Debate Now Rational Discussion Thread - The National Debt Paradox

[Cassandro]

I'm not sure how this forum is supposed to work, but I am interested in creating a rational discussion thread in which government policies can be intelligently addressed without the usual petty and inane comments. This means that if you are unfamiliar with the subject matter or otherwise unable to express yourself in a comprehensible manner, you will refrain (or be excluded) from participating in the discussion. I hope this is possible. I will now start the following discussion topic:

The National Debt Paradox

I think the US National Debt has grown to unsustainable levels, both in servicing the existing debt and in obtaining new debt at reasonable interest rates. As a result, it will continue to grow even without existing budget deficits. Thus any attempt to alleviate this burden through a budgetary process is essentially impossible under the current system because Congress can replace any reductions with even more spending. The US is thereby faced with a debt paradox in need of an outside the box solution.

Two ideas that are now being discussed are revaluing the Treasury's gold reserves and issuing gold backed securities at lower interest rates. While neither will solve this problem alone, the may be necessary ingredients for a more lasting solution. What if they were both announced this year, followed by a (one-time) balanced budget announced at the end of the fiscal year (due to gold revaluation and tariff revenue)? In the mean time, a combination of increased money supply and lower interest rates would cause the dollar (and the nominal Debt) to lose value. This could provide the impetus for creating an alternative gold backed currency which would allow conversion of old currency and debt at a specified ratio. This would give a "haircut" to existing creditors, but would be attractive to new investors. If gold continues its preferred status, it might be a win-win situation in the long run.

I know that this scenario is somewhat sketchy, but is it even theoretically possible? Please provide your analysis of this and/or other proposals. Thanks.

 

[shockedcanadian]

Congress term limits and/or a law that punishes them for not balancing your deficit. Essentially you've abandoned capitalism for corporatism. Ultimately, this is also.why tariffs cannot be removedx they are.going to be a necessary evil until you balance your budget. If your dollar collapses, the party is over.

 

[Concerned American]

Congress term limits and/or a law that punishes them for not balancing your deficit. Essentially you've abandoned capitalism for corporatism. Ultimately, this is also.why tariffs cannot be removedx they are.going to be a necessary evil until you balance your budget. If your dollar collapses, the party is over.

Bottom line, just as in your personal finances, all of these policies will do nothing but kick the can down the road. Until the US takes the bull by the horns and pays the debt down, we will be screwed. You cannot sustain debt that takes 50% of your annual revenue to service. We aren't even paying equivalent of the minimum payment on a credit card and we're continuing to grow debt. The only solution is to discontinue ANY discretionary spending until the debt is reduced---that means NO deficit spending. Imagine what we could accomplish if we didn't flush half of our revenue down the crapper every year.

 

[sparky]

revaluation is raft with detail .......~S~

 

[Muhammed]

I'm not sure how this forum is supposed to work, but I am interested in creating a rational discussion thread in which government policies can be intelligently addressed without the usual petty and inane comments. This means that if you are unfamiliar with the subject matter or otherwise unable to express yourself in a comprehensible manner, you will refrain (or be excluded) from participating in the discussion. I hope this is possible. I will now start the following discussion topic:

The National Debt Paradox

I think the US National Debt has grown to unsustainable levels, both in servicing the existing debt and in obtaining new debt at reasonable interest rates. As a result, it will continue to grow even without existing budget deficits. Thus any attempt to alleviate this burden through a budgetary process is essentially impossible under the current system because Congress can replace any reductions with even more spending. The US is thereby faced with a debt paradox in need of an outside the box solution.

Two ideas that are now being discussed are revaluing the Treasury's gold reserves and issuing gold backed securities at lower interest rates. While neither will solve this problem alone, the may be necessary ingredients for a more lasting solution. What if they were both announced this year, followed by a (one-time) balanced budget announced at the end of the fiscal year (due to gold revaluation and tariff revenue)? In the mean time, a combination of increased money supply and lower interest rates would cause the dollar (and the nominal Debt) to lose value. This could provide the impetus for creating an alternative gold backed currency which would allow conversion of old currency and debt at a specified ratio. This would give a "haircut" to existing creditors, but would be attractive to new investors. If gold continues its preferred status, it might be a win-win situation in the long run.

I know that this scenario is somewhat sketchy, but is it even theoretically possible? Please provide your analysis of this and/or other proposals. Thanks.

If you revalue the gold on the US Treasury's books, it's just optics. It doesn't change anything. You don't gain anything because gold is a non-yielding asset.

And even if you sold off the revalued gold to apply it to the principal, it would only be worth about $600 billion compared to a $34 trillion debt anyways.

And if the US treasury started selling off the gold that would devalue it. So congresscritters with inside info could short gold for a nice quick gain.

 

[Hafar1014]

The annual deficit must be paid before the national debt can be reduced. Tariff are bringing enough to pay it off in 2 years

 

[Votto]

I'm not sure how this forum is supposed to work, but I am interested in creating a rational discussion thread in which government policies can be intelligently addressed without the usual petty and inane comments. This means that if you are unfamiliar with the subject matter or otherwise unable to express yourself in a comprehensible manner, you will refrain (or be excluded) from participating in the discussion. I hope this is possible. I will now start the following discussion topic:

The National Debt Paradox

I think the US National Debt has grown to unsustainable levels, both in servicing the existing debt and in obtaining new debt at reasonable interest rates. As a result, it will continue to grow even without existing budget deficits. Thus any attempt to alleviate this burden through a budgetary process is essentially impossible under the current system because Congress can replace any reductions with even more spending. The US is thereby faced with a debt paradox in need of an outside the box solution.

Two ideas that are now being discussed are revaluing the Treasury's gold reserves and issuing gold backed securities at lower interest rates. While neither will solve this problem alone, the may be necessary ingredients for a more lasting solution. What if they were both announced this year, followed by a (one-time) balanced budget announced at the end of the fiscal year (due to gold revaluation and tariff revenue)? In the mean time, a combination of increased money supply and lower interest rates would cause the dollar (and the nominal Debt) to lose value. This could provide the impetus for creating an alternative gold backed currency which would allow conversion of old currency and debt at a specified ratio. This would give a "haircut" to existing creditors, but would be attractive to new investors. If gold continues its preferred status, it might be a win-win situation in the long run.

I know that this scenario is somewhat sketchy, but is it even theoretically possible? Please provide your analysis of this and/or other proposals. Thanks.

Ever heard of the great reset?

Their plans are to move towards digital currency, which has begun around the world.

The goal was to destroy the old currency, which they have done via all the debt.

This will help enslave humanity even more to governments since you don't own any of the digital currency. You can only request to use it as the government allows you or disallows you for any reason they desire. Nor can you use it without being monitored 24/7 as the government forces you to dutifully redistribute it any way they desire.

Free trade will then be blamed for the demise of the old economic system and never government that created the debt that ended it.

 

[MisterBeale]

revaluation is raft with detail .......~S~

Lots and lots of information all over about how many think it will be done through devaluation and crypto. Now even the Russians and Chinese are expecting it.

This was a good explanation I thought.

Russia Says U.S. Planning $37 Trillion Crypto Reset​

1.9M views 5 days ago

 

[sparky]

This was a good explanation I thought.

yes & thx Mr B

~S~

 

[Cassandro]

Lots and lots of information all over about how many think it will be done through devaluation and crypto. Now even the Russians and Chinese are expecting it.

This was a good explanation I thought.

Russia Says U.S. Planning $37 Trillion Crypto Reset​

1.9M views 5 days ago

This should put to rest the argument that revaluing US Treasury gold wouldn't make any difference. Also, revaluing the gold at current market price wouldn't directly affect the gold market, other than officially recognizing its value.

The real question is about the effect of restating the value of Treasury gold at above market price. This could potentially free up trillions of non-borrowed dollars for government use, including reducing or eliminating the current budget deficit.

Combined with the contemplated issuance of gold backed securities, this could weaken the dollar and reduce the value of dollar denominated securities. This would increase demand for gold backed securities, which could then be sold with little or no premiums and lower the cost of servicing US debt.

Eventually, this could lead to the issuance of gold based US currency and strict controls on government borrowing. The politicians wouldn't like it, but the burden of unsustainable debt would be lifted from future generations.

 

[Concerned American]

This should put to rest the argument that revaluing US Treasury gold wouldn't make any difference. Also, revaluing the gold at current market price wouldn't directly affect the gold market, other than officially recognizing its value.

The real question is about the effect of restating the value of Treasury gold at above market price. This could potentially free up trillions of non-borrowed dollars for government use, including reducing or eliminating the current budget deficit.

Combined with the contemplated issuance of gold backed securities, this could weaken the dollar and reduce the value of dollar denominated securities. This would increase demand for gold backed securities, which could then be sold with little or no premiums and lower the cost of servicing US debt.

Eventually, this could lead to the issuance of gold based US currency and strict controls on government borrowing. The politicians wouldn't like it, but the burden of unsustainable debt would be lifted from future generations.

Sounds like more smoke and mirrors---currency manipulation to me. It will never be the answer to excessive debt. The only answer is painful and it involves living within our means and paying off the debt.

 

[Cassandro]

Sounds like more smoke and mirrors

You are excused from further discussion if you can't add constructive comment.

 

[Concerned American]

You are excused from further discussion if you can't add constructive comment.

You asked for a discussion. Truncating my post, in addition to being a violation of board rules, is also dishonest to promoting the discussion. Currency manipulation, which is exactly what you were advocating is not an answer. If you wanted an echo chamber for your position, you should have been honest in the beginning and not asked for a rational discussion. That isn't what you wanted and your post dismissing an opposing opinion is proof.

 

[Cassandro]

You asked for a discussion. Truncating my post, in addition to being a violation of board rules, is also dishonest to promoting the discussion.

How is quoting you dishonest?

Currency manipulation, which is exactly what you were advocating is not an answer.

Is currency manipulation a bad thing, especially when dealing with a crushing national debt? If so, please explain. Why is it not an answer?

If you wanted an echo chamber for your position, you should have been honest in the beginning and not asked for a rational discussion. That isn't what you wanted and your post dismissing an opposing opinion is proof.

A rational discussion does not include inane slogans, name calling or unsupported opinion.

 

[sparky]

Is currency manipulation a bad thing, especially when dealing with a crushing national debt? If so, please explain. Why is it not an answer?

Depends on who's the winners/loosers Woodie.....let's use an analogy persuant to Mr B's vid.......the gub'mit grants us a second home but it's value is 1/2 our original first home......we owe the same on our mortage as we did when we owned one home........in the material world we've broke even.......save for the fact that the price of everything is doubled......~S~

 

[Cassandro]

Depends on who's the winners/loosers Woodie.....let's use an analogy persuant to Mr B's vid.......the gub'mit grants us a second home but it's value is 1/2 our original first home......we owe the same on our mortage as we did when we owned one home........in the material world we've broke even.......save for the fact that the price of everything is doubled......~S~

No disrespect intended, but do you have a better idea on dealing with the national debt? Doing nothing will result in the collapse of the dollar and inability to finance our debt. Our current financial system practically eliminates the option of massive budgetary cuts, much less paying off our debt.

Moving to a gold backed system would at least give savers and investors some sense of financial security.

 

[Moonglow]

The annual deficit must be paid before the national debt can be reduced. Tariff are bringing enough to pay it off in 2 years

Not hardly.

Estimated tariff revenue varies by projection model, with one from Committee for a Responsible Federal Budget (CRFB) estimating about $3.1 trillion over 10 years (through FY 2035) and the Tax Policy Center (TPC) projecting roughly $2.9 trillion over Fiscal Years 2026–2035 for tariffs announced through mid-August 2025. Specific yearly estimates can differ, with the CRFB seeing higher overall numbers.

Estimates for the next two years vary based on the model

• Committee for a Responsible Federal Budget (CRFB):
  Estimates the tariffs will generate approximately $3.1 trillion in total revenue over the 2025-2035 period. This is an additional $600 billion beyond a previous Congressional Budget Office (CBO) estimate.
  
  
• Tax Policy Center (TPC):
  Estimates the tariffs will raise about $2.9 trillion over Fiscal Years 2026 through 2035, with approximately $339 billion raised in 2026.
  
  
• The Budget Lab at Yale (TBL):
  Provided a conventionally scored estimate of $2.7 trillion over 2026-35 and a dynamic revenue estimate of $2.2 trillion over the same period, reflecting negative economic effects.

 

[Concerned American]

How is quoting you dishonest?

You only partially quoted. Dishonest again. SMH. What are you trying to accomplish? A discussion or a faux ego boost?

Is currency manipulation a bad thing

It is smoke and mirrors and it has never been effective. That's partially responsible for the crushing debt.

A rational discussion does not include inane slogans, name calling or unsupported opinion.

So where did I use slogans? I made a point--just like you did. Run along. You don't want a discussion. You want validation for your opinion.

 

[Moonglow]

Neither side is serious about a balanced budget; it would mean an end to the gravy train fer both sides.

 

[sparky]

No disrespect intended, but do you have a better idea on dealing with the national debt? Doing nothing will result in the collapse of the dollar and inability to finance our debt. Our current financial system practically eliminates the option of massive budgetary cuts, much less paying off our debt.

I've asked the same Q quite a few times woodie......there appears no simple answer , seems we've 'kicked the can down the road' to the point where we can no longer do so.


Maybe it's time to admit we're a bankrupt nation brought on by a failed system via all those creatures from jekyll island we were warned about......before the quantitative sleazing starts again.....

Moving to a gold backed system would at least give savers and investors some sense of financial security.

I'm reading many countries are hoarding gold lately , seems they realize every fiat in human hx crashed/burned.

but these are smaller countries with better GNP/GND ratios who aren't over their heads in debt.

meanwhile, in the USofA, i'll wager more dust exists in Ft Knox than gold, and our federal reserve is neither federal nor a reserve.....~S~