Defaulting on our debt and money without interest questions

Please answer these questions directly unless you can not:

1. If we default on debt, how will the vast majority of American middle class suffer given the jobs that China/India no longer would do for us, Americans would have to do themselves creating more jobs. are we really that degenerate that we can not find people among ourselves who can pick apples and cut grass?

2. Was POTUS Thomas Jefferson an idiot when he said "I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."

3. If money is loaned at an interest, and the people always need to find more money to pay that interest, then mathematicaly doesn't that inevitably lead to collapse/disaster? if you think not, then explain the math.

 

Granny says whilst dem politicians been standin' around playin' pocket-pool, we've reached the tipping point...

U.S. debt is now equal to economy
8 Jan.`12 WASHINGTON – The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy.

 

I don't know if I'd call Jefferson an idiot but he certainly did not like how the Constitution was written which gave the Federal Government far more power than he would have liked. He only agreed to it because Hamilton allowed him to tack on the Bill of Rights to it.

 

1. A default of US debt would be the end of our retirement, savings, and investment accounts. The banks, financial institutions, and investment firms would go out of business and take your money with them. If you invested in Government bonds those would be canceled by the default. The US dollar would be worthless.

2. Thomas Jefferson was an idiot because he didn't expect the invention of Credit Unions.

3. There is always some economic activity just from raw population growth before even factoring in wealth, bubbles, wages, and jobs.

In the past able body adults could take care of whole families just by subsistence farming, but that isn't enough to run a developed society. The Loan was invented as an investment for the future. That spending money now, that the person has yet to make, can push those people up so they can attempt to make more money in the future, contribute to the jobs society needs to function, and it may lead to higher tax income in the future even if the tax rates remain the same -- an investment.

 

We can't default on our debt

Not an idiot... just misunderstood. The banking system needs to be severely regulated though. They are out of control.

Interest doesn't disappear it gets put back in to the economy. So existing money can pay for interest with out needing more money to pay it off.

If the interest on the national debt was $1 million and the Govt taxed us $1 million to pay the interest, than no new money needs to be created.

It is true though that if all debt was paid off we wouldn't be able to pay off the upcoming interest. But that is just common sense since their wouldn't be any money.

 

With what money? In the end the Government hasn't changed at all... nor its own practices of spending money without looking to the future. Overall it would cause more harm than good if the Government doesn't solve the problems it already has. Either it cuts spending, dollar going into Hyperinflation or the Financial system becomes insolvent from the Acts of the Government.

He is 100% right when it comes to Institutions running the entire scheme of things... Whether it is the Government or a Private Institution regulating the flow of Currency mainly FIAT dollars or Coin Clipping it's going to cause massive problems to the Private/Public Sectors. Overall the power should be set into rules as to what is considered money but, no Organization can pull a Roman Empire and inflate/coin clip in order to finance faltering Businesses/Programs.

Truly depends if the end you acquire more money than what you've borrowed. Borrowing money while having interest tacked onto it isn't bad... It's when you borrow money with no intentions of repaying the Debt at all that is where the troubles begin.

 

According to Donald Trump, defaulting and not paying your debt is a great "business' move. He's even done it several times.

 

1: It will be terrible and inevitable. People need to become self reliant NOW. People need to rediscover the entrprenurial spirit and stop expecting the corporate infrastructure to protect them with employment and welfare.

2: If you look at historical evidence, it looks like he and Ben Franklin were certainly the brightest of the founding fathers with statements like that.

3: Yes, and this fact is supported by historical precedents.

 

This is a lie and purely a logical fallacy. You don't need more money to pay off interest.

 

For example. Say there is $1,000 in the economy in reserves.

Banking System
A | L
Reserves $1000 | Deposits $1000

Say the bank makes $1000 in 1 year loans with 10% interest. So we owe the banks $100

Banking System
A | L
Reserves $1000 | Deposits $2000
Loans $1000

Now, the loan gets paid off at the end of the year? What happens?

Banking System
A | L
Reserves $1000 | Deposits $900
----------------| Equity $100

Now the bank goes and pays it's employees and it's mortgage payments

Banking System
A | L
Reserves $1000 | Deposits $1000

Notice how no new money has to be created to pay off interest.