Just saw John Sununu, one of Republicans favorite Bushie junk yard attack dogs all up in arms about the debt subject to the limit (the so-called national debt) reaching $16 Trillion dollars, and going on to tell people that every man, woman, and child in the United States now owes $50,000 to pay that debt off. Now, I’m here to tell you that all that is bull sh*t.
The debt subject to the limit is a debt incurred by the Congress and the Treasury Department because when the Government spends more than it taxes, the Treasury Department issues debt instruments in the name of the US Government even though it doesn’t have to do that in order to deficit spend. These instruments make the Government a debtor. But they don’t make any individual man, woman, or child in the United States a debtor. So, the idea that YOU owe $50,000 or even a single dollar is BS. You’ve signed no such note. You’ve not charged a single dollar on your credit card for this purpose. And you’ve not made a single promise that any portion of the national debt will be paid by YOU.
Well, you might ask: “Doesn’t the US have to pay the $16 T debt sooner or later by taxing, and won’t we then be responsible for our portion in the form of a tax obligation?”
The answer is that the US must pay all its debts when they fall due. It’s in the Constitution. If the Federal Government refused to do that it would be violating the Constitution, and would be illegal. But saying that the US must pay all its debts, doesn’t say that it must do so only by using taxation to raise enough revenue to run budget surpluses and pay those debts. It’s that lie that Sununu and the other austerians want you to believe!
How we pay US debts is up to us and is a political question. If we do it the way Sununu suggests we’ll condemn the country to permanent recession in the context of a perpetually depressed economy in which the wealthy get wealthier and everyone else gets poorer. That’s what a plutocratic tool like John Sununu wants. But there are other ways to do it.
“We” Don’t Owe $16 Trillion; and You Don’t Owe $50,000
It gets even simpler than minting special platinum coins; all the treasury has to do is issue dollar bills in place of treasury bills. The Fed buys T-bills with Federal Reserve Notes so they can earn interest on our debt while they control the money supply.
If we just bypassed the Fed and printed money in place of promissory notes, we could pay off the debt with real money and do away with our debt based monetary system. Lincoln tried this with his famous green-backs, but he was assassinated and the program fell apart. Warren Harding and John Kennedy also discussed doing away with the Fed, and both died in office.