Wednesday, August 24, 2011

What's your plan.... - Part 2

That's exactly why I propose retiring the debt by assessing every individual and corporation a percentage of net worth as part of a balanced budget amendment. We will still be paying for the failed welfare state for the next 50 years, but we'll be doing that anyway. Otherwise, service on the debt will continue to increase as debt increases, and you'll have to cut transfer payments for things like social security and medicare, services people depend on to live. No one depends on interest on treasury bills, that can't be earned on some other investment. Sure, no one wants to pay 10 - 20% of their net worth to pay off the national debt. Maybe they would rather the US default on it's debt, or turn senior citizens out on the street. I'm sure they would.

Eliminating the debt, and the deficit will also revive the job market by reducing the competition for goods and services from the public sector, which is increasingly consuming everything. However, you can't contract public spending by balancing the budget without wreaking havoc on the economy. You have to cut somewhere, and what I'm suggesting is that you start with interest payment on the debt, by paying it off.

You also can't default on the debt, because real people depend on the income from treasury bills. If you pay off treasury bills as they become due, those same people and institutions can invest their money elsewhere, and do more good with it. Our government doesn't need to be in the business of guaranteeing interest income, and harms, rather than helps promote the general welfare, which is a constitutional mandate of our federal government, by taking money out of the private sector, and competing with the private sector for goods and services.

I have thought a good deal about this issue, and came up with the idea shortly after graduating from a 4 year land grant university in the 1980's with a degree in economics, and researching the amount of national net worth, which at that time was around $100T. If we were to follow this proposal, and it worked, it would solve the problem of sovereign debt, and restore the national economies of indebted nations, of which we're at the top of list in absolute terms, and in the top ten by percentage of GDP.

Rethinking my proposal isn't necessary because I've thought a good bit about it. I didn't understand your objection to it, rather, it seems you were agreeing with it by correctly stating the interest on the national debt will continue to increase as the debt increases. That money is better spent elsewhere, even though we still must have a balanced budget amendment to the US Constitution in order to reign in out of control federal deficit spending.

My vote for POTUS in 2012 will be Ron Paul.

What's your plan.... - Page 8

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