I don't like the idea of negative interest rates, but I suppose we could actually start paying down the National Debt for a change.
Ideally, most would certainly agree. On the surface, it makes sense. But it's technically impossible. And therein lies the rub. This is the reality of the debt ceiling delusion. It's based on a paradox. There's interest due on every Federal Reserve Note in existence.
For example, if we borrow the very first Federal Reserve Note in existence and promise to pay it back plus another Federal Reserve Note's worth of interest, where do we get the second Federal Reserve Note to pay the interest? The answer is that we have to borrow that Federal Reserve Note into existence and promise to pay it back with interest as well. So, now there are 2 Federal Reserve Notes in existence, but we now owe 4. And so on, and so on, and so on, and so on. It keeps happening over and over and over again.
The result is that there is never enough currency to pay the debt. There is always more debt in the system than there is currency in existence to pay the debt. Therefore the entire system is impossible. It is finite. It will come to an end. We're nearing that time now. The Federal Reserve is clearly demonstrating that it has lost the ability to control the price of currency. That's what all of these recent hundreds of billions in Federal Reserve bailouts to banks are about. We're witnessing its last days. Literally. And that's precisely why the recent news I linked about the BIS is so important. The international bankers know it. The whole monetary policy is designed to fail. But it's designed to fail gradually, over the course of a couple/few lifetimes in order to gradually get to where the BIS wants to take the world unnoticed. The BIS has operated almost silently since 1930, with very, very little notice or reporting of its function.
Anyway. If the government stopped borrowing to do deficit spending, the payments on those Treasury bonds aren't going to stop. If the public stopped borrowing and going deeper into debt, car payments aren't going to stop. There is a payment due every month on the principal plus the interest on every Federal Reserve Note in existence and those payments do not stop. If we stop borrowing, then no new currency is created to replace the currency that we used to make those payments. Whether we're making a payment on a loan or paying a tax to make a payment on a Treasury bond, the portion of the payment that goes to pay off the principal extinguishes that portion of the debt. BUT...the debt also extinguishes the currency. When currency and debt meet, they destroy each other. If we just pay off the principal only, all of the loans and Treasury bonds that exist, the entire currency supply vanishes. So, if we don't go deeper into debt every year, the whole thing goes into a deflationary collapse under the weight of those payments.
Under these circumstances, balancing the budget, bringing down the debt, and living within our means is deflationary. It is impossible to do under our current monetary system without collapsing the entire economy. The system is designed to require ever-increasing levels of debt just to continue.
