a resource, be it a company or a debt. Surplus tax revenue causes the government to own progressively more of a nation's wealth. Simply put: government surplus is money taken from private individuals by the government and used to nationalize increasing portions of the economy. Only socialists and their fellow travelers should consider this a benign result.

Comments?

Matthew

Some arguments were stolen, er, drawn from this article:
http://www.nationalreview.com/07feb00/ponnuru020700.html

[GrayPilgrim]

I like it. Doesn't mean I understand it all. Why don't you here this from the TV guys?

[Ryokan]

But you have the Federal governemnt tying up all this possible investment. Every dollar invested in the gove is one that the private sector would snap up. And since the marginal propensity to save remains pretty constant without an interest rate change, all that money, when the debt is paid off, would go into the private sector. Which would then cause a huge number of bond buyers (bond being anything that pays interest or a dividend, for simplictities sake) to try to buy private bonds, driving interest rates down and stock prices up, and greatly expand growth, since companies have easy access to capital. And there are still Index mutual funds, which traditionally pay better than bonds and are just about as safe, cause your tying your money to the US economy, which powers the gov. So, reducing the debt would help the economy.

[automatthew]

>> But you have the Federal government tying up all this possible investment. Every dollar invested in the gov. is one that the private sector would snap up.<< *

One of the ideas presented in my mini-essay is that the money invested in government debt is, in the main, money that would not otherwise be invested. Economies are not zero-sum games, so we can't just assume that all the money invested in bonds and securities would, in the absence of these negligible-risk opportunities, be invested elsewhere.

Ryokan also does not address the contention that other nations back their currencies with U.S. securities. No U.S. debt means no sure guarantor for many foreign currencies. The gold standard--really any commodity-based standard--is not a worthwhile alternative to the surety of the existence of our republic (see Milton Friedman's Capitalism and Freedom for a discussion of this point). The money that foreign institutions have invested in our debt is not money that could just as well be transferred to private investment; prudent nations would not back their currencies on Microsoft stock.

The possibility I consider most disturbing is not addressed at all in Ryokan's response, possibly because he only advocates reducing the debt, rather than eliminating it. I agree that no harm is likely to come from a national debt greatly reduced in proportion to our national wealth. I do think that we can achieve this by mandating a strict balanced budget with the possible exception of defense spending. A multi-trillion dollar debt that stops increasing will be trivial twenty years from now, as our wealth is likely to continue increasing. The disturbing possibility, as I was saying, is that without a debt our government will start investing our excess tax revenue on its own behalf. When the government invests in a part of the private sector, it is no longer private. Do we really want ANY level of government owning shares in private corporations? What is to prevent the federal government from offering twice the going price for Microsoft shares to gain a controlling interest? What happens to the stock market if some bureaucrat decides to flood the market with shares of some corporation that has suddenly become politically incorrect?

As long as governments are in debt to private individuals and institutions, we are not in debt to the government.

Matthew


* minor typo corrections

[automatthew]

GP:

"Why don't you hear this from the TV guys?"

Because these ideas actually require reflection and reasoning. Most news bodies employ strictly knee-jerk leftists. Have you ever noticed that the news organs considered mainstream are all in New York City, Washington D.C., and Los Angeles?

[Ryokan]

It is not our debt, Auto Mathew, or anything other than the collective faith of our own people and other people, that gives the dollar its value. Money is merely a commodity, and its pricing is based on how well it does something, which is basically trade for other things. So.... No debt would not have a dramatic effect on our money value. And as far as other govs basing their currency on us with there debt, who cares if some of that money goes home. I think the benefit of the extra money in our economy would out way the loss.
And both your problems are solved by two things, a. I don't want to eliminate debt entirely because it would make open market operations difficult, and b., with GDP growth and inflation, a balanced budget would make the debt negligible eventually. But in the medium term, some debt reduction would lead to more growth, which would be good for the economy and help marginalize the debt even further.
And I think gov. excess, in a no or low debt sit, should be given back to the people.
And TV pundits are often journalism and English majors, so....

[automatthew]

Ryokan concluded with these points:

>>And both your problems are solved by two things, a. I don't want to eliminate debt entirely because it would make open market operations difficult,

As noted in my last post.

>>and b., with GDP growth and inflation, a balanced budget would make the debt negligible eventually.

I also made nearly the identical point.

>>But in the medium term, some debt reduction would lead to more growth, which would be good for the economy and help marginalize the debt even further.

We are in substantial agreement over the benefit of moderate debt reduction. My objection was and has been to eliminating the national debt.

matthew

[Ryokan]

sorry, I was unsure of your position after the first post, and clarified mine, which corresponds with yours more or less, in the second. So we agree. :yipee:

[flipper]

Well it's a highly moot point now, as the likelihood of paying off the national debt in the near (or even distant) future receeds into the horizon.

[Yog^sothoth]

:read: i'll get back to you

[e4e]

You guys have bought the fed lock stock and barrel.

First The present momatary system is a debt based system and will work only if we are in debt. The less debt the less money avalable. Look at your paper money. It says Federal Reserve Note. An instriment of debt. A promisary note that is unredeamable should you go to the fed and try to get a real dollar for it. Look up the definition of a dollar and see what the dollar consist of according to law. The only recourse I have in redeming my note is that you will take it as payment for your goods and services and by law you have to take that worthless peace of paper for all payments for goods and services.

Second The goods and services produced is a guarantee, a suriety that the linder of the money has that the borrower has chattel to secure the loan. Your labor, your goods and even including you home can confiscated to satisfy the debt owed to the Federal Reserve System. The goods and services that we thing we own and perform do not belong to us but to the United States Government. It is in there interest at the moment to allow us to use these resourses to contenue to bay the mounting debt that will never be payed and can never be repayed. That is why the dollal is contenually devalued. We call it inflation.

Chew on that for a while.There is a lot more that you do not know because the propaganda machine call the free press in this country will always tow the government line.:o

[Ryokan]

that is completely untrue. The $ has value only because you and I say it does. If we all decided not to use it, then no one could complain. And if the gov wanted everything, they'd try and take it, not have some elaborate scheme which would only work if we all said, "Yeah, it is really the govs stuff, oops". Otherwise the Fed would just have to come and take, scheme or no. So what is the point?
Probably that you are a nut who has never taken an economics class in his life, but fancies himself an expert on things he doesn't understand.

[e4e]

Ryokan
Probably that you are a nut who has never taken an economics class in his life, but fancies himself an expert on things he doesn't understand.

e4e---correct, I am a bit of a nut and no I have never taken an economics class. If what they are teaching you is economics I am glad I didn't.

Can you tell me what a dollar is supposed to consist off?

[Alden]

e4e:
Chew on that for a while.There is a lot more that you do not know because the propaganda machine call the free press in this country will always tow the government line.:o
[/quote]

Hasty Generalization-Definition: A conclusion based on too little evidence. It also occurs when a writer or speaker relies on evidence that is not factual or substantiated.

You have not substantiated the statement regarding there being alot that we don't know. Tell us, where is this hidden information found. Your statement regarding the press, by the way, is a lovely little ad hominem. I have always felt that the media, especially the television news media, is horribly biased. You will get no argument from me on that. However, you would do well to remember that the press encompasses more than this type pf media. It includes radio, newspapers, periodicals, and books. The Oxford Universal dictionary tells us that freedom of the press (or free press) is: "the right to print and publish anything without submitting it to official censorship."

That being said, the works and words of people like Smith, Galbraith, Keynes, former Fed Charman Volker, and Allan Greenspan have come to us uncensored. As far as I know, the current wealth of capitalist countries owe much, if not all, to these thinkers. Keynes, for example, had some things to say about deficit spending that were a good deal more favorable that the opinions that you have set forth here.

Tell me, have you ever read Keynes?

You say that you haven't taken an econ class, so where are you getting your "free from propaganda" knowledge? I'm sure that there are more than a few of us who would like to know.



Can you tell me what a dollar is supposed to consist off?


As far as I know, it consists of paper, ink, and specially implanted microfibers and watermarks

[Ryokan]

the dollar is a convention, much like the constitution. It only isn't just a piece of paper because we say so. In fact, usually its just a couple electrons.

[e4e]

You guys are talking about a worthless piece of paper, not a dollar. What is a dollar according to the only law that congress has passed concerning the issue? You economics majors should know that at least:rofl:

[Captain Ochre]

e4e:
You guys are talking about a worthless piece of paper, not a dollar. What is a dollar according to the only law that congress has passed concerning the issue? You economics majors should know that at least:rofl:

:huh:
The intrinsic value of a dollar is roughly the same as a for a ton of gold, isn't it?

Apart from that, the value is determined by the way society uses the item (which goes along with what Arden wrote, afaics).

[Ryokan]

it doesn't matter what congress says. The dollars value is effectively out of its hands at this point. The dollars value is psychological, just like the value of gold.

[e4e]

Sense you guyes don't even know what a dollal is I will tell you. Futhermore there is no legeslation passed bu the Congress of the United States that establishes any other value.:whip:

STATUTE 1
April 2, 1792

An Act Establishing a mint, and regulating the coins of the United States

DOLLARS OR UNITS--each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

[e4e]

aalso 15 lb. of silver is equal to 1 lb. gold for exchange purposes.

[Ryokan]

You can't exchange it for them anymore, I don't think, and that isn't the dollars value on the world market. And I am not totally convinced what your saying is up to date:argh:

[e4e]

1. Show me where the congress of the United States ever passed a standard for the dollar other than that.
2. absense of any congretional act, who has the authority to make any change in the value of the dollar? Especially when the authority of congress cannot be delegated to any other governmental authority.
3. Has not a fraud been committed against the people of the United States by there elected officials?
4. Are the sovern citizens of the United States obligated to honor any standard that has been fraugently placed upon them?

The Constitution is the one document that allows us as citizens to live freely and be masters of our own destiny and it has been given into the hands of despets.. What should our response be to those who have and are now opperating outside the bounds of the lawful government?

Not easy questions I know. But people like me who honor the law should not be relagated to the frenge of society and counted as untrustworth by the government or consperator by the main stream press. I look at our government and weep for it is shrouded in a cloke of dishonor. I get angre when the propaganda machines called the educational system and free press fill out children with lies and deprive them of there heritage through misleading and false information. When I am gone and others like me, who will be left to defend the constitution of the United States or will it be as youall have done early, regulating the constitution a possission of reather minor importance.

[Ishmael]

e4e:
You guys have bought the fed lock stock and barrel.

First The present momatary system is a debt based system and will work only if we are in debt. The less debt the less money avalable. Look at your paper money. It says Federal Reserve Note. An instriment of debt. A promisary note that is unredeamable should you go to the fed and try to get a real dollar for it. Look up the definition of a dollar and see what the dollar consist of according to law. The only recourse I have in redeming my note is that you will take it as payment for your goods and services and by law you have to take that worthless peace of paper for all payments for goods and services.

Second The goods and services produced is a guarantee, a suriety that the linder of the money has that the borrower has chattel to secure the loan. Your labor, your goods and even including you home can confiscated to satisfy the debt owed to the Federal Reserve System. The goods and services that we thing we own and perform do not belong to us but to the United States Government. It is in there interest at the moment to allow us to use these resourses to contenue to bay the mounting debt that will never be payed and can never be repayed. That is why the dollal is contenually devalued. We call it inflation.

Chew on that for a while.There is a lot more that you do not know because the propaganda machine call the free press in this country will always tow the government line.:o

Well said! But what I can't seem to figure out is why Santa Claus and the Devil are trying to put thoughts in my brain. I have put some metal foil on my head and closed all the blinds in my room.

DDW keeps trying to use her brain powers on me too...

[Ishmael]

e4e:
1. Show me where the congress of the United States ever passed a standard for the dollar other than that.
2. absense of any congrational act, who has the authority to make any change in the value of the dollar? Especially when the authority of congress cannot be delegated to any other governmental authority.
3. Has not a frud been committed against the people of the United States by there elected officials?
4. Are the sovern citizens of the United States obligated to honor any standard that has been frugently placed upon them?

The Constitution is the one document that allows us as citizens to live freely and be masters of our own destaney and it has been given tinto the hands of despets.. What should our response be to those who have and are now opperating outside the bounds of the lawful government?

Not easy questions I know. But people like me who honor the law should not be relagated to the frenge of society and counted as untrustworth by the government or consperator by the main streme press. I look at our government and weep for it is srouded in a cloke of dishonor. I get angre when the propaganda machines called the educational system and free press fill out chrildre with lies and deprive them of there heritage through misleading and false information. When I am gone and others like me, who will be left to defend the constitution of the United States or will it be as youall have done early, regulating the constitution a possission of reather minor importance.

I thought I was the insanse bad speller... :bawl:

[e4e]

Santa Clause and the devil I don't worry abuot but DeeDee ???????? I would be concerned

[Alden]

e4e:
Sense you guyes don't even know what a dollal is I will tell you. Futhermore there is no legeslation passed bu the Congress of the United States that establishes any other value.:whip:

STATUTE 1
April 2, 1792

An Act Establishing a mint, and regulating the coins of the United States

DOLLARS OR UNITS--each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

Here's how the use of laws works: a) they are obeyed, b) they are altered or amended c) They are ignored entirely, and possibly changed (For example the Supreme Court has issued rulings to nullify previous rulings) d) they fall gradually into disuse.

Just because what you have listed above is possibly still on the books, this doesn't mean that it is the law.

Here are some laws that are still on the books in the US:

California-Women may not drive in a house coat.

Florida-It is illegal to skateboard without a license

Indiana-It is illegal for a liquor store to sell cold soft drinks.
-Liquor stores may not sell milk.

Nebraska-It is illegal for bar owners to sell beer unless they are simultaneously brewing a kettle of soup.

New York-A fine of $25 can be levied for flirting. This old law specifically prohibits men from turning around on any city street and looking "at a woman in that way." A second conviction for a crime of this magnitude calls for the violating male to be forced to wear a "pair of horse-blinders" wherever and whenever he goes outside for a stroll.

It is against the law to throw a ball at someone's head for fun.

A license must be purchased before hanging clothes on a clothesline.

The penalty for jumping off a building is death.

As you can see, just because something is on the books, this doesn't mean that it is relevant.

Also, the act establishing a mint was made irrelevant when the Government created the Federal Reserve, giving it the power to print money and regulate currency.

[e4e]

Prior to the establishment of the Constitution and the Republic, early America primarily used foreign coinage. Under the Articles of Confederation the states were permitted to coin money, but Congress had the power to regulate the value of the state coinage. Because this clause of the Constitution gives Congress jurisdiction over coinage and the value of coins, and because Section 10 of the same Article forbids the State to "make anything but gold and silver coin a tender in payment of debts", it was argued in the Legal Tender Cases arising out of legislation during the Civil War, that it was the purpose of the people in their Constitution to put an end to the misuses and abuses of paper money as they had known them. But it was answered that the prohibition of the making of "anything but gold and silver coin a tender in the payments of debts" stand in the Constitution, not against the Nation, but against the State. The Supreme Court held that the necessities of the Nation, which are to be determined by Congress, must control.
On March the 4th of 1933, Franklin Delano Roosevelt was inaugurated as President of the United States. Referring to his inaugural address, which was given at a time when the country was in the throes of the Great Depression, we read:
"I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption. But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe."

President Roosevelt was saying that he was going to ask Congress for the extraordinary authority available to him under the War Powers Act of 1917.
On March the 5th, President Roosevelt asked for a special and extraordinary session of Congress in Proclamation 2038. He called for the special session of Congress to meet on March the 9th at noon. And at that Congress, he presented a bill, the Act of March 9, 1933, to provide for relief in the existing national emergency in banking and for other purposes. Members of the Congress, while not provided with adequate floor copies of the legislation, relying primarily on the reading of the proposed act by the Speaker and with no time to study or discuss the Act, within 40 minutes were stampeded into passing it, giving to the President unprecedented power, amounting to, in essence, that of an "unconstitutional dictatorship"
In opposition to the Act and a subsequent Farm Bill, Congressman Beck, speaking from the Congressional Record, stated:
"I think of all the damnable heresies that have ever been suggested in connection with the Constitution, the doctrine of emergency is the worst. It means that when Congress declares an emergency, there is no Constitution. This means its death. It is the very doctrine that the German chancellor is invoking today in the dying hours of the parliamentary body of the German republic, namely, that because of an emergency, it should grant to the German chancellor absolute power to pass any law, even though the law contradicts the Constitution of the German republic. Chancellor Hitler is at least frank about it. We pay the Constitution lip service, but the result is the same."

Congressman Beck is saying that, of all the damnable heresies that ever existed, this doctrine of emergency has to be the worst, because once Congress declares an emergency, there is no Constitution. He goes on to say:
"But the Constitution of the United States, as a restraining influence in keeping the federal government within the carefully prescribed channels of power, is moribund, if not dead. We are witnessing its death-agonies, for when this bill becomes a law, if unhappily it becomes a law, there is no longer any workable Constitution to keep the Congress within the limits of its Constitutional powers."

In the enabling portion of that Act , it states:
"Be it enacted by the Senate and the House of Representatives of the United States of America in Congress assembled, That the Congress hereby declares that a serious emergency exists and that it is imperatively necessary speedily to put into effect remedies of uniform national application."

In the Act of March 9, 1933, it further states in Title 1, Section 1:
"The actions, regulations, rules, licenses, orders and proclamations heretofore or hereafter taken, promulgated, made, or issued by the President of the United States or the Secretary of the Treasury since March the 4th, 1933, pursuant to the authority conferred by subdivision (b) of Section 5 of the Act of October 6, 1917, as amended, are hereby approved and confirmed."

In Section 2 of the Act of March 9, 1933 "Subdivision (b) of Section 5 of the Act of October 6, 1917 (40 Stat. L. 411), as amended, is hereby amended to read as follows;"
"During time of war or during any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President and export, hoarding, melting, or ear markings of gold or silver coin or bullion or currency, by any person within the United States or anyplace subject to the jurisdiction thereof".
This exact wording is now contained in Title 12, USC 95 (a)
The language in Title 12, USC 95 (b) is exactly the same as that found in the Act of March 9, 1933, Chapter 1, Title 1, Section 48, Statute 1.
º 95b. Ratification of acts of President and Secretary of Treasury under section 95a The actions, regulations, rules, licenses, orders and proclamations heretofore or hereafter taken, promulgated, made, or issued by the President of the United States or the Secretary of the Treasury since March 4, 1933, pursuant to the authority conferred by section 95a of this title, are approved and confirmed.

The Act of March 9, 1933, is still in full force and effect today. We are still under the Rule of Necessity. We are still in a declared state of national emergency, a state of emergency which has existed, uninterrupted, since 1933. In effect the rights of the people guaranteed in the Constitution have been set aside by provisions within the Constitution to provide for dealing with emergencies under the Rule of Necessity. The authority to do this is conferred by Subsection (b) of Section 5 of the Act of October 6, 1917, as amended, "An Act To define, regulate, and punish trading with the enemy, and for other purposes."
Acting under authority from Congress, President Franklin Delano Roosevelt reduced (1934) the standard gold dollar from 25.8 grains to 15.238, or from 100 cents to 59.1 cents. An Act of Congress (1933) had "declared to against public policy" every provision "contained in . . . any obligation which purports to give the obligee the right to require payment in gold . . . or in any amount of money measured thereby." The act repealed legislation making Liberty bonds payable in gold of the standard when issued. In the Gold Clause Cases (1935) the Supreme Court held (1) gold contracts between individuals void as against public interest; and (2) while the United States could not repudiate its gold contracts, plaintiff would suffer no damage from payment in paper because he would have to surrender gold under a call of Government which had already taken the American citizen's gold possessions. A National Debt of over $30 billion, and State debts aggregating over $7.5 billion, all promised in gold, thus became payable in dollars devalued to 59.1 cents each.
It is from this subterfuge that the value of the dollar has declined in value in the fluctuating world gold market to approximately 4.65 cents in actual buying power in terms of pre-1934 gold dollars. In 1963, again by act of Congress, the American dollar (Federal Reserve Note) was taken completely off the gold and silver standards and the Federal Reserve Bank, a foreign owned banking entity, now has total control of the value of the dollar, and consequently the real buying power of the American public. There is now no coin of the United States that has intrinsic value, not excepting the penny, the gold and silver and copper having been removed from them.
In actuality, our Congress, though the agency of the 1934 act and subsequent yearly National Emergency Banking amendments to that Act increasing the limit of the National debt, borrowing more from the Federal Reserve Bank, has mortgaged the entire resources and assets of the United States and its citizens to the Federal Reserve Bank and its wholly owned HIDDEN subsidiary, the Depository Trust Company, with assets of $9.7 trillion, in the form of Commercial Liens against the total assets of the United States and its citizens. The Federal Reserve Bank, in its ability to control interest rates, precludes the possibility of re-paying the National Debt. The United States has remained in an insolvent state of National fiscal emergency as a result since 1933, with the National Debt rising to $5.7 trillion and more, a debt of in excess of $21,600 per each of the present 263,000,000 citizens. (1996)
The debt per each of the 125,000,000 citizens in 1933 was approximately $312 in terms of a "gold" dollar, or in terms of today's Federal Reserve Note dollar $6100. Admittedly, the assets of the United States and its citizens has increased remarkably, where the borrowing power is in excess of $5.7 trillion on assets of $9.7 trillion.
To put this in perspective, in terms of family income, with a single wage earner per family in 1934, the debt per four person family amounted to approximately equal to one fourth of a year's family income. Today, using the same criteria, except one and one half wage earners per family, the debt is approximately 4 years family income, an increase in public debt of 16 times.

[e4e]

A "gold" dollar of 25.8 grains will still purchase today the equivalent in goods and services that it would in 1933.
From this we can see the evil inherent in the misuses and abuses of paper money as we have known them, and the dangers which the use of paper money brings to "We the People" in the abrogation of Rights guaranteed under the Constitution of the United States. The same applies to the misuse and abuse of "plastic money" in the form of credit cards. We can also see the evil inherent in our Legislatures not rigorously adhering to the intent and word of the Constitution as defined by our Founders for sound money practices
and fix the Standard of Weights and Measures;


The Articles of Confederation (Art. IX, sec.4) gave to its Congress "the sole and executive right and power of . . . . fixing the standard of weights and measures throughout the United States", so this provision in the new Constitution is substantially like that in the Articles. Uniformity here is almost if not quite as important as it is with respect to money. Because of systematic frauds practiced, Chapter 35 of Magna Charta (1215) defined liquid measures, measures of cloth, and weights.
In his first annual address to Congress, January 8, 1790, Washington said that "uniformity . . . . is an object of great importance and will, I am persuaded, be duly attended to."
Congress never has fixed a complete standard of weights and measures. It has adopted the wine gallon of 231 cubic inches as the standard of liquid measure. The English or Winchester bushel has always been in use. The standard size or capacity of the barrel for apples and other dry commodities has been prescribed by Congress, as well as the size of the basket for fruits and vegetables. Electrical Units have been defined. The gold dollar of 25.8 grains, nine-tenths fine, was standard until 1934.In 1866 Congress permitted, without requiring, the use of the metric system in the United States and declared that no contract or other writing would be held invalid when expressed in terms of that system. Later (1881) it authorized the Secretary of the Treasury to deliver to the governor of each State, for the use of the agricultural colleges, a complete set of all weights and measures adopted as standard. The Postmaster General has authority to supply to the post offices postal balances denominated in grams of the metric system. In 1901 Congress established the Bureau of Standards. It has custody of the standards, and its duties are to compare standards in use and to construct and test standards, as well as make a general study of the subject.


To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;


Had this power not been expressly conferred upon Congress it would have been implied from the preceding power "to coin money and regulate the value thereof," if not from the inherent power of any government to protect its sovereignty and itself. The power was not conferred by the Articles of Confederation. It has been held that "the securities" which may not be counterfeited include treasury notes of the United States, its certificates of indebtedness (like silver certificates, which now have been abolished), its bonds, its war savings stamps and the bills or paper money issued by the National banks through the Federal Reserve Bank. Currency is no longer issued by the United States Treasury, being printed by the Treasury printing office, and then given to the Federal Reserve Banks for issuance.

It was well settled law (293 U. S. 388) that the power conferred on Congress by the Constitution cannot be delegated to another Department. That principle of the law of Agency was found by Bryce to be the best conception of the Constitutional Convention.
Yet the Legislative Department authorized the President, by a Senate amendment to the House Agricultural Adjustment bill, to reduce the content of the gold dollar, but not below 50 per cent. In 1936 the Agricultural Adjustment Act was held (297 U. S. 1) unconstitutional for taking money from one class for the benefit of another. But in the meantime the President had acted on the Senate amendment and cut the gold dollar.
Among the powers conferred on Congress by the Constitution is that "to coin Money, regulate the Value thereof, and of foreign Coin." At the time the Constitution was written there was much coin of other nations in circulation in America. The Spanish silver dollar was the coin of first importance. By the language quoted, recognition was given to the fact that governments had found it necessary to change the content of their standard coins, a course which conditions might make necessary in the New World.
The President has been given no authority over money by the constitution but all the authority given by the Constitution was conferred, as the language quoted puts beyond question, on Congress alone. Neither in Article I, creating the Legislative Department, nor in Article II, establishing the Executive Department, is there even an intimation that the President should have anything to do with regulating the value of money. That is to say, the power was withheld from him. For another elementary rule of interpretation is that what is not granted is prohibited.
With the authority to regulate the value of coin limited by the Constitution to Congress, the President was, nevertheless, directed (or, what is more probable, allowed) by Congress to perform its task of fixing the value of the dollar. It was for Congress to determine whether the content of the dollar should be changed and, if so, to change it.
Constitutional power cannot be delegated
Delegation of administrative powers to fact-finding bodies which are guided, not by their own will or judgment, but by the specifications and limitations in the Acts of Congress creating them, has been common. The Federal Trade Commission, the Board of Tax Appeals, and many other agencies have been set up to relieve Congress of details not legislative .
But "the Congress, manifestly, is not permitted to abdicate, or transfer to others, the essential legislative functions with which it is invested," said the Supreme Court (293 U. S. 388) in 1934. It pointed out the settled practice that Congress, in the act of delegating administrative powers, must declare a policy, establish a standard, and lay down a rule for its agent to follow in executing the Congressional (not its own) will.
In passing to the President an "essential legislative function," not a merely administrative function, second to none conferred by the Constitution on it, Congress did not itself, so far as the Act and the Joint Resolution show, determine anything -- except that the Chief Executive might use his own judgment within a very wide range. Here began the course of unconstitutional conduct by Congress.

[Alden]

Theologyweb guidelines:

4. Please limit the number of major points made in a debate/discussion to 1 or 2 per post max as this encourages discourse. Rebuttal posts get undesirably lengthy when addressing many points and will result in a request to edit and in deletion by a moderator if not addressed.

6. No copyrighted material shall be posted without prior permission. If other authors are cited in a post, proper credit must be given. Preferably a weblink if available to the source.

Here are some suggestions for you:

If you are going to post something like this, be sure to leave us all a source and weblink.

Also, this is a discussion forum for theologyweb members, so by all means provide some of your own comments when you post something like this.

Just some suggestions from your friendly neighborhood moderator.

[e4e]

Alden---Preferably a weblink if available to the source.

I have tried to do as you suggest but I never seem to get it to work for me. Any suggestions as to how to make the http butten to work for me.

[yxboom]

First please note that you will be posting an article or something of that nature at the beginning of your post because posts are to be a maximum of 12K characters. Breaking of posts are only exempted if they are material that can not be trimmed. If there are not noted they will be treated as a post that is in violation of this rule.

As for the http if you have a popup blocker it will not work. Regardless, all that is required is for you to copy the URL of the link and paste it into the text box. The http button is not needed in such instances.

[e4e]

yxboom, I prefer createing the link but I just didn't know any other way at the time.

Posting the way I did takes up to much space and the subject is covered better with the link. I am going to try it your way. I have a pop-up blocker so that may have been my problem. Thanks a million:yipee:

[Alden]

Alden:
Tell me, have you ever read Keynes?

You say that you haven't taken an econ class, so where are you getting your &quot;free from propaganda&quot; knowledge? I'm sure that there are more than a few of us who would like to know.


What say you?


How is your weblink prob? Try boom's advice, he'd know better than me what to do.:smile:

[e4e]

Stell haveing a problem with linking but it is mostly me now. I can link but I keep going to the wrong link.

am not an economist and I have not read Keynes.

[Alden]

Thanks for the reply, but my question was not addressed so much to whether or not you have read Keynes, but as to where you have studied / received (formally or informally) economic information.

[e4e]

Alden
Thanks for the reply, but my question was not addressed so much to whether or not you have read Keynes, but as to where you have studied / received (formally or informally) economic information.

e4e-----I have done a lot of reading and contemplation bu no fomal traning as such. You might wont to look at this interpretation on Rev 17.

Revelation 17





Revelation 17:1 And there came one of the seven angels which had the seven vials, and talked with me, saying unto me, Come hither; I will show unto thee the judgment of the great whore that sitteth upon many waters:
2 With whom the kings of the earth have committed fornication, and the inhabitants of the earth have been made drunk with the wine of her fornication.

The great whore, who is she? She is not given a name but I think it is possible to recognize who she is. In verse 4 the angle shows where the whore presently is at the time of the writing of this prophecy.

The whore set upon a scarlet colored beast that was filled with the names of blasphemy and had seven heads and ten horns. Lets not concern our selves with the beast at this moment but at a latter time should that be a prudent thing to do. Lets just concern ourselves with the whore.

Revelation 17:4 And the woman was arrayed in purple and scarlet color, and decked with gold and precious stones and pearls, having a golden cup in her hand full of abominations and filthiness of her fornication:
5 And upon her forehead was a name written, MYSTERY, BABYLON THE GREAT, THE MOTHER OF HARLOTS AND ABOMINATIONS OF THE EARTH.
6 And I saw the woman drunken with the blood of the saints, and with the blood of the martyrs of Jesus:---

This whore was very wealthy and had made her living at the expense of the innocent and in collaboration with governments. She set upon government. She was not the government. From her appearance one could deduce a financial system that governments relied upon. It is the governments that were in the position of servitude to the whore. The whore was not holding up the government but the governments was holding up the whore. The whore is the master of the governments.

MYSTERY, BABYLON THE GREAT, THE MOTHER OF HARLOTS AND ABOMINATIONS OF THE EARTH. This is very critical. This is not the Babylonian government but that which the Babylonian government relied. It was not the government itself. King Nebuchanizzar displayed his innermost character and it was this mystery that fed that character and caused its display for the masses.

Daniel 3:1 Nebuchadnezzar the king made an image of gold, whose height was threescore cubits, and the breadth thereof six cubits: he set it up in the plain of Dura, in the province of Babylon.
2 Then Nebuchadnezzar the king sent to gather together the princes, the governors, and the captains, the judges, the treasurers, the counsellors, the sheriffs, and all the rulers of the provinces, to come to the dedication of the image which Nebuchadnezzar the king had set up.
3 Then the princes, the governors, and captains, the judges, the treasurers, the counsellors, the sheriffs, and all the rulers of the provinces, were gathered together unto the dedication of the image that Nebuchadnezzar the king had set up; and they stood before the image that Nebuchadnezzar had set up.
4 Then an herald cried aloud, To you it is commanded, O people, nations, and languages,
5 That at what time ye hear the sound of the cornet, flute, harp, sackbut, psaltery, dulcimer, and all kinds of musick, ye fall down and worship the golden image that Nebuchadnezzar the king hath set up:
6 And whoso falleth not down and worshippeth shall the same hour be cast into the midst of a burning fiery furnace.
7 Therefore at that time, when all the people heard the sound of the cornet, flute, harp, sackbut, psaltery, and all kinds of musick, all the people, the nations, and the languages, fell down and worshipped the golden image that Nebuchadnezzar the king had set up.

This is the way that the Mystery Babylon displayed it self.. It seeks to kill all those who will not buy into its system and consequently the blood of the saints was found in her.

Revelation 17:15 And he saith unto me, The waters which thou sawest, where the whore sitteth, are peoples, and multitudes, and nations, and tongues.
16 And the ten horns which thou sawest upon the beast, these shall hate the whore, and shall make her desolate and naked, and shall eat her flesh, and burn her with fire.
17 For God hath put in their hearts to fulfil his will, and to agree, and give their kingdom unto the beast, until the words of God shall be fulfilled.
18 And the woman which thou sawest is that great city, which reigneth over the kings of the earth.

It is apparent that the Mystery Babylon is a global system. A hidden system. It is also apparent that this system is a economic system that hold sway over the hearts of men and rewards them with capital gain. The affairs of men and government are ruled by the whore and all decisions are made to feed the appetite of the whore.

Revelation 17:10 And there are seven kings: five are fallen, and one is, and the other is not yet come; and when he cometh, he must continue a short space.
11 And the beast that was, and is not, even he is the eighth, and is of the seven, and goeth into perdition.

Now for the beast with the seven heads and ten horns.. The 9th. Verse says that the 7 heads are seven mountains. It is a well known fact that Rome sets on seven mountains. This I do not think is the proper understanding that should be give to this passage. The reason is this. The whore is the Mystery Babylon so the whore was sitting on Babylon giving the prospective of World power of which Babylon and Rome are both one off. The list goes like this 1.Chaldean, 2 Egyptian 3 Babylonian, 4 Medeo-Persion, 5 Grecian, 6 Rome, 7.----, 8.------. The scripture does not say who #7 is but we do know that # 8 is the Mystery Babylon. It is not government that is being talked about but the economic system that exercises control of government will rule. The mountains and the kings are one and the same. It is not a physical mountain that is referred too, but governments, nations and peoples. The Mystery Babylon will be hated buy the ten kings that have not received there kingdom as yet.

Who are the ten kings that have not received there power as yet?

Revelation 17:12 And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.
13 These have one mind, and shall give their power and strength unto the beast.
14 These shall make war with the Lamb, and the Lamb shall overcome them: for he is Lord of lords, and King of kings: and they that are with him are called, and chosen, and faithful.

Revelation 17:16 And the ten horns which thou sawest upon the beast, these shall hate the whore, and shall make her desolate and naked, and shall eat her flesh, and burn her with fire.
17 For God hath put in their hearts to fulfil his will, and to agree, and give their kingdom unto the beast, until the words of God shall be fulfilled.
18 And the woman which thou sawest is that great city, which reigneth over the kings of the earth.

If you will notice the 10 nations receive there power from the beast, not the whore. The beast has sway as government over the nations. The ten nations hate the whore not the governments. Why was the twin towers struck? It was not an attack on the United States but an attack on the whore. The whore is the invisible world economic system that reduces nations to slavery by debt. The United States is the enforcer of the world economic system.

By the powers of deduction, I have formulated an opinion and it is my own. You may disagree and that is fine but basted upon the foregoing This is what I now believe is the world situation.

First, The 10 kings are 10 fundamentally Islamic countries.
Second, The beast is the non Islamic countries in the governments that comprise the Unite Nations and they receive there authority from the United Nations and rule with her.
Third, The 10 Islamic nations will destroy the globel economic system of which the United States is a part and the enforcer.

[Ryokan]

e4e, what value does gold or silver have?

[e4e]

The value of gold amd silver is not the question.The constitutional dollar is.

[Ryokan]

why is it valuable?

[e4e]

Ryokan-----
why is it valuable?

e4e-------The constitutional dollar is legal. the The Unconstitutional Federal Reserve note is illegal. The Congress of the United States cannot legally transfer a constatutional power reserved to it to any other Governmental agency or Department Or to any privet concern. That has been held unconstitutioal by the Supreme Court.

[Ryokan]

why are you afraid to answer my question?

[e4e]

Ryokan---why are you afraid to answer my question?:huh:

e4e---The value of gold is not relavent. The fact that gold is required in an assign amount by an act of Congress is. Why do you wont to dodge the question of a constitutionally legal dollar? The only value gold has to me is the fact that the constitution requires that gold is the commodity on which the dollar is to be bassed. :brow:

[brother vinny]

:bump:

[Ben Franklin]

The value of gold is not relevent. The fact that gold is required in an assign amount by an act of Congress is. Why do you want to dodge the question of a constitutionally legal dollar? The only value gold has to me is the fact that the constitution requires that gold is the commodity on which the dollar is to be based.:brow:

Bretton Woods took America off the gold standard and Nixon buried it, so isn't this moot...? As for the OP, to my knowledge, the Singaporean economy (for example) runs along without deficit financing, so it's inherently unnecessary.

[Sheepdog]

Who bumped up this garbage of a thread?

Who owns our debt? much of it is owned by China. They now practically have our collective nuts in a vice.

[Zero Tolerance]

I was about to say, I don't see the usual hyper-conservatives in here, thinking that this thread was over their heads. I see Sheepdog placed his stamp on the thread with one line to several pages.

[joel]

Zero Tolerance, you really want a response to the thread? Here you go, just for you:


To whom is this money owed?

Investors; i.e. people who believed the government would pay back debts and were willing to "purchase" bonds or other forms of debt transfer.

The purchasers of the debt knew that they would get their money 'back' only because the government would confiscate the necessary amount from someone else by force. (Or roll it over 'forever' in a giant Ponzi scheme.)



Who are these investors?

Us, largely. Many Americans have some stake in bonds and securities, whether from retirement accounts or mutual funds, or direct investment.
Actually, about half of the debt is owed to various branches of the Federal government. More than a quarter is owed to foreigners. Another large chunk is owed to state and local governments. Well under a quarter of it is held privately. (http://en.wikipedia.org/wiki/United_States_public_debt or refer directly to the treasury's website for more detailed breakdowns)



In fact, the national debt was considered by Alexander Hamilton to be beneficial to the commonwealth
Hamilton was in favor of centralized control of money and banking and various things. He had little understanding of economics. Refer to Thomas Jefferson or Andrew Jackson for early U.S. politicians who knew a thing or two about economics.



Government secured debts are minimally risky;
Because of the use (and/or threat) of violence.



how likely is the FG of the USA to default on loans?
Good question. It's currently functioning like a giant Ponzi scheme. Such schemes are not sustainable. They require new investors at an exponentially increasing rate.



So what happens if the government pays off the national debt in full?
I don't think we should pay off the national debt in full. I think we should eliminate it by repudiating the whole thing--announcing that we refuse to pay a single penny of it. ever.



Well, for one thing, we stop getting paid returns on those bonds, and a major avenue for low-risk investment is closed.
And then finally risk must be treated according to reality. This can be only a good thing.



Also, eliminating or substantially reducing the debt would cause interest rates to rise disproportionately.
The Federal Reserve manipulates the interest rate.
Ideally the interest rate would be allowed to adjust to its market equilibrium.



If the U.S. government pays off debts, securities are either completely unavailable or in extremely short supply.
:huh: Yes, US government securites would be completely unavailable. Securities in general would be as abundant as the demand requires. Investors could still invest in productive activities.



These countries would have to start using some other guarantor for their currencies (no small inconvenience in itself, not to mention the lack of comparably low risk substitutes).
Governments should not be controlling monetary media in the first place.



This means less demand for the dollar, which means that the value of the dollar would fall. To prevent the decline of the value of the dollar, the Fed would have to raise interest rates.
This supposes that the Fed should be controlling money or interest rates. The Fed should be abolished so that it cannot do anything.



Higher interest rates would be...bad for large classes of debtors.
It would be a disincentive to take out new loans. So? The current set of government incentives causes people to overconsume and become overindebted. If interest rates are allowed to be set by the market, then finally supply and demand can be balanced.



Short version: debt guaranteed by the U.S. government is valuable to everyone, because it is very low-risk.
Thus distorting the assessment of risk so that it does not correspond to reality. Similar distortion of the assessment of risk was the cause of the recent housing bubble.



There are three basic options:
1) Cut taxes so revenue matches expenses.
2) Let Ted spend it.
3) Keep the money as a surplus.
Obviously (1) is the best option. That it is difficult politically may be a sad reality. But even if the government spends it, repudiating the debt is still better, because we won't have to pay the loans back in the future. (Taxes would eventually have had to be raised to pay back the debt.)



If you believe that an increase in government spending is a good thing, why are you
complaining about the national debt?
Repudiating the debt would limit future government spending because people would be reluctant to lend to the government. Easy borrowing is what currently allows the government to spend as much as it is.



The money was borrowed to fund your programs, anyway (please please please somebody challenge this! bring up defense spending . . . you know you want to).
Cut spending across the board.



One of the ideas presented in my mini-essay is that the money invested in government debt is, in the main, money that would not otherwise be invested. Economies are not zero-sum games, so we can't just assume that all the money invested in bonds and securities would, in the absence of these negligible-risk opportunities, be invested elsewhere.

Yes, it is conceivable that without the "negligible-risk opportunity" not all people would invest the same funds elsewhere. Some may consume some of the funds. Some of the funds may be saved in cash holdings. Saving in cash holdings is relatively neutral because prices can adjust and real spending remain the same. And Keynesian-types say consumption spending is still spending, and it's just as good.

The real effect, though is the opposite of the one you suggest. In reality, almost all of government spending is consumption. It is likely that most of the money lent to the government would be invested otherwise. Thus government deficit financing typically diverts investment to consumption.



The gold standard--really any commodity-based standard--is not a worthwhile alternative to the surety of the existence of our republic (see Milton Friedman's Capitalism and Freedom for a discussion of this point).
I haven't read that book, so I don't know exactly what this objection is. I might say the opposite is true: paper money is not a worthwhile alternative to the surety of the existence of society.



prudent nations would not back their currencies on Microsoft stock.
Prudent nations would not have "their" currencies.



As long as governments are in debt to private individuals and institutions, we are not in debt to the government.
That's absurd. Where do you think the government will get the funds to pay its debt?


As for the discussion of why the Federal Reserve Note has a market value greater than the paper, even though it is no longer redeemable...the root cause is the fact that it is legal tender (by government force), it is demanded as payment for taxes, and other media of exchange are (or were) either outlawed outright or made disadvantageous because of other laws (such as tax laws). In 1933 it required the seizing of the Americans' gold and nullifying of gold clauses in contracts. FRNs have additional value due to their general acceptance in trade. But if this latter value were the only source of its value, then it would be merely a market bubble that could burst at any moment.

[Sparko]

Rise!!!!

[Jedidiah]

Couldn't you raise a thread with a modicum of intelligence instead if this boner?