"He will put the sheep on his right and the goats on his left."
Matthew 25:33

Thursday, April 9, 2009

US Debt - excellent video - decisions

There is a new web site http://www.stopspendingourfuture.com, with contests and prizes for videos and letters.  I really like the video with the person jumping off the cliff.  The video alone can be seen here.

There are only three ways to deal with the debt we, as a nation, are piling up.
  • Pay it back.
  • Renounce it.
  • Inflate it away.
 The best way is to pay it back. This is the right way to do this, but it is hard to imagine the US Government saying that they will cut spending and raise taxes to give the Chinese and the Saudis their money back.  We would have to run a Federal surplus of $1 Trillion for roughly 11 years to pay back the current debt. This is the right thing to do.  Are you, as a voter, willing to demand it?

The second way is to simply refuse to pay the debt.  Third world countries do this from time to time, and the results are very ugly.  No one will seriously consider this, nor should they.

The third way is for the US Government to print money, which makes each dollar worth less. (inflation)  That is what we are currently doing.  The US Treasury issues Treasury bonds to finance deficit spending and bailouts. The Federal Reserve is busily buying those US Treasury Bonds with new money that they are creating out of thin air.  Third world countries do this too.  Zimbabwe has been doing this in recent years, and you can read about the results here. There are other examples here and here.  Note that there is really no difference between this and renouncing the debt, but this is less honest.  The Federal Reserve refers to this as "Monetizing the debt".

The Federal Reserve is "independent", and is not accountable to Congress or the President.  It operates largely in secret. Congress has periodically asked for information about Fed activities, and the Fed has refused.  More detail can be found here and here.  Ron Paul has introduced HR 1207 to change this.

What path are we going to take as a nation?  Will we take the honest and difficult path of paying our debt, or will we continue to pretend that it will just go away?  Will we demand that the Federal Government stop passing out goodies that we cannot pay for, or will we continue to destroy our children's futures?

Come to the Tea Party.

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