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Can you personally spend your way out of debt?

  1. Harvey Stelman profile image60
    Harvey Stelmanposted 6 years ago

    Our Politicians think they can. Tell me if you or the government can; and how?

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      jerrylposted 6 years ago in reply to this

      I think you phrased that question wrong.  It should read, Can you spend your way out of debt without borrowing?  The politicians are trying to spend our way out of debt with borrowed money.

      The answer to that question, is no.  It is not possible under a debt monetary system!  That is because we are always creating a debt greater
      than the debtr money supply created, because no money is created to pay the interest on any loan. 

      We cannot pay debt with debt, we can only transfer our debts to others.
      This is proven through simple logic.

      Under this system, all money is created through the extension of credit from private commercial banks.  When you earn money through commerce, it is money that has been captured from the debt principle of someone's loan that has been spent into circulation.  In essence, their indebtedness has made the money needed to pay off your debts, available.

      Jerryl

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        Jerry,

        Excellent; are you an economist os just intelligent? Obama should talk to you.

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          jerrylposted 6 years ago in reply to this

          Harvey,  No, I am not an economist.  I don't think there are many politicians that would take the necessary actions needed to remedy this
          monetary system that is based on fraud by deception.

          My friends and I have a solution, but the banking lobby has so much power over our elected representatives, that they will just table any bill we put forth. Reelection is more important to them than a fair, honest system for the entire nation.

          We have been studying our monetary system for 25 years, and lobbying our state legislature for about 14 years now.  We are educating more and more people on the truth about this debt system.  It's a hard uphill battle, and we do not get paid for any of our efforts.  We do this on the hopes that
          we may be able to leave a better legacy for our children and grandchildren.

          If congress could give the control of our monetary system over to the federal reserve, then there is no reason why congress could not pass laws that would enable the U.S. treasury to create all monies necessary to
          pay for the maintainance and new construction of all infrastructure projects across this nation.

          This could also include all of the mass transit system needed by nearly all of the large cities.  HIghways, bridges, tunnels wouldn't cost the consumer one red cent.

          Just think of the benefits of having it done this way.  There would be no need for any road use taxes or fuel taxes. We woiuld take millions of people off of the welfare and unemployment roles, and give them livable wage jobs with full benefits.

          The cost of shipping product across the nation would drop, as would the cost of manufacturing.  This would enable the U.S. to have a better chance at bringing down our foreign trade deficit.

          Because the mass transit systems would be maintained and paid for without borrowing, we could lower our reliance on foreign oil.

          Congress has the power to coin money and to build post roads.  Combining those two powers would accomplish this feat.

          We could eventually eliminate the federal reserve, by placing gradually increasing reserve requirements on the banks as the new wealth money gained in strength.  Once the wealth money gained enough strength to handle the nations monetary needs, we could take the power away from the bankers and have them go back to a fee for service business.  No more creating money out of thin air for the banks.

          People will argue that this method would be inflationary.  I disagree.  All money created in this fachion would be matched by productivity.  In other words, we would earn our money, then spend it into circulation, without any debt or interest debt attached to it.

          The power would come back down to the people where it belongs.

          Jerryl

          1. Harvey Stelman profile image60
            Harvey Stelmanposted 6 years ago in reply to this

            Jerryl,

            I would like to know what state you are in. A good friend of mine is running for the Senate in Texas in 2012. He is presently VP of the Dallas chapter of the Republican Party. He knows economics very well, and is big on the Constitution. 

            If you wish to discuss this with him, I think it would benefit both parties. Please write me via my contact box.

            My thoughts: The present Congress will never listen to your proposals, everything will have to wait for 2012. Even if the Republican's gain many seats in 2010, they will be vetoed and unable to override.

            I'm not so sure about the effect you think this will have on welfare. There are too many people there that will not qualify for the positions; and what will the unions do to get their share? What you propose will create jobs nationwide, the present gov't will want to control things through the unions. I think the unions may be your biggest challenge.

            Welfare recipients will not want to move to remote areas to work. Many on welfare are single women with children and no skills, many want to stay on welfare. How do you convince people that have been on welfare for generations to work? When I was going to run for President in 2012 (an Internet campaign) I was going to give 2-3 years on welfare, provide job training and cut off welfare.

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              jerrylposted 6 years ago in reply to this

              Harvey, Thanks for responding. I live in MInnesota.  Our proposal for change is called the Minnesota transportation act.  We will be working toward it's passage on a state level again this spring.

              Yes, I would like to discuss this with your friend in Texas.  I will get in touch with you as requested.  I also have some other people that you would be interested in talking with on this topic.

              To me, it doesn't matter which party is in the majority in congress.  They always seem to be able to shaft the public.  They are manipulated like pawns in a chess game by TPTB. The only thing that will stop this is educating the masses about the fraud by deception.

              The effect this will have on welfare recipients will show a slow but steady improvement.  First of all, under our proposed system, people would be able to keep more of their (earned, not borrowed money).  Fathers would be able to earn at least enough to support, to a greater degree, their estranged families.
              Not all people would have to move to remote areas.  There is enough maintainance needed on existing roads, bridges and tunnels to last a long time.  Mass transit systems will take a lot of planning and time to develope.
              Giving people the opportunity to earn a real livable wage with full benefits, surpasses by far, living in a ghetto with just enough to survive.

              As far as unions go, the necessity for unions was corporate greed.  If you recall, the formation of the Teamsters union was the direct result of greedy businessmen, contracting with truckers. They would negotiate an agreed upon price for hauling produce, then when the trucks arrived the
              goods, they would only offer the truckers a small portion of the agreed upon delivery price.  If the truckers didn't accept, they would tell them to let the produce rot on their trucks.
              If things were operating honestly, there would be no need for unions.

              We will talk more on this topic I am sure.

              Jerryl

    2. darkside profile image80
      darksideposted 6 years ago in reply to this

      Personal debt is nothing like a countries economy.

      Whether it will work is another matter.

      But there's an old saying "you have to spend money to make money". But I'm not sure such a simplistic approach will work with such a complicated problem.

      1. eovery profile image60
        eoveryposted 6 years ago in reply to this

        Darkside, this only works when you can have a positive cash flow.  The government has been in a negative cash flow for years.   If it was a business, the banks would have shut it down long ago.

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      Poppa Bluesposted 6 years ago in reply to this

      Obama can! Don't you remember his campaign Yes We Can! And of course half of America believes he can...in fact I think even HE believes he can, and hey, after all he IS a Harvard graduate smarter than us regualr folks... He must have minored in the New Math...

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        chasingcarsposted 6 years ago in reply to this

        You majored in stupid.

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          Madame Xposted 6 years ago in reply to this

          You majored in arrogance smile

    4. ledefensetech profile image80
      ledefensetechposted 6 years ago in reply to this

      Absolutely not, we'll be paying for that over the next year or so when prices rise due to last year's massive increase in the monetary supply.  You should remember 1979-1983.  Those years' economic problems were due in large part to the massive increase of the monetary supply undertaken by Jimmy Carter.  Luckily I was a kid then and my dad in the service, so we were somewhat sheltered from that bit of stupidity, but like many Americans today, I live under the threat of inflation. 

      It's earlier than I expected, but even the newspapers are reporting somewhat accurately that the "economic growth" we've seen over the last few months has been due entirely to government spending and once those supports are gone, our economic problems will only deepen.  So, in the end, we've consigned ourselves to be poorer and suffer high prices for all goods and services, for no real effect on the nation's economic problems.  That is something the American people should keep in mind, as this is an election year and there are still those in office who think we can spend and/or inflate our way to prosperity.

      We need more people like Scott Brown who recently said in an interview that not one single solitary job was created by the stimulus bill.  Instead of talking about another bill, we need to be talking about how to reduce governmental spending and give those savings back to the American people, so they can get to work building new businesses and getting us out of this hole we're in.

    5. Pr0metheus profile image60
      Pr0metheusposted 6 years ago in reply to this

      A more accurate analogy would be "can you invest your way out of debt".... yes, you can.  But I don't expect you, or the majority of people here to understand that.  Some of the wealthiest men in this country also has the biggest debt....

      Imagine this:

      You have a great product idea.  In order to design, manufacture and create the product you obtained a loan of $50,000.  You are now $50,000 in debt.  With that $50,000 you were able to create the product, but you still need staff and advertising to sell the product, which will cost you another $50,000 a year (not actual numbers just an example).  With the $50,000 extra investment a year you expect to make $100,000 a year, meaning you will break even in the first year, and be up $50,000 by the end of the second year.  If you chose not to invest you will make a profit of about $5,000 a year.  This means that it will take you 10 years to break even, and 20 years to see the profit you would see in 2 years with the investment.

      Is it a good idea for you to chose not to invest the yearly $50,000 ($50,000 a year) because "you can't spend your way out of debt"?  Sure, if you're an idiot.

      Your question is fundamentally flawed.

      1. Sab Oh profile image61
        Sab Ohposted 6 years ago in reply to this

        Now what would motivate you to make such a dismissive comment?

      2. eovery profile image60
        eoveryposted 6 years ago in reply to this

        This is more of a cash flow analysis.  The government has a negative cash flow, so more borrowing will only make it worse.   We are screwed!

    6. EmpressFelicity profile image83
      EmpressFelicityposted 6 years ago in reply to this

      Individuals can, by investing their money in on a commodity when its price is low and then selling it at a higher price later on. Or by using the money to start up a successful business.

      I don't think governments work in the same way as individuals though - not when national debts are really humungous, like they are in - say - the US and Britain.  You can't easily spend your way out of debt as a nation if your debt is measured in the trillions.

      All that will happen in the end is that the government will have to claw the money back by raising taxes, which will kill off any economic recovery because people won't have any disposable income (or put it this way, they'll stop buying fancy gadgets and start swapping home-grown vegetables instead).

      In Britain much of our national debt arises because of money being earmarked for public sector pensions and private finance initiatives.  As the public and quango sector becomes ever larger, that means more and more public sector pensions and less genuine productivity, with all that implies.

    7. LiamBean profile image89
      LiamBeanposted 6 years ago in reply to this

      Good Lord! Not this again. The worst defect spending on record was committed, yes committed, by the Bush Administration; followed closely by Ronny Raygun, and you guys are flapping your gums about deficit spending during the Obama Administration!

      You folks have no concept of hypocricy. You do, however, are first rate at screaming about the opposing team, when your team is not only no better, but directly responsible for the mess we are currently in.

      Do what you kept telling the left to do for eight years. Shut up!

      1. eovery profile image60
        eoveryposted 6 years ago in reply to this

        liambean,  the worse deficit spending was just done this year by you buddy Obama.  You had better look at your data a little better.

        1. kerryg profile image85
          kerrygposted 6 years ago in reply to this
          1. LiamBean profile image89
            LiamBeanposted 6 years ago in reply to this

            I didn't mention data.

            Bush took office on the promise of less government and less waste. The proceeded to insure the government has never been larger nor spending any higher.

            Everyone seems to forget that. Why?

            Slightly off topic. Do you "own" a home?

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              Denno66posted 6 years ago in reply to this

              No offense intended, but, I missed you in the forums. I figured Harvey has good points to ponder, but I waited in vain to see your rebuttals. big_smile

              1. LiamBean profile image89
                LiamBeanposted 6 years ago in reply to this

                Thanks...I think.

                I like to assume that I have good common sense. You don't spend what you don't have. In fact I don't; I have NO credit whatever and don't want it. Of course that has not protected me from this fustercluck of an economy. But at least I will owe no one when things finally get better.

                I still want to know if the high and mighty tea partiers, especially, the fellow who started this thread, has bought a house. And if so how?

    8. MikeNV profile image76
      MikeNVposted 6 years ago in reply to this
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      chasingcarsposted 6 years ago in reply to this

      You have mixed your issues:  we tax to pay for our debt/ we spend to get money circulating again when money freezes up, you know, like now.  Our National Debt, just like every other nation's, must take a back seat at this point to reestablishing a means to start creating jobs and get money circulating again before we can dig ourselves out of this hole.  You don't do that by locking up the economy.  Government makes money by taxing its citizens to create a structure upon which industry can flourish.  All those big businesses, including the banking industry and state governments, require a stable infrastructure supported by federal  government and regulated by law to thrive.  The government, the largest spender, has the best chance of getting  the economy going again. Once our people, who have been poleaxed by this crises, have a chance to get back up to speed, we can get our deficit under control.  Clinton achieved that during his eight years in office.  We can do it again.  China poured huge amounts of money into its economy and is back on its feet again.  We spent too little and awarded too much in tax cuts, which generate no money to circulate, to get the results we needed.  In addition, how do tax cuts help people who have no jobs?  We need to overcome our fear and become the responsible nation upon which the world once could depend; to do that, we need to work together and be willing to sacrifice.

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        jerrylposted 6 years ago in reply to this

        Chasingcars,  If this had been an honest wealth monetary system, no one would have been poleaxed.

        Yes China poured huge amounts of noney into it's economy, in the form of borrowed money.  They have a central bank also.  If you have watched the news lately, you would have heard that China has raised the reserve requirements on it's banks because of the rapidly increasing debt.

        Jerryl

    10. IntimatEvolution profile image82
      IntimatEvolutionposted 6 years ago in reply to this

      Yeah it sure seems like they think they can.  By the way, the USA went to the Dutch in the 1780's and borrowed a sum of 5 million dollars.  Five million dollars, back then was equivalent to a trillion dollars today.  So, this debt of ours, is nothing new.  Alexander Hamilton, implemented a plan and had it paid off within a few years. 

      I guess my point is that our debt is not unmanageable, nor is it the beginning to something else.  It is what us Americans do, and it is something we have managed to pay off before, time and time again.

      I wish the mass media would also print more historical facts, along with there wack stories. Like for instance, "this is the highest national debt America has ever seen."  Well no, in dollar amounts- but not relative dollars. It is not even close!

      1. Misha profile image76
        Mishaposted 6 years ago in reply to this

        How did you arrive at this number? I mean trillions?

        1. IntimatEvolution profile image82
          IntimatEvolutionposted 6 years ago in reply to this

          Historical document in researching.  I'm not too sure if I could find it again, Misha.  But the sum was actually more, do to our inflation rate at that time, and of course do to interest.  Those figures, I do not remember at all.

          1. Misha profile image76
            Mishaposted 6 years ago in reply to this

            But you build your whole argument on those figures. It is invalid.

            According to http://data.bls.gov/cgi-bin/cpicalc.pl inflation devalued dollar about 22 times since 1913. Assuming the same pace it was around 30 times from late 1700 to 1913. Combined, the multiplier is about 1200, and multiplied by 5 millions is about 6 BILLION. A far cry from trillions...

            And inflation back then did not even exist btw - dollar was tied to gold, so in reality we are talking something like 200-300 millions in current prices at the maximum...

            1. Shlomo SL Abrin profile image61
              Shlomo SL Abrinposted 6 years ago in reply to this

              In 1780, the most popular medium of exchange was whiskey. No one but the landholder, bankers, and perhaps a few artisans held any precious metal.

  2. SparklingJewel profile image66
    SparklingJewelposted 6 years ago

    common sense rules...you can't get out of debt by creating more debt...DUHHHHH hmm

    1. Paradise7 profile image86
      Paradise7posted 6 years ago in reply to this

      REally, yes indeed, spend your way out of debt?  Sounds completely crazy to me, and that's what our gov. is doing now.  As if we really needed to dig the hole deeper.

  3. Onusonus profile image87
    Onusonusposted 6 years ago

    Of course you can. Remember that dude that traded a red paperclip over the internet and wound up with a House?

    1. rebekahELLE profile image90
      rebekahELLEposted 6 years ago in reply to this

      hey, I have that book and have never completed it. I forgot I had it... don't know if that concept could work for a country.

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        rebek,

        It doesn't work; you don't have to read the book now.

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      onu,

      I don't follow things like that; has it worked for anyone you know?

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        chasingcarsposted 6 years ago in reply to this

        Yep, China.

    3. eovery profile image60
      eoveryposted 6 years ago in reply to this

      Onusonus,  my great friend, he did not borrow, he invested.   He bought low and sold high.  I don't think he went into debt.  sorry.

  4. Cagsil profile image61
    Cagsilposted 6 years ago

    I agree with Darkside about personal debt is different than the economy of a country.

    A personal debt could be made to disappear, with the correct expenditure of funds. Putting the money to work, instead of the person working to only make it.

    When money works within a certain set of rules, it can be manipulated to accumulate a rapid return, however, if you're unaware to make such moves, then it isn't likely you can do it.

    With that said. On the U.S. problem of spending- I do believe you can "make money", but like business...you do have to spend some to make it.

    The problem is that there are really tight restrictions on what the government can technically purchase through Wall Street.

    The government needs to get a better return on it's money than what it is getting right now. Plain and simple. I would be shocked, if the employees, in some of the higher departments took pay cuts because of lousy performance.

    Spending is required to make money. It would also be helpful if America would stop policing the world. smile

    Just a thought. smile

    1. Paradise7 profile image86
      Paradise7posted 6 years ago in reply to this

      I really don't understand this and haven't for years.  The hole gets bigger.  You need actual cash to fill it in.

      Yes? 

      The "spend money to get money" is true, but then you have to spend it on something that turns a profit.  The gov.  (American gov.) is spending future income, along with a big helping of pie in the sky, not to generate revenue but to prop up individuals who would otherwise sink like a stone.  That doesn't make money, it just spends it, money that we don't have, money that puts the gov into further debt, money that will, in the end, be unrevcoverable.

      1. classicalgeek profile image88
        classicalgeekposted 6 years ago in reply to this

        Those middle-class families who have suffered downturns will, once the economy recovers, again be taxpayers. That's like saying that you're not going to go to college because it costs too much--which is different from saying you're not going to college because you expect not to make back your investment. Investing in these families now will pay returns for years down the road, and avoid future expenditures on their behalf.

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      cag,

      Check out J.P. Morgan and bailing out the government in 1907. We just added 2 trillion to our debt. Why do you think we don't put sanctions on China for the dangerous products they sell us; they OWN US!

  5. Misha profile image76
    Mishaposted 6 years ago

    No you can't. Well, strictly speaking you can to some extent if you are good at borrowing, but eventually you just run out of people who are willing and able to lend you. The same refers to countries. smile

    1. Petra Vlah profile image60
      Petra Vlahposted 6 years ago in reply to this

      Spending is not the answer; saving is!

      People can do it (I just posted a hub today about it).

      If countries would run their affaires the same way a private business or an individual does (which is finding ways of saving and delay gratification) IT CAN BE DONE

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        Pet,

        And it's such a simple thought.

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        jerrylposted 6 years ago in reply to this

        Petra,  Under debt monetary systems, if everybody saved and no one borrowed, there would be no dollars.  If all loans were paid off, there would not be one cent left in circulation.  This includes all checking and savings accounts.  If we quit borrowing under our current system, the system begins an immediate collapse.

        The creash of 1929 was the result of the bankers contracting the money supply. 

        Jerryl

        1. Rochelle Frank profile image88
          Rochelle Frankposted 6 years ago in reply to this

          So if debt is needed, who should we be indebted to?
          Isn't a little problematic to be deeply in debt to China, for instance?

        2. MyWebs profile image83
          MyWebsposted 6 years ago in reply to this

          Jeryl you are absolutely correct. I have recently been studying how the Federal Reserve works for a hub I'm writing and learned about what is called the "Mandrake Mechanism" and what you say is exactly what it explains.

          Every dollar is created out of thin air at the Fed to balance the books on government debt, usually Tbills or government bonds. Money created out of debt! When the dollars make their way to the banks is where it gets really crazy.

          With our "Fractional-Reserve Banking" System a bank basically creates 90 cents for every dollar that walked into the door whenever a person wants a loan. Money created from debt! 1 new dollar walks in the door and has a 90 cent baby. Now you have $1.90 running around instead of 1. This cycle repeats for each dollar, or part thereof,  about 28 times!

          So for every dollar of government debt 90% more fiat money is produced during the first wave alone. Rinse and repeat this cycle about 28 times! Each cycle 10% less new money is produced than the prior wave. Given enough demand for loans in the end $1 becomes $10 dollars! What started out as $1 of government debt became $10. I have oversimplified and skipped many of the details here for clarity and to keep this short. But basically this is how it works.

          You think rabbits multiply like crazy. They have nothing over the American fiat dollar.

          The idea that ANY bank could ever get into financial trouble is ludicrous considering how our Fractional-Reserve banking system works. They PAY interest on the 1 dollar deposited , but then they create 9 more eventually at no cost to them, out of thin air that they CHARGE interest on. Do that math! To think that we are footing the bill to bail out all of them big banks makes me see red.

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            jerrylposted 6 years ago in reply to this

            Myweb,  It's encouraging to hear from someone who has actually taken the time to do the research.

            I have been trying to get people to realize the fact that getting into the game of blaming one political party or the other, is just what TPTB want.

            Most people obviously do not understand that they are participating in the misdirection games that the bankers want played, until they can figure out how to place the blame for this economic mess on Joe sixpack.  In reality, the people do not have a choice.  The only way we are allowed to create money, is through loans and other debt instruments.  If we quit borrowing, the system collapses, and we lose everything to the banksters, through foreclosure.

            The banks create the money out of thin air to loan us, (BUT IT IS ACTUALLY CREATED ON OUR PROMISE TO PAY, WHEN WE SIGN A LOAN AGREEMENT).  Therefore,  We are the actual creators, but the bankers reap all of the benefits.  If we default, they get to repossess the
            asset and resell it to another, in the same fashion.

            (THIS IS FRAUDE BY DECEPTION), because the money needed to pay interest on any loan is not created, and has to go into the cost of doing business, or the cost of living.

            Think about this.  When a banker has a homebuyer sign a mortgage, (lets say for $100,000.00.  Just top keep it simple, The interest on the loan is 10% over 30 years.  NOw this money is being created on the buyers promise to pay, but the banker, wor doing about 2 weeks of pree-mortgage paperwork, and sending out monthly statements for 30 years, will collect well over $200,000.00 in interest, that no money was created to pay,  The money to pay the interest has to come from the debt principle of other people's loans that have been spent into circulation, making it available for the first person to capture through commerce.

            Multiply this process by billions of home and auto loans, credit card loans,
            and I think anyone should be able to see how we got to this point economically.  (WE ARE FINANCIAL SLAVES TO THE FRACTIONAL RESERVE DEBT MONETARY SYSTEM). There is no way out of it until we educate the masses, and they realize that they have to get up off of their backsides and pass the word to their neighbors, and demand that their legislators take action. 

            Thanks for your post.

            Jerryl

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      Mish,

      You are correct; when others won't lend to you, kaput!

    3. cheaptrick profile image75
      cheaptrickposted 6 years ago in reply to this

      That has pretty much happened Misha.The only thing maintaining the Dollar is the fact that it is the world reserve currency.Other countries that hold trillions of dollars of our debt are scrambling to find a way to shift to another currency without losing what we owe them.When that happens 10 to 13 trillion will come due.Hyper inflation will follow then the bubble will burst.Some economists are saying they see only two ways out.In effect,declare bankruptcy and issue a new dollar backed by hard assets or War.

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        jerrylposted 6 years ago in reply to this

        Cheaptrick,  We have been relying on the military industrial complex for too long.

        I don't know what hard asset would be able to back the dollar.  There isn't enough gold.

        They won't even look at creating money through the maintaining and new construction of infrastructure, unless it's with borrowed money.  That makes it impossible.  FDR tried, but he did it with borrowed money.

        Congress should pass a law giving the treasury the capability of creating the necessary money to maintain and build new infrastructure, without any borrowing or interest.  It should just be spent in.

        We have to get back to earning money, not borrowing it.  The usury interest is the problem.  There is never any money created to address the interest on any loan, so we are always creating a debt greater than the debt money supply created by each loan.   This monetary system is killing our own economy, as the cost of the interest has to go into the cost of doing business, and is constantly raising our cost of living. This also means higher taxes, and less expendable income.

        Jerryl

        1. cheaptrick profile image75
          cheaptrickposted 6 years ago in reply to this

          Spot on my friend!
          Derivatives are estimated at One Quadrillion!as I'm sure you know Derivatives have No Value!0!
          I'm following China's lead and converting all investments to silver and land in historically stable Countries.Costa Rica,Belize.
          I've heard over and over that Hyper Inflation is Not happening BUT
          I went to a supermarket and saw a Five Dollar Pineapple!
          That says it all!
          Get your money the Hell Out of money!

  6. earnestshub profile image87
    earnestshubposted 6 years ago

    Private debt can be overcome by spending, but you need money to spend first.
    Example: I once put a mortgage on my home to finance a consulting contract. Within 2 weeks I had returned the money and made a 300% profit. smile
    Government debt is much more complex, but I see America is getting returns from the banks now. smile Mind you, with their profits and size, it does not take long to get back in profit, even after returning the funds.

    1. Rochelle Frank profile image88
      Rochelle Frankposted 6 years ago in reply to this

      And The President wants to use those returned funds, to pay for a new government program of giving loans to small business--- instead of reducing the deficit.  He wants to keep the country ing debt, and get other citizens further in debt. Does this make a lot of sense?

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        Roch,

        It just doesn't make sense, period.

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      earn,

      But our gov't. just creates more debt with the money. They should be paying off our debt.

  7. bgpappa profile image86
    bgpappaposted 6 years ago

    Yes, this has been the conservative economic philosophy for years, deficit spending to stimulate the economy to raise revenues and over the long haul everybody wins.

    Of course it hasn't worked yet.  The problem is Americans want everything (spending) but don't want to pay for anything (taxes).  Over the last thirty years, we have been spending more and more, but refuse to pay as we go.  So when the economy failed and revenues dropped, the debt we see today.

    1. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      bgpa,

      I have a feeling you don't or don't want to understand the problem. We just raised the debt $2 trillion yesterday; what did Republican's have to do with that?

  8. Flightkeeper profile image80
    Flightkeeperposted 6 years ago

    Technically the gov't can spend their way out of debt if that borrowed money was spent to start businesses or stimulate businesses in order to grow the economy and then the gov't would get the money back and more from  the collection of taxes.  However, the gov't isn't spending a lot of money on private businesses, they are spending it on gov't projects which tends to waste money.  And they are increasing taxes on businesses which means the cost of doing business has increased and made it harder to make money.  I don't think, given this scenario, that the gov't can spend their way out of debt.

    1. Cagsil profile image61
      Cagsilposted 6 years ago in reply to this

      Good point. smile

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      flight,

      They can't; especially if they add to the debt, which they continually do.

    3. 0
      jerrylposted 6 years ago in reply to this

      Flightkeeper, government spending borrowed money on creating new businesses or trying to stimulate businesses doesn,t accomplish anything except exactly that .  Those mewly created business would have to produce a product or service.  Just producing a product or service, does not increase the money supply. 

      So if the government spent borrowed money to build a new factory, where would the money come from to pay for the new products?  Remember, you said borrowed money, which has to be paid back with interest, which no money is created to pay,

      You cannot pay debt with debt

      jerryl.

  9. 0
    jerrylposted 6 years ago

    So, where is the money supposed to come from, to make it possible to pay one's way out of debt?

    Money does not have reproductive capabilities. Your employer didn't always have it, and neither did you.  Money has to have an origin.

    Write to the treasury or the federal reserve, and you will find out that all M1 money, (THE MONEY THAT THE PEOPLE, BUSINESSES AND GOVERNMENT USE TO PAY THEIR EVERYDAY BILLS), is created through the extension of credit from private commercial banks, or other debt instruments.

    Under this system, all money in circulation are debt dollars.
    It doesn't matter if those dollars are coin, currency, checkbook or electronic transfer.
    They have been borrowed by someone or some business, and spent into circulation.  The people that have borrowed this money and spent it into circulation, have mortgaged part of their future productivity.

    If you have debt, you are one of those people. Every person that does manage to capture enough debt dollars to get out of
    debt, has in essence, transfered their indebtedness to another person, by capturing the debt dollars that the other person borrowed and spent into circulation.  Without that other person's indebtedness, there would not have been any dollars in circulation for you to capture, enabling you to pay off your debt. 

    Why do you think a government has to keep raising their debt ceiling?

    We would have to have a system that created money as wealth rather than through indebtedness in order to actually pay our way out of debt.

    Only those high up on the economic ladder, who were somehow able to capture larger shares of the debt dollars would be able to avoid debt, by using other peoples debt to their advantage.

    That is why approximately 80% of the worlds wealth is owned by about 5% of the people.

    Jerryl

    1. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      Jerry,

      Some excellent points; we are up the creek.

  10. Maddie Ruud profile image81
    Maddie Ruudposted 6 years ago

    I can think of times it might be necessary.  Say, you've lost your job and need to buy a new suit in order to interview for a new one.  You may need to go further into debt temporarily to buy that suit, in order to secure a future income stream, to get yourself out of debt.

    1. 0
      jerrylposted 6 years ago in reply to this

      Maddie,  Kind of like a student going deep into debt for an education.
      After attaining the degree in his chosen field, he finds out that the job he was seeking has been outsourced to foreigners or the company he was planning to work for has moved to a foreign country where they could get the labor cheap without paying for any benefits.

      no guarantees

      jerryl

  11. Has_aWayWithWords profile image79
    Has_aWayWithWordsposted 6 years ago

    in personal finance i think the method of spending your way out of debt is possible however I think the term is misleading. It all revolves around on what you spend, when you spend, and how you make that spending return a positive gain. For governments the idea of spending out of debts is more in terms of giving tax breaks and giving grants to large companies in the hope that it will create economic growth and jobs which will in turn give gains due to more tax revenue, this only works if the government picks the right companies to help much like people who buy and sell stocks. The government has been bad lately at picking the right investments.

    1. 0
      jerrylposted 6 years ago in reply to this

      All of the talk about ways to stimulate our economy with borrowed money is bogus.  We have nothing but borrowed money.  Putting temporary bandaids on the gaping monetary wounds of this nation, is only trying to delay the inevitable. 

      Before too many years, this system will reach a point where just servicing the interest on total debt, will surpass total gross consumer income.  It's coming.  At that time, man will have to choose between paying his taxes or feeding his family.  You know which man will choose. 

      Then the government will not take in the monies needed to honor it's contracts with corporate america.  Then the stock market will fall.  What's invested in the stock market?  IRA's, 401K's and pension plans.  All down the tubes.

      Jerryl

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        Jerry,

        You didn't mention inflation. Not being able to borrow money will drive us into deep inflation. We may need wheel-barrels to buy a loaf of bread, like Germany.

        1. 0
          jerrylposted 6 years ago in reply to this

          Harvey,  Yes, inflation would occur if the change in monetary policy was not done properly.

          Starting up a wealth monetary system will work, however, we can not cut the federal reserve system off at the knees.  That is why or solution proposes a gradual increase in reserve requirements for the bankers.

          As the new money becomes progressively stronger, the bankers would not be able to loan out as great a multiple of their reserves as they did before.  This is the only way that it could be done. There wouldn't be much noticable difference in the currency, except on the newly printed bills, which would be called United States dollars, instead of federal reserve notes.  Most of the money creation would occur in the form of electronic transfer, just as it is done now.

          Choosing the infrastructure as the vehicle for change was deliberate.  We want it to be limited to only the infrastructure, because everyone benefits from it.

          Everything would operate just as it does now, with the exception of taking a lot of the decision making away from the federal government, and putting in back up to the city, county and state levels.  The only function at the federal level would be that the treasury would create and  debit the money out of an asset monetization account, into a state transportation project account, which would in turn debti it out of their account, into the
          winning bid contractors account.  Then the real meaningful work begins.
          The people would finally get a fair deal, infrastructure with no debt or interest attached.  We could even eliminate toll roads.
          What a concept huh?  Why is it that congress and the senate don't want word of this solution to leak out?
          Jerryl

  12. marinealways24 profile image59
    marinealways24posted 6 years ago

    How many people spend their way out of debt in Vegas?


    Obama disses Vegas when he takes the Vegas economic approach. lol

    1. MyWebs profile image83
      MyWebsposted 6 years ago in reply to this

      I can name two major Casino/Hotel projects here in Las Vegas started out of debt, loans, that are now stalled long term. One is about 3/4 done, the other maybe 1/4. These are multi-billion dollar projects on prime real estate sitting idle due to the credit crunch, the bad economy and greed when times were good.

      I speak of the $2.9 billion Fontainebleau where the El Rancho once was.
      http://www.lasvegassun.com/news/fontainebleau/

      The other is the  Echelon on the site of the former Stardust.
      http://www.vegastodayandtomorrow.com/echelon_place.htm
      I bet the owners on these two Casinos thought they could borrow their way into profits. Now one is bankrupt and the other is a wait and see.

      Obama has talked shit about Vegas twice in the last year. First time he really hurt Vegas a lot. He needs to shut his mouth up already. I heard our Mayor on the radio recently talking about Obama and he wasn't very happy about the chosen one's words. Vegas is hurting enough as it is with its #1 foreclosure rate in the usa.

      Obama's spending spree is going to cripple our dollar. sad

      1. LiamBean profile image89
        LiamBeanposted 6 years ago in reply to this

        Our beloved dollar was crippled long before either Bush or Obama took office.

  13. 0
    jerrylposted 6 years ago

    Harvey,  I have posted several times in the last hour, including
    a reply to your 2nd post.  please respond.

    Thanks for starting this thread, it's a dandy.

    Jerryl

    1. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      jerryl,

      I posted.

      1. 0
        jerrylposted 6 years ago in reply to this

        Harvey,  Got it

  14. MikeNV profile image76
    MikeNVposted 6 years ago

    Your point is completely lost on people who do not understand how Fractional Reserve Banking works.

    There is no such thing as sustainable perpetual growth nor is there such a thing a sustainable perpetual debt.

    The system is very broken World Wide.  The World's economy is tied to Central Banks and Fractional Reserve banking.  The whole system is useless.  There is no reason to borrow to live.  It's creation does nothing more than redirect the prosperity of the masses to a select few who created and control the system.

    The masses unfortunately do not understand how it works so they continue to feed the fraud.

    1. 0
      jerrylposted 6 years ago in reply to this

      Mike, you are absolutely correct.  That is why aboiut 80% of the wealth in this nation is owned by about 5% of the people.

      We cannot quit trying to teach the masses however.  Most have been so brainwashed that they cannot think of money in any other ways except debt.

      What a job the bankers did on the people.  We have all been the victims of fraud by deception for our entire lives

      Then we have the gold bugs.  They have evidently not studied how this fractional banking system started. 

      It was the goldsmiths that started banking and issuing gold certificates.  When they found out that not all of the depositors would withdraw all their gold at the same times, they started loaning out more gold certificates than they had gold to back.

      Gold can be manipulated.  We would need something other than gold coin to facilitate trade, and paper or electronic transfer would be the most convenient. 

      In truth, it really doesn't matter so much what we use for money.  What really matters is how it is created and more importantly, how it enters into circulation.

      Jerryl

    2. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      Mike,

      I agree with you about the public. At 60 years of age I have realized how politically ignorant most of my friends are. They are all college grads, most with Masters and a couple of PhD's. They say they aren't interested enough to follow thing so closely.

      I ask them to just listen to me and the answer is; I don't want to talk politics. All are financially stable and choose not to worry.

      1. Harvey Stelman profile image60
        Harvey Stelmanposted 6 years ago in reply to this

        AMERICA,

        Please wake-up! Before you chose a side of any issue, look at both sides. Check if any solution has been tried before; has it's outcome been good or bad?

        Everyone now hates bankers. See what J.P. Morgan (the founder) did in 1907 to save Americas monitary system. Look up, Progressive Politics; and how it has never worked, even in America.

        My mind was blown away with this knowledge, yours will too.

        1. Flightkeeper profile image80
          Flightkeeperposted 6 years ago in reply to this

          I can't stand how the Obama administration scapegoats the banking industry, capitalism, corporations -- in effect all the things we need in order to get out of this mess.  He's clueless about making money.

  15. tony0724 profile image59
    tony0724posted 6 years ago

    To answer your question , If Big Govt. is willing to bankroll me I will try to spend my way out of a recession !Just to see if it will work.

  16. theirishobserver. profile image61
    theirishobserver.posted 6 years ago

    The Irish Government are trying to spend their way out of debt but the hole is getting so deep even Captain Nemo wont be able to get down to them smile

  17. Sab Oh profile image61
    Sab Ohposted 6 years ago

    I think the key part of 'spending your way out of debt' is the ability to take everyone else's money at will.

  18. Will Apse profile image90
    Will Apseposted 6 years ago

    I don't think people generally realize how volatile our economies are. A few months of contraction and any economy is in recession- to be followed very quickly by depression.

    Depression means mass job losses, hunger, social dislocation, massive spikes in crime, the rise of extreme political parties, revolutions and war. Not all at once, of course and not in every country but you get the picture.

    Every country in the world used stimulus packages to stave off the nightmare scenario that was rushing our way last year. We aren't out of danger yet but if it hadn't been for the Keynsian kiss of life. a lot of us would be sleeping in a ditch tonight.

    1. Sab Oh profile image61
      Sab Ohposted 6 years ago in reply to this

      "A few months of contraction and any economy is in recession"

      Well, a bit longer than that.

      1. Will Apse profile image90
        Will Apseposted 6 years ago in reply to this

        Two quarters of contraction is widely accepted as a recession.

        1. Sab Oh profile image61
          Sab Ohposted 6 years ago in reply to this

          That's more than a few months

    2. Misha profile image76
      Mishaposted 6 years ago in reply to this

      World is slightly bigger than Western civilization. smile

    3. ledefensetech profile image80
      ledefensetechposted 6 years ago in reply to this

      Totally wrong.  Wait until we start to see price spikes due to the increase in monetary supply that our government used to pay for the so-called "stimulus package".  The "Keynesian kiss of life" as you call it will feel more like a kiss of death.

      Those Keynesian supports haven't even been removed yet and we've continued to see increases in unemployment even with the stimulus.  So, in the real world, things have been much worse than the policy idiots in Washington have dared to think.  When those supports are taken away, not only will we deal with the price spikes due to inflation, the stimulus will not have had any appreciable effect on much of anything other than to line the pockets of the politically connected.

      1. Misha profile image76
        Mishaposted 6 years ago in reply to this

        I still maintain we are bound for serious deflation first. And looks like it just started - I am loving gold, oil, and stocks all moving down together smile

        1. ledefensetech profile image80
          ledefensetechposted 6 years ago in reply to this

          Of course we're seeing deflation.  We're still deleverageing from the insane bubble days.  We have how many months of new build housing inventory?  Until those are liquidated, we'll continue to see deflationary movements as the markets move back towards equilibrium. 

          But the President has tripled the amount of money in circulation over the last year.  That will have an effect and it will be catastrophic.  I'm concerned that the massive increase over such a short period of time will trigger hyperinflation once the ball gets rolling.

          Remember when I said that once we start to see real indicators of recovery, that's when we'll see price increases due to inflation?  We have yet to see real indicators of recovery yet.  Still it wouldn't be a bad idea to invest in commodities, especially as demand has softened for them lately.  I'll bet there are some real bargains there.

          1. Misha profile image76
            Mishaposted 6 years ago in reply to this

            I just took a look at CRB - and sure, let me sell you some! wink

            As for the money thrown into economy - all is true. The thing I think compensates for this is a huge drop in available credit, obviously bigger than all the money printed so far. Not sure when later overcomes former, but this is exactly the point when we will start seeing inflation and then likely hyper inflation. Not there yet for sure, not even close. smile

            1. ledefensetech profile image80
              ledefensetechposted 6 years ago in reply to this

              I've given up on trying to figure out when it's going to happen.  Now I know how Jehovah's Witnesses feel when the date for apocalypse has come and gone.  The best we can do is say it will happen, we're just not sure when.

        2. Harvey Stelman profile image60
          Harvey Stelmanposted 6 years ago in reply to this

          Misha,

          The economic problems are so much more than any of us can imagine. We probably have 20% unemployment now and more is coming.

          We used to be such a great country. We're now back to the Progressive movement of the early 1900's. The difference is that now we have history to look back on, they didn't.

  19. Aya Katz profile image88
    Aya Katzposted 6 years ago

    Misha, deflation? What are you basing that on?

  20. Misha profile image76
    Mishaposted 6 years ago

    Charts, as I added above smile

  21. Aya Katz profile image88
    Aya Katzposted 6 years ago

    I haven't noticed any deflation at the grocery store yet.

    1. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      Aya,

      Deflation has not started yet. First we willhave more inflation, loss of more jobs and the dollar may no longer be the standard.

  22. Misha profile image76
    Mishaposted 6 years ago

    Me too. But looks like we should, and pretty soon smile

  23. someonewhoknows profile image28
    someonewhoknowsposted 6 years ago

    All of us are responsable for letting them get away with it by not "whinning" enough as some congressmen say we do to much of.

    1. Harvey Stelman profile image60
      Harvey Stelmanposted 6 years ago in reply to this

      some,

      That's what the Tea Party is doing, and they are chastized for everything.

      1. LiamBean profile image89
        LiamBeanposted 6 years ago in reply to this

        No, they are chastised for picking the wrong fights. But that's about what I expect of what one pundit called "the tea baggers."

        In truth the tea-party movement is focused on the "errors" of Obama while wholly ignoring Bush missteps and almost a century of stupid economic decisions that both parties are responsible for.

        And both parties are no less culpable than the corporate and business interests that insisted on "cushy" deals and "favorable" economic advantages for the sake of the bottom line. A bottom line that focuses profits for a narrow range of Americans while ignoring everyone else.

        Our economy is based on ... nothing. Our economy is dependent, entirely dependent, on circular credit. Few things of actual lasting worth are made here and entirely too much of our GDP is based on promises to pay. Promises that can only be broken when the house-of-cards we've built comes crashing down.

        1. 0
          jerrylposted 6 years ago in reply to this

          Liambean,  Excellent post.  I truly believe that TPTB have the public buffaloed.  They have them bickering over which politician or party is to blame for everything, when in reality, both parties seem to me to be in cahoots.  They are all following orders from the unseen government.

          I call it gladiator games.

          Just my thoughts

          Jerryl

  24. 0
    jerrylposted 6 years ago

    Why is is so hard for people posting on this thread, to understand that, you cannot pay you way out of debt, without
    capturing the debt principle of someone else's loan, through
    commerce? Under this system, there has to be debt for money to exist.

    That means capturing their debt dollars by having your own productivity rewarded on the job,so you can pay off your debt.

    This money wouldn't exist unless your employer captured it by selling a product or service to those people who borrowed.

    If you have no debt yourself, investing money wouldn't be possible unless you capture someone else's debt dollars that have been spent into circulation. This is the only way that the money for your investments could exist, unless you borrowed it yourself.

    When you gain enough money through investments to pay off your debts, you are actually just transfering your debts to someone else.  This is evidenced by the disparity in the spread between the amount of our total indebtedness as a nation, and the total amount of debt dollars currently in circulation.

    If this was a wealth monetary system, money would be the vehicle of final payment.  However, under this debt system, you cannot pay debt without there being more indebtedness to someone.

    When government and businesses borrow, they do not pay their loans off.  They transfer that indebtedness to you and I in the form of higher taxes and higher prices for goods and/or services, which means a higher cost of living, which is the highest tax of all.

    You are never totally out of debt because of the variety of taxes you must pay each year, to keep this government operating.

    Because of this debt system, you never totally own your own home. You must pay property taxes every year.  If not, the government can put a lien on that property, and eventually force you to sell. If you manage to sell your home, soneone most likely had to borrow the money to buy it from you, or was fortunate enough to have captured enough of someone else's debt principle that was spent into circulation, to pay you cash

    In order to understand this complex system of fraud by deception, one must always think about the origin on the money in circulation, how it functions and how it is extinguished, and replaced. You cannot pay debt with debt. You can only transfer your indebtedness to someone else. Debt dollars cannot be the final payment.  Only wealth dollars can, because they are created by rewarding man's current productivity.
    Debt dollars are created through mortgaging man's future productivity when he signs a mortgage or loan agreement.

    So, how do you pay your way out of debt without you or someone else borrowing money? Where would the money come from?

    Comments?

    Jerryl

    1. EmpressFelicity profile image83
      EmpressFelicityposted 6 years ago in reply to this

      So in a nutshell what you're saying is:

      Debt money system = fractional reserve system
      Wealth money system = full reserve system (whether gold-backed or not).

      Or is there something I'm missing?

      1. 0
        jerrylposted 6 years ago in reply to this

        Felicity,  There was once a time we created wealth money. It had nothing to do with reserves at all.

        Back in the gold rush days, a person could mine or pan for gold. then have that gold assayed , melted down and stamped into coin, free of charge. Money was created without borrowing, or the need for a reserve.
        Man was being rewarded for his current productivity.

        The notion that gold actually backed our dollars is untrue.  what really backed our currency back then, was man's productivity.  Gold was only the symbol of that productivity.  Gold and silver in the ground are worth nothing until man's labor in conjunction with the natural resources, brings that gold or silver out of the ground through his productivity.

        Today, it is still man's productivity that backs or dollars.  However, it is man's future productivity.  This is becouse we have to go into debt in order to have a medium of exchange. Money today is created through the extension of credit from private commercial banks or other debt instruments.

        It doesn;t matter what we use for money.  It's the principles under which money is created, and how it gets into circulation that matters.

        The need to have a reserve, is to supposedly guarantee the payment of debt, is it not?  The reserve requirement of the bankers does not totally cover all debt.  They can loan out 10 to 1.

        A wealth money system does not have to be backed by gold or silver.
        Under a wealth monetary system, the money would be earned first, then spent into circulation, debt free, interest free. 

        I have stated before, that there is a way to create wealth money.

        The constitution says that congress has the power to coin money, and to build post roads.  In other words, (BUILD INFRASTRUCTURE).

        By combining these two powers, congress could pass laws that would
        allow the treasury, under orders from the various states to create the monies needed to fund necessary infrastructure projects in those respective states.  The competitive bidding process would determine the adtual amount of money to be created for any project. 

        The monies created, need not be actual coin or currency, but could be created as electronic transfer, or book entry money.

        I choose the infrastructure as the vehicle for money creation, because everyone benefits from it.

        The money created in this manner, would be spent into circulation as payment for infrastructure.  It would not be borrowed through bonding.
        Congress can pass these laws.  They passed the laws that gave the federal reserve control over our monetary system, didn't they?

        Money created as wealth, doesn't have to be paid back to anyone, and lives on.

        Money created as debt, has to be paid back to the bankers, and erased.
        However, there was never any money created to pay the interest on any borrowed money, so we have always created a debt greater than the debt money supply created.

        Why would we need a reserve if man's productivity created the money?
        How would there be inflation if each dollar created, was matched with productivity.  Maintaining our infrastructure would eat up a lot of any excess, as would paying for our military, repaying social security, etc..

        Creation of money in this manner, would alleviate the need for any road use taxes of fuel taxes.  This would lower the cost of shipping products
        across this nation.  In turn, the cost of manufacturing would drop, as would the prices to the consumer, through competition.

        We could pay for any mass transit systems, which would reduce our reliance on foreign oil.

        We would not cut the fed res off at the knees.  While the new money was gaining in strength, the congress could place gradually increasing reserve requirements on the bankers until the new wealth money was capable to handle the nations monetary needs.  Then we could get rid of the fed res.  There would be no noticeable difference in the transformation to a new system, because the new money created would
        be in the form of electronic transfer or book entry.

        Does that help?

        Jerryl

        1. EmpressFelicity profile image83
          EmpressFelicityposted 6 years ago in reply to this

          I suspect you're right about it not mattering what we use for money.




          Yes, I know.  Without being an expert in the subject (but having read a couple of books by people like Murray Rothbard), my impression is that the fractional reserve system is to a large extent responsible for the problems we're seeing today.  That, coupled with people's eagerness to borrow money, which in turn is whipped up by the media (e.g. the plethora of TV programmes about buying property).




          It explains where you're coming from, yes. 

          Although I think you're going to have trouble finding any politicians with the gumption to get rid of the Federal Reserve - whether or not it's a gradual process.  (Put it this way, the chances of it happening in the US are probably about the same as the chances of one of our political parties adding "Oh, and by the way we're going to get rid of the Bank of England" to its manifesto.  Slim to none.)

          Would you have any sort of central bank in your system?  Or banking regulations of any kind?  Or bail-outs/compensation schemes for failed banks?

          1. 0
            jerrylposted 6 years ago in reply to this

            Felicity,  The fractional reserve system is the reason for all of these problems.  The slow gradual killing of America's prosperity through the application of usury interest that no money is created to pay, is the culprit.

            It took many decades to get us into this much debt.  There is no other way out, other than converting to a wealth system.

            I don't think that people want to borrow.  They would much rather have the ability to save enough money to save for their purchases.  This system makes it impossible for the majority.

            What ever happened with rent with option to buy?  Contract for deed?
            I remember a time when people could save money to buy property, put in a basement and well and septic system.  Then they could live in that basement until they could afford to frame up their house, withoiut borrowing.  Laws were passed to force people to have new home construction completed in a minimum period of time.  This then, forced people to borrow if they wanted a house, without waiting.
            I would have no doubts that the bankers were in full support of such laws being passed.

            I also remember people buying cars and making payments to the dealer.

            I realize that getting legislators to take action on this is an uphill battle.
            The bankers lobby is very powerful, and contributes to many reelection campaigns. We can only educate as many people as possible, and hope they will put pressure on the congress. It is hard however, because of the media control.  Eventually however,  I think there will come a time when even the bought and paid for legislators will realize that they have no choice but to change,  I can only hope it is not too late.

            The time will come when just servicing the interest on total debt will surpass total gross consumer income.  People will feed families rather than pay taxes.  The government will not be able to honor contracts.  The stock market will crash, and take with it, IRA's, 401K's and pension plans.
            Interest on borrowed money is the only thing that I know of that grows 24 hours a day, 365 days a year!  Do you see any other ending for this debt system?

            If a wealth system was adopted, banks would have to go back to a fee for service type of business.  They would not be able to create money out of thin air, (ON YOUR PROMISE TO PAY), as they do now.

            Once a wealth system really took hold, I have no doubt that people would find that their taxes would eventually come down, as well as their cost of living. We would be more able to compete in the world markets. Our trade deficits would gradually drop. 

            I truly believe that people would be able to actually save for their own retirement.  The family would have more quality time together, which would improve the moral fiber of society. 

            I would challenge people to make a list of all of the negatives and positives of our current debt system, and then another list for a wealth system.  They would see that we have nothing to lose, and everything to gain through change.

            Jerryl

  25. PAPA-BEAR profile image60
    PAPA-BEARposted 6 years ago

    To spend your way out of debt indicates that the spender is making a profit. point one....You have to be spending on a good return, not the failed old order.  point two.....Debt does not go away simply because people buy, that only keeps afloat, a new inovation or skill base. i.e man is poor, writes good book, believes in it invest in self publishing and promotes it. Book takes off big time. Spent his way out of debt.

    1. 0
      jerrylposted 6 years ago in reply to this

      Papabear,  Man is poor, writes good book, believes in it, invests in it and promotes it. Book takes off big time.  Spent his way out of debt.

      Where did he get the money to self publish and promote his book?

      You can bet your bippy, he had to have captured some of the debt principle of someone's loan that had been spent into circulation, otherwise, the money he used to accomplish this feat, would not have existed.  In essence, he was actually transferring his indebtedness onto others.  Someone had to buy his books, and that had to be with debt dollars also.

      I don't understand why people can't understand that you cannot pay debt with debt.  Debt is all we use for money.

      Jerryl

      1. LiamBean profile image89
        LiamBeanposted 6 years ago in reply to this

        If you have ten or twenty dollars in your pocket and you buy a book where exactly are the 'debt dollars' coming from.

        Your example makes NO SENSE!

        1. 0
          jerrylposted 6 years ago in reply to this

          LiamBean,

          I wrote to the treasury and asked, "How is money created, and how does it get into circulation?

          The answer received from Russell Munk, Asst. general counsel of the U.S. treasury was,   "The actual creation of money, always involves the extension of credit from private commercial banks".

          I then wrote and asked,  "If all money is created as loans, where does the money to pay the interest on those loans come from?"

          His answer was,  " The money to pay the interest on all loans comes from the same source as all other money".

          Now Liam,  If all money is debt, that would include the money in your pocket.  If you have money in that pocket, in a checking or savings account, or in stocks or bonds, someone would have to have an equal amount of debt, either individually or collectively.

          Money has to have an origin.  You didn't always have it, and neither did the boss that you get your paycheck from.  It has to begin somewhere.

          If you have no debt, but have money, you couldn't possible have that money, unless someone else had borrowed and spent that borrowed money into circulation, making it available to your boss, or you co capture through commerce.

          There is also the difference between wealth and money.  You cannot spend wealth until it is converted into money.  The only way to do that is to sell some of your wealth, (and if the amount is large enough), the person buying that wealth would probably have to borrow from a bank to do it.

          The second way to convert wealth to money is to use your wealth as collateral, and borrow against it.  Again, the bankers get involved.

          Does that explain it?

          Jerryl

          1. LiamBean profile image89
            LiamBeanposted 6 years ago in reply to this

            Preaching to the choir here jeryl. Read back; I've basically been saying the same thing.

            1. 0
              jerrylposted 6 years ago in reply to this

              Liam, Sorry if I misread your post, it appeared to me that you were asking me a question. 

              Keep posting.

              Jerryl

  26. Ralph Deeds profile image69
    Ralph Deedsposted 6 years ago

    Here's a little economics lesson on deficits and debt from N. Gregory Mankiw an orthodox GOP economist who was chairman of George W. Bush's Council of Economic Advisers:

    "Let’s start with the definition of fiscal responsibility. What should the budget numbers look like before one gives them the Good Economist’s Seal of Approval?

    "It may be tempting to assume that a balanced budget is the natural benchmark. Certainly, the Obama budget comes nowhere close to achieving that goal. But there are reasons to think that this standard is far too strict.

    "Sometimes, a budget deficit, even a large one, is called for. War and recession are the two classic cases. Wars lead to temporary surges in government spending, and recessions lead to temporary declines in government revenue. It makes sense for the government to borrow to make it through these tough times.

    "President Obama, like his immediate predecessor, is dealing with both war and recession. A transitory surge in the government’s budget deficit is natural under these circumstances and need not be a cause for alarm.

    "Moreover, even in the long run, a balanced budget is too strict a standard. Because of technological progress, population growth and inflation, the nation’s income and tax base grows over time. If the government’s debts grow at or below that pace, servicing the debt will not become a major problem. That means the government can run budget deficits in perpetuity, as long as they are not too large.

    "Recent history illustrates this principle. From 2005 to 2007, before the recession and financial crisis, the federal government ran budget deficits, but they averaged less than 2 percent of gross domestic product. Because this borrowing was moderate in magnitude and the economy was growing at about its normal rate, the federal debt held by the public fell from 36.8 percent of gross domestic product at the end of the 2004 fiscal year to 36.2 percent three years later.

    "That is, despite substantial wartime spending during this period, budget deficits were small enough to keep the debt-to-G.D.P. ratio under control."

    NY Times 2-14-10

    1. 0
      jerrylposted 6 years ago in reply to this

      Ralph,  Gross domestic product is not money, and does not pay down debt.  Only money does.   The value opf GDP is only perceived value until it is actually sold, then the value is realized.  Only a portion of that realized value is coming into the government in the form of tax revenues, and those tax revenues are in the form of debt dollars, whether cooin, currency or electronic transfer.

      Comparing the perceived value of GDP against our indebtedness is not
      an acurate gage of our ability to keep pace with our debts.

      Technological growth does not increase the money supply, now does population growth.  The only thing that increases the debt money supply,
      is more borrowing.  If there is interest on that borrowing, then we create a debt greater than the debt money supply created.

      The is a difference between wealth and money.  You cannot spend wealth, until you convert it into money.

      If GDP were able to alleviate some of our indebtedness, why hasn't our debt come down?

      If you believe there is a way for this to be accomplished under our current monetary system, please elaborate.  I would like to know how GDP could pay down debt.  Maybe the government is counting on the spread between the GDP and debt to be a positive, and counts on the people believing that it can actually pay down debt.

      Figures don't lie, but liars figure.  I truly believe that if you asked most
      so-called economists how money is created and how it enters circulation, they wouldn't know the answer.  My friends and I have debated  economics professors, and found this to be true.

      I wouldn't count of the media to be unbiased either. We have tried to get several articles on the monetary system published in the papers, but they wouldn't touch the subject.

      Coments?

      Jerryl

      1. Ralph Deeds profile image69
        Ralph Deedsposted 6 years ago in reply to this

        Well, the economists seem to think the key figure to watch or worry about is national debt as a percentage of GDP. This is the best indicator of whether the debt is manageable or out of control. As GDP rises, assuming tax rates stay the same, government tax revenues increase and so does the country's ability to service the debt.

        U.S. national debt will soon be getting to the worrisome point in the absence of some bold steps as we come out of the recession. Ending the wars would help a lot as would "bending the curve" of rising health care costs.

        1. 0
          jerrylposted 6 years ago in reply to this

          Ralph,  Has the government ever been able to control our indebtedness?

          How many more trillions in debt must we accumulate before they realize that this fractional banking debt monetary system has never worked?

          We have done nothing but go deeper and deeper in debt.  If it was possible to pay down debt uinder this system, why hasn't it occured?

          The reason is that it is an impossibility.

          Jerryl

      2. LiamBean profile image89
        LiamBeanposted 6 years ago in reply to this

        Money is a construct. It only has value if the person who issues it says its worth something and you believe them.

        Gold is based on a similar value system. It is only worth what it is because so many "believe" in it's value.

        Still, this is far better than money that is backed by a promise to repay, from a promise to repay, based on yet another promise to repay. Only one foundation footing need be lost for the entire structure to collapse.

        1. 0
          jerrylposted 6 years ago in reply to this

          Liam,  Paper, electronic transfer, or gold.  What matters most about money is how it gets into circulation, not what we use for money.

          If we borrow and spend it into circulation, it is debt, and must be paid back and erased off the books.  No money is created to pay the interest on any loan.  That means that others must borrow and spend into circulation, in order for money to exist for you to capture to pay the
          interest to the bankers.

          If we earn it first, then spend it in, it is wealth.
          It doesn't have to be paid back to anyone, and carries no interest debt.  Therefore, it lives on indefinitely.

          Money, if nothing else, should be final payment of indebtedness.
          That can only be accomplished within a wealth monetary system.

          Gold is not the answer.  There is not enough of it.  Gold was also manipulated by the goldsmiths.  That is how this fractional banking debt monetary system got started.  The goldsmiths realized that not all depositors would draw their gold out at the same time, and began loaning out more gold certificates than they had gold to back.

          Jerryl

          1. LiamBean profile image89
            LiamBeanposted 6 years ago in reply to this

            That philosophy means the money is still backed by credit, upon credit upon credit. I disagree. The money does not have the value. The object or service you buy with it does.



            You've just given the perfect description of the problem. The money, as you describe it, has no intrinsic value. This is the problem; not the solution.



            Wealth is the retention of value, not the spending of it.



            Now you sound like a quack scientist.



            If there's not enough of it then it's value should increase.



            So are diamonds, pearls, and any other luxury item you care to name.



            In other words they guaranteed the certificate without actually having anything to back it with. Sounds familiar somehow.

            Sarcasm intended.

            This is precisely how we got into the current mess. Building institutions and wealth upon promises to repay. And what happens when the promises cannot be kept?

            Look around; you are witnessing it.

            1. 0
              jerrylposted 6 years ago in reply to this

              Liam,  Intended sarcasm noted.  You are correct, wealth is the retention of value.

              After reading your last post, I don't think you look at this discussion the same way I do.  You and I are not only speaking to each other, but we are also putting out our opinions for others to take in.
              My references to the difference between wealth and money was also for the benefit of those following this thread, who do not understand the difference.

              Under our current system, how do you measure that wealth?
              Isn't it measured by how many debt dollars it is worth?  Why is it that many  people cannot retain the wealth in the equity of their homes?
              Is it because they are living beyond their means?  Is it because their wages have not kept up with the cost of living?  Is it because this debt system has forced corporate America to constantly look for ways to cut expenses, in order to compete on the international markets?
              How long will the store of wealth last when a person has lost his job?

              What other value besides being a store of wealth does gold provide?

              You certainly cannot take a nugget to the grocery store to buy groceries.
              The grocer is not equiped to determine the value of gold at any given moment, nor is any other commercial outlet.

              If we did make gold our money, we would have to raise the value of gold to maybe $10,000 or more per ounce. The bulk of the wealth would once again flow to the wealthiest, leaving the masses no better off.

              We couldn't use it as coins,
              A one dollar coin would be less in size than a grain of sand.
              What medium of exchange would you propose we use, that would be backed by gold? Something uncorruptable.

              Gold certificates, (paper), were manipulated in the past.

              We both know this debt system has to go.
              In order to exchange that gold for our current  medium of exchange, doesn't someone have to have enough debt to match the amount of
              gold you would want to exchange?

              Just how long, under this debt monetary system do you think it would take before the bankers would own all of the gold?  What then?

              Jerryl

              1. EmpressFelicity profile image83
                EmpressFelicityposted 6 years ago in reply to this

                Why?

                (Again, maybe I'm missing something really obvious here.)

                1. 0
                  jerrylposted 6 years ago in reply to this

                  Felicity,   Why what?

                  1. EmpressFelicity profile image83
                    EmpressFelicityposted 6 years ago in reply to this

                    Why would we have to raise the value of gold to $10,000 or more per ounce if we made gold our money?

      3. Ralph Deeds profile image69
        Ralph Deedsposted 6 years ago in reply to this

        The ability of the U.S. to repay its debt and the value of its currency depend on the growth and health of our economy and the taxes collected from corporations and citizens. As long as our government is stable and our economy is growing faster than our debt, the value of our currency and credit will be maintained. If we continue to spend at the current rate and don't raise taxes we will reach a point where we will be overwhelmed by our national debt.

        1. 0
          jerrylposted 6 years ago in reply to this

          Ralph,  The problem is that we do not pay down debt.  We just service the interest on the debt.   Many people are already put  in the position of not being able to borrow from the bankers.
          They owe more on their mortgage than their home is worth.
          When we can't borrow, we don't create any debt dollars.
          Without credit, people do not spend.  When they do not spend, the economy tanks, and less revenues are taken in.
          How much longer do you think it will be before the debt takes us down?

          Jerryl

          1. Ralph Deeds profile image69
            Ralph Deedsposted 6 years ago in reply to this

            Seems to me you're mixing up the issue of the national debt and the banks' reluctance to lend except to the least risky individuals and businesses. I'm not sure why the banks are being so cautious except that the economic outlook remains uncertain. The Federal Reserve has lowered the discount rate to zero, but the banks are still not lending as much as would be desirable. Some have likened the lack of response to the Fed "pushing on a string."

            Wrt the national debt, it's true that we increasing the national debt, not paying it down. The reason for that is that paying it down before we are out of the recession would probably cause a double dip recession. The time to start paying down the national debt, either by cutting programs and services or raising taxes, or a bit of both, is when we are sure the economy is on the road to recovery. In the meantime the debt will continue to go up.

            1. 0
              jerrylposted 6 years ago in reply to this

              Ralph, In regards to paying down the national debt,  Where is the money going to come from to accomplish this feat? 

              All money is created through loans from banks or through other debt instruments. I repeat (LOANS AND OTHER DEBT INSTRUMENTS).

              Plus no money is created to pay the interest on that debt!

              We carry trade deficits with other nations.  So again, where will that money come from?

              Please give me a detailed explanation.

              I am not getting things mixed up.  If borrowing ceases, the system collapses.  Government borrowing is probably the largest contributer
              to keeping this debt system alive.  Congress is always raising our debt ceiling.  The government can only make so many cuts in the budget, and our businesses are moving our manufacturing base out of the country.

              We have many people out of work, or working less hours or less wages.
              This means less revenues collected also. 

              We are trillions in debt to foreign countries. We have had to bail out the banks.  That debt goes on to the backs of the people.

              You must know of some other way that money is created and gets into circulation.  I would like to hear how it is done.

              The treasury and the federal have told me that money is created as I related above.  I have letters from them to prove what I am saying.

              I still cannot see how you think we can pay down our national debt with debt dollars, or without borrowing under this system.

              Please elaborate.

              Jerryl

              1. Ralph Deeds profile image69
                Ralph Deedsposted 6 years ago in reply to this

                The money to pay down the debt will come from taxes paid by individuals and corporations. The money supply is controlled by the Federal Reserve principally through what are called "open market operations, i.e. buying and selling treasury bonds. When it wants to expand the money supply it buys T-bonds and when it wants to reduce the money supply it sells T-Bonds. It also influences the money supply by raising or lowering the interest rate it charges banks for borrowing from the treasury. The money is printed by the U.S. Mint a unit of the Treasury Department.

                http://www.billcara.com/archives/2005/1 … s_the.html

                1. EmpressFelicity profile image83
                  EmpressFelicityposted 6 years ago in reply to this

                  Which teeters along fine until - for whatever reason - people no longer want to buy your T-bonds (or our gilts, for that matter).

                2. 0
                  jerrylposted 6 years ago in reply to this

                  Ralph,  Show me just one time when we paid down any of our national debt since the fed res took over.  Even in good or booming times, we haven't paid anything down on the debt.  We just seviced the interest on
                  the debt.We have so many small businesses that have been forced out of business, I doubt whether we could get back to where we were, in another ten years.

                  Haven't you heard all the talk about China not wanting to buy any more bonds?  When they sell T-bonds, where do you think the debt goes?

                  Money is printed at the bureau of engraving, and coins are stamped at the mint.  While we are talking about printed money, did you know that the fed res pays only about 4 cents per bill, whether it is a one dollar bill, or a hundred dollar bill. 

                  Can't you understand that this system fosters higher and higher cost of living and higher taxes constantly? The ever increasing cost of living is the highest tax of all, and wages never keep up with that cost for the majority. You cannot tax something that people and businesses haven't got.

                  Any gain in the money supply also comes with more debt!  When no money is created to pay the interest on borrowing, we not only cannot pay down our national debt, but we can't even tread water, because we are always creating a debt greater than the debt money supply created.

                  Jerryl

                  1. Ralph Deeds profile image69
                    Ralph Deedsposted 6 years ago in reply to this

                    jerryl, Take a look at this chart:

                    http://zfacts.com/p/318.html

                    As I explained what counts is not the absolute amount of the debt but rather the amount of the debt as a percentage of the country's GDP. Using a personal analogy, someone who earns a million dollars a year might be able to safely borrow $100,000 while someone who ears $100,000 per year would be able to safely borrow much less.

  27. earnestshub profile image87
    earnestshubposted 6 years ago

    Well that all makes sense to me. smile

  28. waynet profile image46
    waynetposted 6 years ago

    Oh I do this all the time, I spend all of my money to get more debts and then just leave town and never come back, it's easy when me and my inflatable doll Mavis are at the casino, we get into debt by gambling our cash and then just change our identities, it's a good combo of cleverness and gambling fun and social intrigue!

  29. 0
    jerrylposted 6 years ago

    Time for a break, talk more tomorrow

    Jerryl

  30. 0
    B.C. BOUTIQUEposted 6 years ago

    yes, you can personally spend your way out of debt..it is called chapter 7 bankruptcy..

    then 7 or 10 years you can do it again, legally.

    ..I do not recommend trying it though...

  31. IntimatEvolution profile image82
    IntimatEvolutionposted 6 years ago

    My bad, guess I am wrong.  Thank you Misha.  Still, I think their are other issues more pressing than our debts.  But I sure others will say that, our debt is the reasoning for everything else.  So that is not a debate I want to mix with.  It is just my consensus that it is not.

    Thank you for your enlightenment.  However, your figures even help make my point.  For them to tackle a debt of that enormous size in the late 1700's, and balance it with in a very few short years........, well I still say our debt is manageable.

  32. Jesusjohn78 profile image60
    Jesusjohn78posted 6 years ago

    if the solution was debt there would be no problem

  33. 0
    Madame Xposted 6 years ago

    "The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements.

    What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed?

    What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government?

    In a word, no great improvement or laudable enterprise can go forward which requires the auspices of a steady system of national policy."

    James Madison

  34. 0
    jerrylposted 6 years ago

    Ralph, After reading your last post, I truly believe that we are on the same page, except I am talking about paying off debt, while you are talking about being able to handle the nations on going debt each year through taxation. You also want to use the debt to GDP idea. 

    After you listed all of the reasons that got us into this mess, I think it is obvious that TPTB completely ignore any figures that may come of the debt to GDP formula.

    I know you want a better economy, just as I do. I am looking for a way to get out of debt, while you are talking about treading water. The debt to GDP doesn't address the problem of eliminating debt, it just lets the crooks know how much they can borrow in our names, to just keep the system barely alive.

    They could care less about your or my children and grandchildren, and the legacy we are leaving them.

    jerryl

  35. JOE BARNETT profile image60
    JOE BARNETTposted 6 years ago

    RALPH- i'm with you. People on the right  have deliberately confused the issue to take the light off  themselves. They are nothing more than disgruntled employees!

  36. 0
    jerrylposted 6 years ago

    4 OF THE MOST IMPORTANT QUOTES IN ECONOMICS


    1. “The actual creation of money always involves the extension of credit from
           Private commercial banks”
           Russell L Munk, Assistant General Counsel, Department of the Treasury


    2.   “Money is created when loans are issued and debts incurred.”
          “ Money is extinguished when loans are repaid.”
             John B Henderson, Senior specialist in price economics, congressional research
              Service report No. 83-125E


    3.       “Thus the money that one borrower uses to pay interest on a loan has been
              created somewhere else in the economy by another loan.”
              John M Yetter  Attorney advisor, Department of the treasury


    4.       “Someone has to borrow every dollar we have in circulation, cash or
                credit.  If the banks create ample synthetic money we prosper; If not, we
                Starve.  We are absolutely without a permanent money system.  When one
                gets  a complete grasp of the picture,  the tragic absurdity of our hopeless
                position is almost incredible. But there it is.  It is the most important subject
                intelligent persons can investigate and reflect upon.”
                Robert H Hemphill, credit manager of the federal reserve bank of Atlanta

    Jerryl

    1. Ralph Deeds profile image69
      Ralph Deedsposted 6 years ago in reply to this

      Our "hopeless" system has been working pretty well for 60 years or so until recently. Do you have a better system in mind? Or are you just in favor of tearing down what we have? How do you feel about the banking reforms currently under consideration in Congress? Did you happen to see that Warren Buffett, John Bogle, Paul Volcker and several others are proposing extensive reforms? Here's a link to a Volker op-ed in the NYT 2-1-10. What do you think?

      http://dealbook.blogs.nytimes.com/2010/ … amp;st=cse

      1. 0
        jerrylposted 6 years ago in reply to this

        Ralph,  Yes our system has worked pretty well for 60 years.  However, that system has gradually put us deeper and deeper into debt.

        These trillions of dollars of indebtedness didn't just happen overnight.

        Yes I have a better system in mind, but the legislators will not stand up to the fed res and the bankers.  Any time we get our bill before the legislators in committee, the bankers lobby comes in and then the legislators table our bill.

        We have toi get back to creating money through being rewarded for our current productivity.  That means earning money then spending it into circulation.  There is no debt, or interest on the creation of money in this manner.

        Currently, we are forced to borrow to have a medium of exchange.  Man's future productivity, under our current system, is what is creating the debt dollars we use today.

        There was a time, before congress gave control of our money to the federal reserve, that congress had the power to coin money and to build post roads.  (infrastructure).

        By combining these two powers, and passing laws, congress could require the treasury to create the necessary monies to maintain and build new infrastructure.  This would be accomplished when communities find a need for a new road, bridge, tunnel or mass transit system, which would benefit the needs of the community and commerce.

        This infrastructure project would be let out by the state involved, for competitive bid, just as is done now.  The state would send that winning bid amount in it's request for the monies.  The treasury could then set up an asset monetization account.  The treasury would debit that amount out of it's accounty, and into the stat transportation account.  The state would in turn, gradually debit that money out of it's account, and into the winning contractors bank account, as the project progressed.

        The contractor would be paying his suppliers for services and products rendered, and the laborers and others involved would earn their money, and spend it into circulation, debt free, interest free. There would be no need for road use taxes, or fuel taxes, as all construction and maintainance would be paid for, (WITHOUT BORROWING).
        Livable wages and full benefits would be mandatory in the bidding process.  We would take millions off of the welfare and unemployment roles. The actual control would be left up to the states.  The only function of the federal government would be to create the money for the projects.
        This money would be created by electronic transfer. Any paper money would have to be United States dollars, not fed res notes.

        I do not see inflation being a problem, as each dollar created would be matched with productivity.  I choose the infrastructure as the vehicle, because everyone benefits from it. 

        We could not cut the federal reserve off at the knees.  As the new money gained in strength, congress could place gradually increasing reserve requirements on the federal reserve and the bankers.  Once the new money gained enough strength to handle our nation's economic needs and obligations, the fed res could be dissolved.

        Banks would have to go back to a fee for service business.  No more creating debt dollars on man's promise to pay, by mortgaging hiw future productivity.  This system would eventually pay down debt and lower taxes and the cost of living.  It would also improve vastly, our ability to compete on the international markets.  Mass transit systems would reduce our reliance on foreign oil.  The possibilities are immense.

        The problem we have, is the power of the bankers lobby, the ignorance of the masses, and their inability to think of money in any other way except through indebtedness.

        People would finally be able to have more expendable money and put away for their own retirement.  This is an uphill battle.  TPTB do not want to lose the power they currently have.  I guess if I was a banker, I would want to lose the power to create debt dollars on someone's promise to pay, and collect interest on something I loaned out that I never had.

        A banker, on a $100,000 mortgage over 30 years, collects almost $200,000 in interest.  What does he do to earn that money?  He does approximately 2 weeks of pre-mortgage paperwork, and sends out monthly statements for 30 years.  Very lucrative.  Remember, no money was created to pay that $200,000 in interest payments to the banker.  It had to come from the debt principle of other peoples indebtedness that had been spent into circulation.  Quite a racket. At the very least, my proposed method of money creation would put money into circulation, to address the interest on debt!

        Jerryl

        1. Shlomo SL Abrin profile image61
          Shlomo SL Abrinposted 6 years ago in reply to this

          Matching value to productivity? Brilliant! Will never happen in the US.

      2. tony0724 profile image59
        tony0724posted 6 years ago in reply to this

        The NY Times is not fit to use for the litter box.

        1. Ralph Deeds profile image69
          Ralph Deedsposted 6 years ago in reply to this

          As usual, Tony, you're long on opinion and short on facts.

          1. LiamBean profile image89
            LiamBeanposted 6 years ago in reply to this

            The day these clowns operate from fact instead of a chicken little fantasy, hell will certainly freeze over.

      3. 0
        jerrylposted 6 years ago in reply to this

        Ralph,  Thanks for the link.  It appears to me that the government is putting up a good front.  They do not want to get rid of the disease, but just treat the symptoms. This way the fed res and the banksters can still keep the public on placebos, while avoiding the use of the medicine that would eliminate the disease! 

        This way, the govt. can appease most of the uninformed sheeple, while not upsetting those greedy corporations represented by the lobbyists, who are the go-betweens that ensure the reelection of the puppet government.

        Until I see any indication that the creation of money is changed from this system which benefits the privileged few at the expense of the masses, I seriously doubt there can be any meaningful change. The system will still create debt dollars as usual, until just servicing the interest debt on those debt dollars, becomes totally unmanageable.

        They have never found a way to remedy this flaw in our current system, and avoid airing the facts before the public, like the plague. Ignore it, it will go away, that's the government's standard operating procedure.

        Ralph,  Try to get into a conversation with some of your legislators on this topic, and see how fast you get the bums rush out of their offices.  YOu will also discover, that most of these elected idiots, have no clue about how this system works. Yet we put them in charge of making decisions on
        how and where to spend our tax dollars.


        Jerryl

  37. tony0724 profile image59
    tony0724posted 6 years ago

    Fact PLAGARISM ! Jayson Blair , Zachary Kouwe , and Maureen Dowd

    1. Ralph Deeds profile image69
      Ralph Deedsposted 6 years ago in reply to this

      Jason Blair was fired and so was the editor who failed to catch his lies. Kouwe has resigned. Maureen Dowd is a respected op-ed writer.

      1. tony0724 profile image59
        tony0724posted 6 years ago in reply to this

        Respected or not she still did it. Like I said the NY Times is worthless. Your statement did not say anything I do not already know. By the way Dowd is respected by few now.

        1. Ralph Deeds profile image69
          Ralph Deedsposted 6 years ago in reply to this

          You mean respected by few Tea Baggers.

          1. tony0724 profile image59
            tony0724posted 6 years ago in reply to this

            Pity , I expected better out of you Ralph. A 7th grader could have came up with that one ! smile

  38. Shlomo SL Abrin profile image61
    Shlomo SL Abrinposted 6 years ago

    Tie all value to actual, real production and the nonsense will end.

    Capitalism, a religion based upon usury and financial engineering, is at the core of the problem.

 
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