The national debt is a problem of the public sector, the government, which operates outside of the discipline of the private market. Private businesses that rack up such large debts cease to be attractive investments. People are free to take their money elsewhere. This lack of freedom and the discipline it allows is why I am opposed to your moving the banking system entirely into the public sector. I understand your argument, but the Fed is operating outside of the discipline of the private market. It actually has more free reign to operate than the government itself does. It is a privately run monopoly of 12 regional banks given carte blanche to control the nation's money supply. The system I advocate, with an independently monitored body, may be difficult to implement effectively, but not impossible. And I certainly see it as more accountable than the Fed is, or ever has been. The Fed banks reaped the rewards while the rest of the people suffered in the aftermath of the Great Depression. I fear that could easily happen again if our system isn't changed.
If the government did not persistently spend more than it takes in tax revenues, then it would not need to borrow money by selling US Treasury securities to individuals and institutions. There would be no long-term debt and no interest on that debt.
The problem here is not with interest, but with the fact that the government does not have to obey bottom lines to the same extent private businesses do. They operate under political discipline rather than market discipline. The results are not always optimal for the economy. I am in agreement on this point, regarding the reckless spending of the government. It is a curse upon us all, and is not something we can easily rectify. And the Fed, in turn, is more than obliging to let the government spend itself into debt while racking up compunding interest.
It is a two-fold problem, where the government and Fed have combined to serve up an 8 trillion dollar nightmare. And in truth, the government has been the one responsible for it all in the end, because it has put the Fed in control of our currency, and spent us into our debt.
Last Edit: Sept 18, 2005 6:42:21 GMT -4 by turbonium
You have no idea how easy you have it sitting there in a comfortable shelter free from hunger, perhaps free from disease, typing in messages and having them instantly delivered to people all over the planet. The self-interest of the intelligent and industrious, free to be productive, has allowed the average person today to live far more comfortably than the kings of the past.
No, this is not true. I greatly appreciate the comforts of life we have in our developed nations, here and elsewhere. Also untrue is your statement regarding the "average person", who is certainly not living far more comfortably than the kings of old. Half the world's population (~ 3 billion) live in extreme poverty, with less than $2 a day to live on. The gap between the wealthy and poor is constantly widening, in the US and in nearly all countries, undeveloped or industrialized.
The "self-interest" can result in a productive nation.....it can also result in what we have today, within our country and throughout the world. Within our borders, in general terms, we are the beneficiaries of the positive effects of this philosophy. However, I don't think the majority of third world nations think much of corporate "self-interests" when they plunder their resources and exploit them for slave labor.
Last Edit: Sept 18, 2005 7:05:47 GMT -4 by turbonium