Is the US capable of paying off the National Debt?

[zdenek795]

I think USA will attack military its creditors.
Hitler also had big debt and instead of paying off attacked his creditors.

Why to pay off debt if you don't have to.

 

[Zippyjuan]

i don't know why so many people here think it can't be done...willing & able are too different things

could be paid off easy in a matter of 2-3 years...but will it be?? doubtful
no inflation needed, just get rid of the Fed & fiat money. government would have to cut spending automatically

Two to three years? The debt is about three times the 2010 budget. To pay it off in three years you will need some massive tax increases (you could not possibly cut enough to accomplish that by cuts alone).

Getting rid of fiat money does not necessarily mean that the government can no longer borrow if it spends more than it takes in. It is the budget, not what is used for money, that is the problem.

 

[Zippyjuan]

Paying off the debt would be relatively easy. We could eliminate payroll, capital gains, and corporate taxes, greatly simplify and reduce the income tax, and replace all trade quotas and prohibitive tariffs with a single, low, flat tariff on all goods, while at the same time eliminate Social Insecurity, MedicAIDS, Medikkkare, the Departments of Energy, Agriculture, Health and Human Services, Education, and pretty much everything else. The debt would be repaid in a few years.

Let''s take a look at your numbers. Revenue sources for 2008:

Estimated receipts for fiscal year 2008 were $2.66 trillion.

$1.25 trillion - Individual income tax
$927.2 billion - Social Security and other payroll tax
$314.9 billion - Corporate income tax
$68.1 billion - Excise tax
$29.2 billion - Customs duties
$25.7 billion - Estate and gift taxes
$50.7 billion - Other

http://en.wikipedia.org/wiki/United_States_federal_budget,_2008
Eliminate payroll taxes (income taxes are payroll taxes and so is Social Security and Medicaid). Take out corprorate taxes (capital gains is counted as part of income taxes). What you have left is $137 billion dollars for your government. How are you going to get rid of over $10 trillion in debt on income of just $137 billion a year? You have to get rid of the debt first, then you can think about changing your taxes. Interest on the debt alone in 2008 was $261 billion- more than you are taking in. And you have not paid for any part of your government yet.

 

[DamianTV]

Its not possible to pay off the national debt. Period.

YouTube - Money As Debt (1 of 5)

What IS possible, is that we wont be past due on our payments. All that means is that the Fed has received the payment for the total ammt of the National Debt, however, every time we print up some new money, new debt is incurred. So as long as a Private Bank is in charge of printing our money, we will never be out of debt.

What I want to know is who were the (at this time) 12 dipshits who said we CAN pay off the National Debt! If there is any ammt of interest applied to all the money in existence, there can never exist enough money to pay off the entire ammt owed plus interest.

 

[Danke]

What I want to know is who were the (at this time) 12 dipshits who said we CAN pay off the National Debt!

It is a public poll.

Is this the way you people treat everyone? You know, to this day I dont think I have ever seen a case of internet bullying. ... I didnt come to the Ron Paul forums because I wanted to support asshole forum members to be assholes to anyone they encounter, I came because I thought there would be more likeminded people here. Apparently I was wrong.

 

[idiom]

Its not possible to pay off the national debt. Period.

So... if somethings changed, like the Fed went out of existence... and we used sound money.. and one or two other things, you are saying the debt could still never be paid off?

Thats a pretty strong position.

 

[Carole]

The debt will continue to compound and the interest will continue to compound. Today our taxes serve only to pay interest on the debt. What happens when we cannot even pay the interest?

Be reasonable. The debt is beyond control and our country is bankrupt and has been for several decades has it not? We have bankrupted the country several times over. Is not that why they changed the bankruptcy laws so that people could never get out of debt?

There is only one way to resolve the problem. Eliminate the wealth-redistributing FED and fiat money and most all of our elected officials and restore industry and business to this country. Daily we are losing wealth-producing industry and other businesses. That can only end badly.

Then return to sound money principles and sound policy principles, and repeal social legislation. Maybe in a couple of decades, the next two generations behind me can get our country back. My generation will be dead and can do little to help beyond spreading the message.

 

[DamianTV]

So... if somethings changed, like the Fed went out of existence... and we used sound money.. and one or two other things, you are saying the debt could still never be paid off?

Thats a pretty strong position.

If we did somehow get rid of the Fed and replaced what we have right now, not with a system built on a gold standard, or a silver, or platinum, nor on fractional reserve banking methodology, and did in fact replace it with an HONEST money system, we would have a chance.

Think of it this way. You got a big fat leech, about the size of a basketball on your leg, and its drinking so much blood that its killing you, do you leave it there for the benefit of the leech, or kill it and save yourself? The private bank we know as the Federal Reserve is a leech. To get rid of our National Debt, we have to kill the parasite. We arent going to pay it back and save the country or the economy. Its one or the other. To get rid of our National Debt, we do the simple thing and get rid of the people we owe it to.

And yes, that is a pretty strong statement. Considering we had the Revolutionary War over the ability to operate an "honest money system", I'd say some other radical revolutionaries had similar ideas.

Keynseian, Austrian, Brenton Woods, and just about every other form of economics is designed by Bankers for Bankers. Sure they might work for balancing a budget or balancing an economy, but they give the power to the Bankers to control everything that we earn and everything that we own.

The power of the creation of money should lie in the hands of the Government, and the value of the money should lie in the hands of its people.

Anyone want to take a wild guess as to the original quote that I derived my 2nd Great Depression line in my sig from?

 

[Objectivist]

And if not, why are we bothering to try and "help" it?

If so, why are we protesting taxation more than excessive expenditure?

Is who capable?

 

[DamianTV]

Can you explain your question a little better?

 

[Kludge]

I'm not seeing your point, Damian. You seem to be arguing that it's unlikely the US gov't will pay off the national debt (securities), which is not what the question is asking (although poorly worded. I was going to write a post earlier saying that, but didn't want to bump the thread). Certainly debt interest leeches off the US economy, but the creation of wealth should more than make up for it. The Federal Reserve owns less than half of the US gov't's debt. I don't see why the government couldn't cut spending and collect enough taxes to pay $40,000 per person over 10 years or so. It'd take wealth from citizens initially, but then it'd just go back into circulation (probably increasing the value of the dollar due to an increase in confidence) and redistribute the debt so that all citizens aren't responsible for irresponsible spending on behalf of the government.

 

[tangent4ronpaul]

One thing that seems to be missed here is that the birth rate has gone down and SS/Medical costs are going to experience a "baby boomer" bubble, but people last a finite amount of time. So those expenses are going to go up and go back down.

Secondly, I do agree that controlling spending is a key here - we need not only a balanced budget amendment, but one that says paying off interest and then some of the debt has to happen before the government can touch a penny - then it has to live on what's left. A freeze on new fees, taxes, etc. would also be required.

I remember in another thread someone mentioned that there was a clause in the 1933 law that created the fed, said the government could buy it back for $450 Million. I'm probably wrong here, but since the government has been playing games with the Fed being the lender of last resort, wouldn't it going away also cause a lot of that debt to go away? It would certainly be good for the economy, even if not.

Lastly, getting rid of a lot of asinine regulation would be a huge economic booster and make the US more competitive with the rest of the world.

So sure, we could pay off the debt and do it comfortably if we had a game plan over say 30 years. Will those treasonous SOB's on the hill ever do that? - not a snowballs chance in hell!

-t

 

[Aratus]

assuming our gov't survives in its current form for roughly a full century,
our current debts and those of the next decade may be paid off... by then!
anything that totally negates our currrent form of gov't sorta says the big debt
will not be eventually paid off. i am taking a LONG viewpoint & vantagepoint on this

 

[Mordan]

anybody answering no hasn't done his homework

gov debt can always be repaid. just print money to repay it.

 

[krazy kaju]

Let''s take a look at your numbers. Revenue sources for 2008:

http://en.wikipedia.org/wiki/United_States_federal_budget,_2008
Eliminate payroll taxes (income taxes are payroll taxes and so is Social Security and Medicaid). Take out corprorate taxes (capital gains is counted as part of income taxes). What you have left is $137 billion dollars for your government. How are you going to get rid of over $10 trillion in debt on income of just $137 billion a year? You have to get rid of the debt first, then you can think about changing your taxes. Interest on the debt alone in 2008 was $261 billion- more than you are taking in. And you have not paid for any part of your government yet.

Err wrong.

Sorry buddy, the economy is not a vacuum. Money is fungible; lower taxes in one sector means higher revenue in another. No corporate income taxes and no capital gains taxes would explode economic growth and increase wages dramatically, thereby increasing tax revenues. This, along with the elimination of quotas would increase trade, and thereby tariff revenues. Elimination of harmful regulations, like those coming from the EPA, would also increase economic growth and wages. Return to a stable currency would increase economic growth as well.

Within a decade, we could easily grow ourselves out of debt.

 

[Zippyjuan]

Tarrifs work as quotas too in restricting trade. Customs duties in 2008 brought in $29.2 billion for the government. I do not see that raising enough money to pay off $10 trillion over ten years (up from your few years you said earlier which is fine) from increased trade. Exports were $1.3 trillion and imports were $2.9 trillion. http://en.wikipedia.org/wiki/Economy_of_the_United_States To raise $1 trillion a year via import duties would require a 33% rate. That would have a major negative impact on imports. Our total economy is about $14 trillion a year. One trillion a year (roughtly seven percent) taken out of that just to pay off the debt?

How big would the economy have to be to be able to take in an extra $1 trillion a year without changing taxes? Let's assume income tax rates remain the same as they are now. In 2008, the economy was about $14 billion and income tax revenues were $1.2 trillion dollars or nine percent of GNP. If you want to get in another $1 trillion a year from income taxes, you need to raise them to $2.25 trillion a year or eighty percent. That means that you need to "grow" your economy by 80% too to be able to get this much money into the coffers. And this assumes that this revenue is actually applied to the debt and not spent on something else.

You did say to get rid of payroll taxes which includes income taxes and social security taxes. How will your "exploding wages and incomes" raise taxes you have gotten rid of?

If you cut corporate taxes what will they do with the money? Give the workers all of it? Keep it for themselves? Give it to their CEOs or share holders? Corporate taxes raise about $300 billion a year. Would cutting that lead to enough growth to take in over three times that amount via other taxes? I don't see how. As a percent of all corporate earnings, $300 billion is a very small amount and would not likely lead to much increase in corporate investments or higher wages for workers. Microsoft alone took in about $55 billion dollars last year. Walmart about $16 billion.

To get rid of the debt in a decade you have to one way or another have revenues $1 trillion a year higher than your expenses. Or just give every man, woman, and child a bill for $40,000 and tell them they need to pay it off in the next ten years. For comparison, the per capita income is $48,000 in 2008. Which assumes balanced budgets into the future. You have to spend less than you take in. Our current government is incapable of doing that.

 

[Mosheh Thezion]

I say we can pay off the debt... for good... and never have to use it again...

see......> http://ecclesiaorworldfed.blogspot.com/

which is one simple idea to do so... real money is like gold in a vault... well fact is, our nation has tons of gold... in perfect storage.. under ground...

All we need to do is allow the Federal goverment..(not the federal reserve) to go into the mining and energy buisness... not nationalise it... but take a slice.. a big slice, and use those mines to back a new debt free, interest free note, which can be used to back our dollars.

in this way... the notes can never can called in, and no crash can occur, and the notes are converted into commodities slowly over time, as they are dug up.

SO.. we all HAVE faith that the commodities are there... and we know we can dig them up.. and if we did so as a nation, we could have complete faith in the value of our new notes, which could back our old dollars, and re-value all of it.. and free our people of DEBT... FOR GOOD.

-MEMAT

 

[Athan]

And if not, why are we bothering to try and "help" it?

If so, why are we protesting taxation more than excessive expenditure?

Because we like being right and having the reality of the situation prove us right. Its like self gratification just like masturbation. It just feels... so... good...

 

[DamianTV]

I'm not seeing your point, Damian. You seem to be arguing that it's unlikely the US gov't will pay off the national debt (securities), which is not what the question is asking (although poorly worded. I was going to write a post earlier saying that, but didn't want to bump the thread). Certainly debt interest leeches off the US economy, but the creation of wealth should more than make up for it. The Federal Reserve owns less than half of the US gov't's debt. I don't see why the government couldn't cut spending and collect enough taxes to pay $40,000 per person over 10 years or so. It'd take wealth from citizens initially, but then it'd just go back into circulation (probably increasing the value of the dollar due to an increase in confidence) and redistribute the debt so that all citizens aren't responsible for irresponsible spending on behalf of the government.

I'll try to explain it better in a hypthetical situation.

Since all money is created by the Fed, all money comes with interest. I know its not technically exactly accurate, as the US Treasury says they want x ammt of money printed up, then the Fed prints the money and buys Treasury Bonds from the US which "earns interest". Im just simplifying.

$100 is all the money in existence. Money gets printed, with "interest" attached, say its 10%, now $110 is owed. How does one pay back the total debt on $110 if $100 is all the money is in existence? Two answers: #1 you cant. its not possible. #2 Print more money.

This does totally oversimpifly the process as it doesnt even include for fractional banking reserve requirements where $1,111.11 thru fractonal reserve becomes $100,000 thru loans, deposits, loans, deposits, etc. and the way I put it has the Fed expect that 100% of the loan, plus its interest, is to be repaid in the first year without the process of creating new money. But point is this.

#1 It can not be fully paid back. If one introduces fractional reserve banking, maybe, but it basically requires taking out a loan to pay off another loan.

#2 Print more money. Which is inflation, and just devaules our dollar even more. As it stands, our dollar has lost more than 96% of its purchase power since 1913.

Its been obvious what we have been doing. Just print more. The thing is that the "creation of wealth" as you put it very well has to be created as goods. Money doesnt have any value, except the value we place on it. A hamburger itself has value. Not a lot, granted, but it still has value. As a country, we dont produce. Have to come back to this topic in a second tho...

Next problem is exponential growth. Use the $100 economy. And print new money also so it all doesnt have to be paid back. This year, the economy grew by 10%. We think of that as a constant rate. Next year when they tell us the economy grew another 10% we have to remember that it didnt grow 10% of its original value, it grew 10% of its new value. Easy math, but just watch the numbers... $100, $110, $121, $133, $146, $161, $177, $194. $213, $235 So after about 10 years of this, the rate of growth compared to the original value is more than 20%. Linear 10% growth starts off similar but balloons up. $100, $110, $120, $130, $140, $150 ... $200.

Conclusion: exponential growth is not sustainable, and is limited by our goods or resources. Lets take the fishing industry. Economy grows exponentially, and for a time, fishing industry grows exponentially. This year we brought in 10% more fish than last year. It wont be too long before the seas are fished out.

The exponential growth is caused by the original transcation having interest applied and needing more and more money to cover that interest. Today, the leech only takes 1%. That doesnt sound so bad, and most people barely notice. Next year, they take 2%. The following year, they take 4%. Then 8%, then 16%. It wont be long before it takes over 100% Of course thats not a very good real world example. Its not just the interest in a tax, its also the price of inflation. If you look at your income tax and figure you only paid 10% of your income in Income Tax, dont forget to figure in the current inflation rate, right now about 15%, but probably a lot higher, so think of the total tax youre paying as 25%. Now its affecting how much food you can buy.

Heres the thing. We bail out banks. The banks are the source of this problem we have with the economy. But we give them more money. A better solution would be to have more government jobs. The money they print and spend is spent on things of value. Bridges, schools, roads. Etc. Things that have value. If they spend the moeny they create on things that dont have value, like a bank, the banks they loan it to use their fractional reserve powers to continue inflating the money supply, and the dollar that the Govt printed just got devalued immediately because inflation is an increase in the money supply without a matched increase in products.

What we are seeing right now is the fastest way to kickoff hyperinflation.

 

[idiom]

You forget the Government can if it wishes to, borrow from the Fed at a negative interest rate.