Why is the US government $17 trillion in debt? Well, the numbers on the US Treasury's website shows that interest payments on goverenment debt in the last 12 months cost $415,688,781,248.40. Nice to see that they give the numbers to the last cent.
If you add up the numbers for every year since 1988 (the earliest date for which the numbers are provided, you get at total of $8,996,538,991,476 - I hope you don't mind if I round that up to $9 trillion. This number completely dwarfs even the cost of the war in Iraq - around €2 trillion.
This table shows how those interest payments compare with US GDP for the same period. You can see that these payments have been costing US Taxpayers an average of 3.63% of GDP over those 25 years.
While some of the $9 trillion can be thought as payments to China and countries like Saudi Arabia who have a trade surplus, most of the debt is the result of money creation by commercial banks. Those banks have the right to create money out of thin air to buy government bonds and then charge tax payers interest on those loans. And because of the way the Basel II and III rules work, lending to governments that have a AAA rating doesn't even count for their capital requirements. It's a fantastic deal for the banks, who get to suck in around 3% of GDP for lending governments fictive money.
The whole system is a complete scam. And the same brilliant system has been used by the UK banking system to siphon off 3% of UK GDP since the early 1950s at least.
There is a simple solution. The US Treasury could mint $1 trillion platinium coins and pay off this fictitious debt. Unfortunately, it appears that last monday, President Obama has ruled out that one. Here's what he said :
If you add up the numbers for every year since 1988 (the earliest date for which the numbers are provided, you get at total of $8,996,538,991,476 - I hope you don't mind if I round that up to $9 trillion. This number completely dwarfs even the cost of the war in Iraq - around €2 trillion.
This table shows how those interest payments compare with US GDP for the same period. You can see that these payments have been costing US Taxpayers an average of 3.63% of GDP over those 25 years.
While some of the $9 trillion can be thought as payments to China and countries like Saudi Arabia who have a trade surplus, most of the debt is the result of money creation by commercial banks. Those banks have the right to create money out of thin air to buy government bonds and then charge tax payers interest on those loans. And because of the way the Basel II and III rules work, lending to governments that have a AAA rating doesn't even count for their capital requirements. It's a fantastic deal for the banks, who get to suck in around 3% of GDP for lending governments fictive money.
The whole system is a complete scam. And the same brilliant system has been used by the UK banking system to siphon off 3% of UK GDP since the early 1950s at least.
There is a simple solution. The US Treasury could mint $1 trillion platinium coins and pay off this fictitious debt. Unfortunately, it appears that last monday, President Obama has ruled out that one. Here's what he said :
"I know there's been some discussion, for example, about my powers under the Fourteenth Amendment to go ahead and ignore the debt ceiling law. Setting aside the legal analysis, what matters is is that if you start having a situation in which there's legal controversy about the U.S. Treasury's authority to issue debt, the damage will have been done even if that were constitutional because people wouldn't be sure. It would be tied up in litigation for a long time. That's going to make people nervous.
So a lot of the strategies that people have talked about, well the president can roll out a big coin, or he can resort to some other constitutional measure," he added. "What people ignore is that ultimately what matters is, 'What are the people who are buying treasury bills think?'"I wonder whether he might have said this because he is under pressure from the Wall Street lobbyists who want to keep their $9 trillion gravy train on the rails?
I have come to a conclusion that the debt will never have to be repaid .The debt will only keep growing .If the lenders stop borrowing the global financial system collapses.Then who loses the most?not the US or Europe ,but China and Arabs .There will be a revolution in their countries.
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