Can the FED buy all of our debt at no interest.

Discussion in 'Economy' started by Neubarth, Oct 31, 2009.

  1. Neubarth
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    Neubarth At the Ballpark July 30th

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    As most of you know, the FED owns a lot of our national debt. On the Bonds that they have bought, the FED directly deposits the interest received into the Treasury. The end result is that the bonds have no real interest rate attached to them.

    So now, I ask the question that I have posed before. Why can't we have the FED buy all of our debt for no interest? If so is there a limit to how much we can borrow? If there is no limit than why are people worried about our national debt? There is noting to worry about. Right?
     
  2. Toro
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    Toro Diamond Member

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    Theoretically, yes they can.

    Monetizing all our debt would certainly create inflation though. It has monetized a fair amount of debt thus far. The Fed has been a bigger buyer of our debt than China since the crisis started.
     
  3. Neubarth
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    Neubarth At the Ballpark July 30th

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    Now, I look at that and wonder why you think they need to monetize the debt. I see no reason for that. It would be far better to forget the debt.
     
  4. Mike Mitrosky
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    Mike Mitrosky Member

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    The UNited States could issue its own paper money,, US Notes with a red seal and then there would be no debt associated with the issuance of the money. But the last president who tried this stunt got shot in the head at daley plaza
     
  5. Neubarth
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    Neubarth At the Ballpark July 30th

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    Right now, in San Diego I am seeing Deflation, not Inflation.
     
  6. Toro
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    Toro Diamond Member

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    In San Diego, I'm sure you are.
     
  7. John1
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    John1 Rookie

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    Nobody can change the current debt based system that we have. We are currently in billions of dollars of debt and it is increasing by the the hundreds of millions every year. It is a fact that Congress can simply print it's own money and use it to pay off ALL of our debt, and this would not cause inflation. The Constitution does not grant Congress the power to emit bills of credit(print money) but it does not disallow it. This will not ever happen because the millions of dollars of interest paid on the debt is making somebody very, very rich. These people(bankers) that are making huge profits off the interest payments have a lot of money and power, and if the system of debt from which they grow rich were to be threatened, you could bet that they would go through great lengths to protect it and prevent any real change. They would spend millions on a massive lobbyist effort to provent change and to protect their profits, as they do, in fact, have the money and power to do so. Because if the debt were eliminated so would be the millions of dollars in interest payments we make each year, this is where 1 out of every 5 of your tax dollars are going: into the pockets of bankers. The people of this country are unaware of this fact, that we could pay off our debt byprinting our own money, and they will remain that way thanks to the efforts of those who profit from our current system; they don't want us to know.

    When we borrow money, the people from which the money comes don't actually have that money, they just invent it out of nothing. This is an extremely hard concept to understand, but they just invent it and then loan it out and charge interest; Congress could do the same thing but without the debt part. In other words, the money is just loaned into existence.
     
  8. Neubarth
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    Neubarth At the Ballpark July 30th

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    I would like to eliminte the national debt. Can we have the Fed buy it and forgive it?
     

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