JAN 2013 DEBT ISSUES In essence: 100% taxation of all personal income would not cover government spending.

100% confiscation and foreign sale of all assets in the US would not cover government debt. The US economy is a joke. The value of a dollar is an illusion. How long do you believe the dollar will continue to have value? How long do you believe the economy will continue to function, such that those living on government dole can still buy food, fuel, medicine, clothes, etc? Say politicians immediately eliminate every expenditure for any welfare program. What though about social security, medicare, etc., where workers have had taxes stolen from them their entire working life, on a promise of some benefit in retirement? Just these programs can shortly be expected to exceed taxable income. Eliminate all federal spending except on official treasury securities, at the moment call it $17 trillion of debt. Recent total federal tax intake was around $2.3 trillion, with outgo of around $3.6 trillion. If interest rates hit 13% every cent collected would go to interest. During the Carte administration interest rates were as high as 18%. The debt continues to rise. With retirements of baby boomers tax revenues are falling. How long do you believe there will be growing throngs of those stupid enough to loan their money, representing work of their life, to the U.S. government at ridiculously low rates? Does anyone believe the government is going to actually pay down debt? When the government borrows new money into existence, it can be argued that the inflation is twice what it would have been if the money had just been created. To argue borrowing is more inflationary, consider, the US borrows $1billion from China, issuing $1billion in treasury notes. The politicians spend the $1billion into the US economy. China comes to the US with the $1billion in treasury notes, and exchanges then for US mineral rights, factory equipment, whatever. There is $2 billion added to the US circulating currency, where printing the money there would only be $1billion. AND, we owe interest and principal to China, which will have to be found later. The same debt double inflation takes place on the private level for the life of any outstanding loan amount. Say you borrow $100,000 to buy a house. The cash is paid to the owner. The bank bundles your loan with others and trades it as a commodity. Say you loan $10,000 to your brother in law who buys a used Harley. You have a signed note and a lien on the Harley. While you may not have as easy a time as the bank does, the $10,000 promissory note you hold is a tradable item.

There is a canary in the mineshaft issue with foreign government lenders.. Whenever any entity gets the US government to promise a debt to that entity payable in anything other than US dollars, WATCH OUT. If debt gets owed, say to the Chinese, in THEIR currency, every time the exchange rate slips against us (which happens every time Congress borrows more currency into circulation), we owe much more than before. Its a key for the slope that has buried nations before, as it becomes impossible to just print the money, and the politicians therefore must choose between just not paying, or plundering the country. Right now, the government could just print trillion (in platinum coins) and pay off the treasury debt, which I argue would be DEFLATIONARY vs borrowing. There is babble on the net about a platinum trillion dollar coin. Such IS authorized by existing U.S. Code. 31 USC 5112 - Denominations, specifications, and design of coins (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretarys discretion, may prescribe from time to time. http://www.law.cornell.edu/uscode/text/31/5112 Meaning, legally, the Secretary of the Treasury already has the authority to create such a coin, without further direction from the President or Congress. Just as the face value of current quarters exceeds the value of the metals, the face value of a platinum coin does not have to have any connection to the market price of platinum. History: To fund the civil war, Lincoln declined the high interest rates of the international bankers, and just printed extra currency. In Hepburn v. Griswold (1870), the Supreme Court found the acts creating the greenbacks to be unconstitutional. The Constitution grants Congress the power: To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; So while it can be argued that just printing money is Un-Consitutional, creating a trillion, or zillion dollar coin, is ok. THEN currency based on that coin being on deposit would be ok. Games, but a game better than continued borrowing. At the moment, it is the Federal Reserve Bank running the printing press creating money, which the Treasury / politicians then borrow. We would be better off (if that phrase can apply to the situation) if it was the Treasury creating the new money via a means such as a platinum coin.

Trillion dollar coins, and money based on them spent into the economy would be LESS inflationary than borrowing, and to the extent they are used to pay-off existing debt, would be DEFLATIONARY. The party is over. There is NO solution that does not involve serious pain. The least drastic appears to be creating the money as contracted for debts come due.