http://www.tax.org/Museum/default.htm
Actually the whole tax.org site is interesting.
No civilization has ever paid all of its debts.
http://www.taxanalysts.com/www/features.nsf/Articles/4A728FD271E49281852575370077BB12?OpenDocument
Well if everybody actually paid off their debt in the U.S. there would be no U.S. dollars in circulation due to dollars are printed and circulated when Treasury bonds are bought. Those paid for Treasury Bonds are bought and interest is owed on them. Impossible to pay the interest unless actual goods, including institutions, are confiscated, in other words, nationalized (happening now). That’s the simple way of putting it. But there’s also pyramid schemes between Federal Reserve and banks so there’s way more loans and credit than actual money to pay any of this off.
Fiat, car company, is a good example of a business that is a fascist and a welfare type business. Fiat is getting Chrysler supposedly. U.S. government is bailing out Chrysler and will be paying Fiat. Fiat also gets money from Italian government. Fiat also is trying to get money from German government. On, and on and on… who knows how much further Fiat will be having governments (taxpayers) paying their electric and water bills.
Isn’t there some amount that is still circulating from the Gold era when the dollar was backed by gold? Am I wrong to assume that there was some amount sitting at the base of credit exapansion before Gold was confiscated? The amount (small as it is) should not be backed by any IOU’s.
If this is correct, then it is should be possible to pay off all the debt. As money is paid off, monetary deflation would simply take place until all debt is paid off. The purchasing power of the dollar would contiueouslly rise until all debt is paid off and we are left with the small original amount that is not linked to any IOU.
Any thoughts?
Back then they dealt in thousands, now the U.S. deals in billions and now even trillions when it comes to capital within the country. For instance, bailouts are well over a trillion dollars now, and back then businesses dealing in the millions was astronomical. Back around pre-1950 or so (can’t remember exact year probably closer to 1935), my uncle was making about 3,000 dollars a year working at the Post Office you can make about $60,000 there now for same type of job. The pyramid scheme used by the Fed. Reserve, the ratio amount the Fed. allows banks to pyramid off the money the Fed. ‘printed’ by buying IOU’s is huge in and of itself. A bank can pyramid off the Fed.'s $1000 and if the ratio is 20:1 (I don’t know what it currently is), then the individual bank can loan out $20,000 to the actual $1,000 dollars the Fed. printed. And most individual banks deal in the 10’s of thousands, 100’s of thousands. That money from the past is insignificant statistically. For instance GDP in U.S. was ca. 300 billion. In 1980 it was almost 6.4 trillion. That’s just GDP, that’s not counting loans, credit, etc… And before Federal Reserve time all money was not backed by gold. Fractional Reserve banking was abundantly used.
Perhaps it is statistically insignificant today, but after the monetary deflation due to our hypothetical situation of paying off all the debt, it would become very significant. What is wrong with an average wage of about $500, a new car for about $200, and a movie ticket for about 20 cents? Remember also that nobody said that a penny has to be the smallest unit. If the demand arises, new coins can be issued that are smaller like 1/1000 of a dollar.
My point was simply that the popular assertion that the debt can never be paid back due to “money disaperaing from the system” seem to be a fallacy, as long as there is some amount (perhaps in the tens of billions) that is not linked to any IOU.
In fact, as long as there is any amount not backed by an IOU, it would seem inconsistent with Austrian theory to make such an assertion.
Ok, but all money now is backed by IOU’s. And before the Federal Reserve fractional reserve banking was abundant, but you could go and get a dollar for gold then. Yet, with fractional reserve banking before the Fed, people still couldn’t cash in dollar for gold in total, meaning all money in circulation was being backed by gold or silver - it wasn’t. Unless you have numbers to show how much influences today, but from what I see those influences are insignificant compared to today’s and even pre-Fed. Reserve usage of IOU’s.
Don’t forget credit cards either. This U.S. is in debt way past the water line. It’s in a flooded debt.
The monetary bubble is the biggest bubble there is. The housing bubble was a flea compared to it. Why couldn’t all the investment firms, the banks, the businesses, and the consumers pay out of the housing bubble? What capital is here? Hardly none. Government had to step in and print their way out of this debt hole. This is an explanation of bubbles. They are fantasies backed by nothing, and when they pop either debts are paid or actual institutions collapse (or government steps in and starts bailing them out with new IOU’s and even nationalization as an option this government has taken. Nationalization means these companies will now get their paychecks directly from even more IOU’s.). There’s a reason these too big to fail firms would have failed. They couldn’t pay off their debts. And they have debts in the trillions.
But Is it really now “ALL” backed by IOU’s. That is the critical question.
All I am saying is that this current system did not start fresh from 0. It couldn’t due to the money regression theorum (Mises)
The original amount of gold in the system before they confiscated it should have remained in the system in the form of dollars not backed by gold anymore. It should not matter that they pyramided on top of that, for I am obviously only talking about the base/reserve amount. For example, if the total money supply was 10 billion dollars and they pyramided 10 to 1, then when they confiscated the gold, about 1 billion should have been not backed by any IOU.
It seems to me that the question is not about numbers or how much influence that amount has today, but whether there is any amount whatever that is not backed by IOU’s, as I believe there should be due to the past commodity standards. If there is any amount, no matter how small (1 billion or even 1 million), then paying off debt is possible. The nominal values, billions or trillions, are not important. After the debt is paid off, then we should remain with the original quantity (or close to it) of the reserves backed by gold and gold circulating before they went off the commodity standard. and of course, any quantity of money will do just fine.
I see what you’re saying now. Good points
According to your thinking what about this. Maybe that money is over-seas (for 50% of all U.S. dollars are over-seas according to Bernanke which isn’t a far-fetch number I don’t think) spread out or even spread out within the U.S. All debts are paid off and an African has a nickel, this one a dollar, this South American a dollar, this Texan a penny, etc… would it even matter. Wouldn’t everybody see all this money being cashed in debts being paid off and thus by the time we get down to this money spread out, yes, we would have to have a new political system that would actually change the worth amount at some critical point so people still somehow get money back into their pockets. I see what you’re saying though. The money now is being fractured off the gold-backed money in the past, and this gold-backed money if never taken out of circulation. Let’s say burned or all those pennies I see and pick up sometimes on the sidewalks or lost in the dirt somewhere and sometimes uncovered don’t add up to that past gold amount. If politics got virtuous all debts could be paid off and that last remnant of dollars from when it was backed by gold would still be in circulation. Hmm, I don’t know if I really have an argument against that.
Yes, the gold-backed money (equal to the reserves before the break from the commodity) should be in circulation. This money cannot just be out there under the mattress. There must be also a small % of the total balance sheet of the Fed that represents this quantity. Paying back the debt, therefore, should be possible. I think that most people wrongly assume that the present monetary system started from scratch (or perhaps they don’t assume anything), but if one understands Mises’ money regression therom (as most mainstream economists do not), then it is obvious that this cannot be the case.
I actually read about the all money=debt in “The Creature of Jekyll Island” by Griffin and it made sense. But what you are saying makes more sense. Thanks