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It Is Mathematically Impossible To Pay Off All Of Our Debt
Submitted by Michael Snyder via The Economic Collapse blog,
Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt? Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year.
Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either.
It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025. That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges. So no, we aren’t going to be “paying down” our debt any time in the foreseeable future. And of course it isn’t just our 18 trillion dollar national debt that we need to be concerned about. Overall, Americans are a total of 58 trillion dollars in debt. 35 years ago, that number was sitting at just 4.3 trillion dollars. There is no way in the world that all of that debt can ever be repaid. The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes.
It shocks many people to learn that our debt is far larger than the total amount of money in existence. So let’s take a few moments and go through some of the numbers.
When most people think of “money”, they think of coins, paper money and checking accounts. All of those are contained in one of the most basic measures of money known as M1. The following definition of M1 comes from Investopedia…
A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency.
As you can see from the chart below, M1 has really grown in recent years thanks to rampant quantitative easing by the Federal Reserve. At the moment it is sitting just shy of 3 trillion dollars…
So if you gathered up all coins, all paper currency and all money in everyone’s checking accounts, would that even make much of a dent in our debt?
Nope.
We’ll have to find more “money” to grab.
M2 is a broader definition of money than M1 is, because it includes more things. The following definition of M2 comes from Investopedia…
A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.
As you can see from the chart below, M2 is sitting just short of 12 trillion dollars right now…
That is a lot more “money”, but it still wouldn’t pay off our national debt, much less our total debt of 58 trillion dollars.
So is there anything else that we could grab?
Well, the broadest definition of “money” that is commonly used is M3. The following definition of M3 comes from Investopedia…
A measure of money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements and other larger liquid assets. The M3 measurement includes assets that are less liquid than other components of the money supply, and are more closely related to the finances of larger financial institutions and corporations than to those of businesses and individuals. These types of assets are referred to as “near, near money.”
The Federal Reserve no longer provides charts for M3, but according to John Williams of shadowstats.com, M3 is currently sitting somewhere in the neighborhood of 17 trillion dollars.
So even with the broadest possible definition of “money”, we simply cannot come up with enough to pay off the debt of the federal government, much less the rest of our debts.
That is not good news at all.
Alternatively, could we just start spending less than we bring in and start paying down the national debt a little bit at a time?
Perhaps that may have been true at one time, but now we are really up against a wall. Our rapidly aging population is going to put an enormous amount of stress on our national finances in the years ahead.
According to U.S. Representative Frank Wolf, interest on the national debt plus “mandatory” spending on programs such as Social Security, Medicare and Medicaid will surpass the total amount of federal revenue by the year 2025. That is before a single penny is spent on homeland security, national defense, paying federal workers, etc.
But even now things are a giant mess. We are told that “deficits are under control”, but that is a massive hoax that is based on accounting gimmicks. During fiscal year 2014, the U.S. national debt increased by more than a trillion dollars. That is not “under control” – that is a raging national crisis.
Many believe that that we could improve the situation by raising taxes. And yes, a little bit more could probably be squeezed out of us, but the impact on government finances would be negligible. Since the end of World War II, the amount of tax revenue taken in by the federal government has fluctuated in a range between 15 and 20 percent of GDP no matter what tax rates have been. I believe that it is possible to get up into the low twenties, but that would also be very damaging to our economy and the American public would probably throw a huge temper tantrum.
The real problem, of course, is our out of control spending.
During the past two decades, spending by the federal government has grown 63 percent more rapidly than inflation, and “mandatory” spending on programs such as Social Security, Medicare and Medicaid has actually doubled after you adjust for inflation.
We simply cannot afford to keep spending money like this.
And then there is the matter of interest on the national debt. For the moment, the rest of the world is lending us gigantic mountains of money at ridiculously low interest rates. However, if the average rate of interest on U.S. government debt was just to return to the long-term average, we would be spending more than a trillion dollars a year just in interest on the national debt.
So the best possible environment for “paying down our debt” that we are ever going to see is happening right now. The only place that interest rates on U.S. government debt have to go is up, and our population is going to just keep getting older and more dependent on government programs.
Meanwhile, our overall debt continues to spiral out of control as well. According to CNBC, the total amount of debt that Americans owe has reached a staggering 58.7 trillion dollars…
As the nation entered the 1980s, there was comparatively little debt—just about $4.3 trillion. That was only about 1.5 times the size of gross GDP. Then a funny thing happened.
The gap began to widen during the decade, and then became basically parabolic through the ’90s and into the early part of the 21st century.
Though debt took a brief decline in 2009 as the country limped its way out of the financial crisis, it has climbed again and is now, at $58.7 trillion, 3.3 times the size of GDP and about 13 times what it was in 1980, according to data from the Federal Reserve’s St. Louis branch. (The total debt measure is not to be confused with the $18.2 trillion national debt, which is 102 percent of GDP and is a subset of the total figure.)
As I discussed above, there isn’t enough money in our entire system to even pay off a significant chunk of that debt.
So what happens when the total amount of debt in a society vastly exceeds the total amount of money?
Is there any way out other than collapse?
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Well....
Since money (currency) IS debt, if the debt were paid off there would be no currency. Wrap your head around that one.
Principal != Principal + % ~ The System is Rigged in their favor...
You cannot win because inflation = theft.
well, duh!
that's why they are growing the money supply, so that we WILL have enough money to pay off all the debt!
/s
Relax! US Federal Debt – Problem Solved
The American government has been spending trillions of dollars on programs it had no Constitutional authority to create, and such unconstitutional expenditures exceed the amount of the federal debt. Therefore,
Not only are most government programs themselves unconstitutional, but the debt used to pay for these unconstitutional programs, which were created by previous taxpayers, is paid for by future taxpayers. Therefore,
Taxation without representation is also unconstitutional. In fact, it is the reason America seceded from the British empire.
Given that the US Constitution is pretty simple, then anyone who loaned money to the US government should have known that they were loaning money to a fraudulent and illegitimate enterprise and thus should not expect repayment.
Of course, there would be a huge consequence – no one would be willing to loan money to the US government again until it started obeying the Constitution, which would be ...
Good!
Debt taken on by fools that can’t pay it back is never a zero sum game like Paul Krugman would have you think.
100 Oz of gold ought to hedge the implosion and let you buy an island with fresh water.
Do you actually think that you will get the stash out of the Country?, State?, County?, City?, Neighborhood?
... out of the pool pump enclosure in your back yard?
Even though current debts may never be paid back, at any current point in time we will always have whatever existing stockpiles of natural resources and commodities on which to run our world the best that we can, kind of just like we do now.
But the trending attitudes might change a little for some people.
the jew system of money that replaced the patriot one creates the principle but not the interest. insuring enslavement.
There is a way to avert collapse.
Open the mints to citizen held gold and silver to be minted into money. 100s of millions of oz of gold jewellery in US citizen hands.
Congress set the value of gold and silver monetary units according to the Constitution. It will be a high number - similar to that estimated by Bloomberg for China.
More points here: http://www.safehaven.com/article/37496/action-plan-to-prevent-us-monetary-and-economic-collapse
Deut. 23 19-20
19Do not charge a fellow Israelite interest, whether on money or food or anything else that may earn interest. 20You may charge a foreigner interest, but not a fellow Israelite, so that the Lord your God may bless you in everything you put your hand to in the land you are entering to possess.
Hey Christian Conservatives, wake up. You're the slaves.-
Buy from whom?
The data was worse after WWII and yet it got paid back somehow.
We don't work that hard anymore though, so we're gonna have to pull some tricks like cutting spending and raising the retirement age to 70 for starters.
Sure. We had plenty of jobs, taxes were low and we had the CAPACITY to pay it back. We do not have the capacityto pay, we have no jobs, and taxes are already maxed out.
So no, the comparison doesn't work.
Plus, Bretton Woods syphoned money from the conquered nations. To the victor go the spoils.
The "somehow" was that we were the only industrial nation left standing after the war.
I guess we could go blow everybody up again.
That might help
Debt = scam so there is no real need to pay it back.
Short constitution: Shut up and do as told or else!-Signed, US Army.
I say everything they do is constitutional.
Let us imagine that in 3030BC the total possessions of the people of Egypt filled one cubic metre. Let us propose that these possessions grew by 4.5% a year. How big would that stash have been by the Battle of Actium in 30BC? This is the calculation performed by the investment banker Jeremy Grantham.
Go on, take a guess. Ten times the size of the pyramids? All the sand in the Sahara? The Atlantic ocean? The volume of the planet? A little more? It's 2.5 billion billion solar systems. It does not take you long, pondering this outcome, to reach the paradoxical position that salvation lies in collapse. -George Monbiot explains why the 99% must lose everything because the banksters have compound interest working for them... and against us.
"The only place that interest rates on U.S. government debt have to go is up" --- That will make the debt rollover trick that they are currently pulling impossible....and then the end
More likely, imo; ZIRP, cash bans leading to barter and dollar abandonment creating hyperinflation, if a war isn't invented. Most likely, multi-front Russia(Ukraine) and China(South China Sea and/or Korea). An alternate would be a false flag nuke, ala 911, to blame on the new boogeyman ISIS. They must have constant crises to scare the money(debt enslavement) out of Congress. They've probably already created the script on how the 'turrurists' sold cigarettes for cash dollars on the streets to finance the nuke they bought off of Pakistan; therefore, requiring a total cash ban. After all, it was the guise of the war of drugs that they used to crack down on cash deposits. Don't forget Cheney and Ovomit have been nearly prosmising one for years before this article;
http://www.independent.co.uk/news/world/middle-east/isis-claims-it-could...
Well, when you divide a number by zero the result goes to infinity and is not numerically defined. I guess hyperinflation would be similar. Kind of a Zen thing. Only comprehendable while drunk.
Miffed
That's what I was thinking, divide by zero and travel back in time through the resultant wormhole in order to smother Mayer Rothschild in his crib.
What a disgusting sewer rat AM Rothschild must have been. And all his creepy spawn, too.
Well that does it. Im'ma change all my retirement savings to Hryvnia.
Then I will be rich and Miffed will leave her current family to run away with me...
My dearest urban roman. You are already rich. You are intelligent. You are awake. You are quality. These are noble traits and should never be discounted for anything money could buy which is fleeting. I would much rather be with a noble poor man I could respect than a rich fool.
It's funny you should mention running away. I'm always fighting this urge! Every day I drive highway 8 east and come to the 67N exit towards my home. Sometime I have a fierce compulsion to keep going east. Just to see where I would end up. Would I become Kerouac? A wondering mystic writer with no home, just a traveler experiencing life in the moment with no safety net? Or would I just end up as a dried up pile of bones in the Mohave desert, unsung and forgotten? I complain about having no freedom yet do I have the courage to toss my life away and embrace it? So far the answer is no and I take my freeway exit. And wonder what I have left behind.
http://youtu.be/KUaQgRiJukA
Miffed;-)
I am flattered and touched by the thoughtful reply, MM.
My comment, of course, was BS. I am too old for aimless road trips <sigh>
Just kick some dirt in on me when I'm done. Otherwise I'll stink and draw flies (more than now)...
My dear roman, perhaps old in body but never in spirit.
I look at some old picture of me in high school and sigh. That young pretty girl is gone but I'd do see the spirit I have still. Mr tells me he sees so much of me still in those pictures which really makes me laugh, I cannot. How funny our perception of ourself is so different from those around us. To be honest with you, I would never go back if I had the chance if I couldn't take my mind of today with me. What a silly time that was with such petty concerns. I cringe at the wasted time.
Do not discount yourself my dear friend. Road trips are seductive but don't necessarily provide satiety. One can still peer out the window and see the beauty of Devine creation be it the wonderful mountains near my home or a flower planter on a deck in the city. The mind wanders unrestrained and the soul untethered. This is the greatest of rewards. Knowing you can find contentment no matter where you are.
Miffed;-)
"I Travel not to go Somewhere, but to just go."
R.L. Stevenson
UR & MM, you are both treasures here.
FORWARD SOVIET VAGABONDS!
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
- T.S. Eliot
Little Gidding, I think?
Since money (currency) IS debt, if the debt were paid off there would be no currency.
Mike Maloney was all over that a few years ago, but in his version all that remained was debt.
Servitude anyone?
No, that's if ALL debt were paid back, not the US national debt. When the economy is so prosperous that 25 year olds can own a house free and clear debt free, thats when we have to start worrying about that problem. Or we could get rid of debt money anyway, just to be safe.
"Well....
Since money (currency) IS debt, if the debt were paid off there would be no currency. Wrap your head around that one."
Currency is a money coupon. Money is gold and silver. If the debt stops expanding, the world fiat monetary ponzi implodes. - fixed it for yaYup! And that debt is what the Buffett's and the Soros' of this world call wealth. Not to mention the pension funds and money market accounts... etc.
What we really need to know is; Who's buying the zero yield bonds of this Ponzi? Belgium? LMFAO!
It's the Buffets and the Soros', and they're stealing our childrens' future... and (almost) nobody cares.
that debt is what the Buffett's and the Soros' of this world call wealth.
There is no wealth but the ability to draw the next breath, and to have fuel for that thing we call a body for one more day, one more hour. Beyond that the term "wealth" has no meaning, and the Buffets and Soros’ (sounds like a disease, eh?) of the world have no more or less than the street bum who just found an unopened box of cereal.
They may eat their fuel from a golden plate with silver utensils, but does it give them more energy or prolong their lives one second longer than their measured span of time? They scramble to accumulate things that they cannot keep, things that they cannot own because none of their wealth exists.
The only meaningful wealth for humans is the time that we have life in measured amounts. When it is gone, there is no debt, there is no savings account, there is no more of the things of this world for us. Regardless of the constructs we play with while we breathe, when we make our exit we will leave with not one bit of anything that belongs in this world - not even the body we inhabited. So in the end we are all equally "wealthy" or "poor".
And when we stand in the line waiting for judgment, there are no head of the line privileges, and no “do-overs”. When we stand in that line waiting for judgment, will we see weepers, crying for the waste that was their life and the loss of the meaningless “wealth” they never really had? The Buffetts and Soros’ own nothing more or less than anyone else in terms of true wealth.
Consider the “wealthy” of the past, and learn from them.
Word. And word is bond, back where I come from.
"It Is Mathematically Impossible To Pay Off All Of Our Debt"
Who is "our?" You don't mean me; Do you? I didn't sign for it, it's Unconstitutional, and I have withdrawn my consent. Therefore, try my neighbor, but I doubt he's "our" either.
Liberty is a demand. Tyranny is submission..
I am willing to share my guillotine, making that "ours."
If you change "ours" with "theirs" it’s suddenly pretty easy to come up with a sollution!
Sell THEIR kids to china, they need all the small hands they can get to build those iPhones
and
Sell THEIR women to the Saudi’s
But on the other hand, why would they expect that the debts are repaid? It’s pretty easy to enslave people who are in debt, it takes their guts and creativity away and if the debt is never repaid, the interest becomes a fixed income.
There is one thing wrong with your proposal. They don't care about their women and children. Just their own power. Simply how psychopaths perceive the world and why we cannot understand them.
Miffed
"They don't care about their women and children. "
THAT, right there: is the God awful truth of the matter and why many people are being oppressed and expropriated by TPTB.
Hey, they're easier to understand than women.
They are just apex savages of the past who have out-sourced their physical aggressiveness and upped their psychopathic skills for manipulation and control.
They can evolve too.
Take a look at 'odious debt' and 'unconscionable contract'
About that "our" thingy... "we" do owe over $10 trillion and "they" have dibs on the money supply... so "we" will have a problem.
(from July 2014 in a post about Jörg Hülsmann's Has Fractional-Reserve Banking Really Passed the Market Test?)
The national debt may be 17T, but the US money supply that is supposed to repay it is only 12T, so of course it can't be paid back, but then the stock market is 23T, so even if the 99% didn't require any money to eat or shelter or commute to their indentured servitude, the 1% must be suckers to buy into this overvalued stock market, the municipalities must be retards to think there is going to be any table scraps left over from treasury repaying its debt which will allow them to cover the 4T they have borrowed, then moving back to those 1% retards who can never get their purchase price out of the equity markets... those companies that they overpaid for must be really mismanaged to think that after the Federal and Municipal governments get done trying to use the 12T money supply to repay their 21T in debt, that their companies will be able to repay the 10T they owe. But the award for dumbest dumb-asses (as opposed to just the dumb and dumber), goes to the little guy... who thinks that he- after big governments, big business, and big wallets have figured out how to divide the 12T amongst their over 50T in claims (and get something more than .25 on the dollar), joe-six-pack, is ever going to come up the 10T he owes the banksters...
You can't call a note denominated in money that has no value.
Yes you can. And if the debtor cannot satisfy the note, then the debtor is up shit creek without a paddle. The debtors with access to regulators and printing presses will do relatively better than those without.
Madoff turned himself in because he ran out of new investors to float his ponzi scheme.
In this global central bankster version of madoff's ponzi scheme, the printing press is the substitute for new investors required to feed the ponzi math progression.
Madoff turned himself in to avoid getting nailgunned with extreme prejudice.
'Merican Ponzi blew up in '08 when the 25-54 yr/old population segment peaked and has been declining since...fewer consumers, investors, etc. Next year the 25-64 yr/old set will peak and just imagine the debt the Fed and Federal Gov will need to create to maintain the phony valuations.
http://econimica.blogspot.com/2015/05/reality-check.html
http://econimica.blogspot.com/2015/05/the-truth-of-great-financial-crisisand.html
Madoff's son died strangely, probably with with forced assistance. And didn't the other one die weirdly, too? But about Madoff trying to avoid the nail gun, is he really all that safe in jail? If he lost bankster money a jail would be the last place he should feel safe. That's where bankster and govt psychos are schooled.
If *everybody* is in debt who is the creditor?
The Reaper...
https://www.youtube.com/watch?v=RjMEzBMiTJ4
Black Sabbath, Is God Dead. (looks like Young Banker Stumbles on Sidewalk, thinks of the Old Bankers he works with, and asks what he is doing, Vietnam Era war)
https://www.youtube.com/watch?v=OhhOU5FUPBE
The Tribe
It turns out there is no shortage of "mathematically impossible" things when it comes to:
- banking
-MSM
- political activism
- corrupt jurisprudence
LOL! I think on top of that, it's people who aren't even born yet.
Is it too early to start blaming them?
Hillary Clinton donors
Anyone promised a pension, for starters.
"Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt? Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year.
Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either."
it's debt you own to yourself. It'll simply redistribute weallth from those that own the debt to those that don't. Jesus, how economically inept can those posters be? Cycle will simply reset and restart...
p.s. - regarding foreigners
http://en.wikipedia.org/wiki/List_of_sovereign_debt_crises - it's a long list. Noone cares, get over it.
Plus I don't see how you could run out of bytes anytime soon. It's still less than the capacity of a int64; plenty of room... And you don't need the unsigned bit, as it's only going up ;)
the trillion dollar coin begs to differ with you.
I think we may need another coin. Perhaps two.
Miffed
households got nothing to do with it. the maggots have a printing press.
So thats why the POTUS and congress doesnt even TRY with debt reduction and instead flies off to play golf? Got it...seems right..
There is no POTUS, only a criminal imposter!
Math is racist.
Zimbabwe agrees.
More like antisemitic.
Zero was invented in Southern India
No shit. Why would the crack dealer want his Ho to get clean?
M1 & M2 are definitions of debt, not money.
In reality, M1 & M2 are measurements of various debt supplies, not money.
It just doesn't matter, can't you guys figure it out?
Seriously...
It's almost like the numbers are magic. Peter Pan figures.
Well, using the "math" they teach in schools today, who knows?
Just charge it on my Visa. I should have room.
Just charge it on my Visa. I should have room.
Thank God gold is a barborous relic that no one will want to take away from me to help pay thay unpayable debt. I can just have it cast into shiny yellow bullets so that the banksters can go out in style.
Silver's more traditional for monster killing bullets.
Le's get this straight. He said the gold standard was the barbarous relic not gold.
I have a great idea to pay off the debt. Everyone should party, smoke weed, drive really COOL cars, screw heaps of chicks, go surfing, play hookey from school, take sickies from work, go fishing, go hunting, learn how to make moonshine (ethanol) at home and do whatever makes you happy.Will this pay off the debt? Probably not, but it is a hell of a lot more fun than being fucked up the ass by Janet Yellen, the banks, the IRS and government assholes.
Since ALL paper financial instruments are PROMISES, a whole lot of folks are going to wonder why promises to them were not kept. It's the Madoff/Corzine economy. It worked wonderfully until the day it didn't.
What is the specific persormance of the "promises"? IE."promise to DO what?
The future, Mr. Gittes! The future.
What debt?
The Debt of Fealty to your Betters, your Masters, your Rulers, your State Authority Tax Collectors.
Filial Piety. Fealty. Duty. Debt of Loyalty.
When Debt is money why in the Hell would you want to pay it off........?
The mafia wants the concessions, plus 8% off the top as Juice.
China & European Banking Cartel have Leverage on our Assets and Debts now.
----------------------------------------------------------------
Leverage Takes AWAY Sovereignty & Freedom & the Chance to compete as an Equal with the same advantages of the Large Organizations, and the same change in the Court of Law and Civil Courts.
----------------------------------------------------------------
** British Trade History, Colonialism and Power Plays all indicate this is the "End Game". America the Dream is all but over. **
Neither Congress nor the FED can afford the Political Consequences of Raising Interest Rates for very long and especially not to the level of 5%
So FED & Congress will give away the American Dream in a kind of "Quickening".
Bank Private Credit to GDP for United States
2011: 55.47615 Percent (Data spans from 1961 to 2011, Bubble is clear in 2003)
http://research.stlouisfed.org/fred2/series/DDDI01USA156NWDB
So, since the "money" is a fiction what exactly is owed?
Physical assets that can be taken and "paid for" with said fiction, under the military authority of the US army. That is owed. FRNs are but documents issued by the US army.
I suppose the debt could also be paid in specie, in any number of products made by the US. Say, industrial equipment. China and her friends could for instance request the delivery of X megatonnes of industrial equipment, worth 16 trillion dollars, free of charge, as payment, or the delivery of XYZ megatonnes of grain and beef to China and Arabia, per year, for 100 years. Its one of many possibilities.
RTFB - Predatory lending has a clear goal - Accept as many payments as possible before the default and them come in to repo the collateral - It's global. Regulate the Fing Banks.
China will end annexing US without a referendum.
The proper answer is:
I DO NOT owe YOUR creditors one single fucking cent.
YOU borrowed it: YOU pay it back or face the consequences on your own.
Per HH is a very flawed metric. Try per taxpayer, but only tax PAYERS, not those who file and get a zero taxable balance and maybe a goody from Uncle Sam.
This is lame. Most people, especially liberals, have this static view of the economy and finance. Money in circulation is a small part of the overall net worth of Americans. Plus, debt is paid with income. Gross national income for the US is $15 - $16 trillion-ish
Also, the debt figures cited are way, way low. Total debt, including entitlements, is much closer to $70 trillion.
Paying off $70 trillion with $15 trillion a year in income is possible, if you're disciplined and prudent. Unfortunately, with the US's leadership, that seems unlikely.
So, what is the definition of "income"? In a tax statute?
Whatever the judge says it is. Spare us the legalese, the constitutional arguments, etc. The law is whatever a military judge says.
Wrong income measure. The Fed Govt tax revenue is about $5 trillion. So $70 trillion of debt ( way too low) vs Fed income of $5 trillion is apples to apples and no way out of that leverage. If you want to use GDP as income then the numerator is total US debt - Govt, Corporate and Personal of about $290trillion before considering unfunded pension and entitlement liabilities. That's the problem. MSM and politicians continue to feed us apples to pears talking points and it muddles our ability to defend ourselves from the consequences of their actions.
Wrong income measure. The Fed Govt tax revenue is about $5 trillion. So $70 trillion of debt ( way too low) vs Fed income of $5 trillion is apples to apples and no way out of that leverage. If you want to use GDP as income then the numerator is total US debt - Govt, Corporate and Personal of about $290trillion before considering unfunded pension and entitlement liabilities. That's the problem. MSM and politicians continue to feed us apples to pears talking points and it muddles our ability to defend ourselves from the consequences of their actions.
ok. money is broken. it's time to re-think money because it's broken. broke and broken. ok.
Money is not broken. FRNs are NOT money. They are evidences of debt of a promise to do NOTHING!
called it in January
"There will be no interest rate hike. Ever."
http://twitter.com/Intellikon/status/554808154194972673
Yes when every dollar created with interest attached on the debt i.e. for every dollar of credit extended with interest required to pay it back it creates a $1.02 in debt and it is backed by nothing and can only be paid back in the same. There is always less money in circulation than outstanding debt. This is reason usury is shunned in the first place. Money with interest attached is nothing more than an IOU loan without any tangible backing. Nothing outside the money creation process can be used to pay off the that .02 cents of interest to zero out the accounting ledger.
If the dollar was gold or silver backed you can balance the books. Pay back the dollar plus .02 cents worth of gold or silver.
This is the bank's con game, they take collateral (equities, liens on titles, etc) in lieu of money they create to cover that interest payment that can never be paid off in the first place because they don't allow tangible asset backing or interest free money into the loop. It is the simplest and oldest con game in the world yet people allow it to be perpetrated on them over and over.
Not that anyone cares but FRN notes are violation of the 5th Amendment if not tangibly backed by something other than an IOU promise.
https://en.wikipedia.org/wiki/Fifth_Amendment_to_the_United_States_Const...
This is the reason why.
Finally, the Amendment requires that the power of eminent domain be coupled with "just compensation" for those whose property is taken.
A property is a tangible asset forfeiture of any asset via eminent domain without compensation of another tangible asset of equal value is unconstitutional for this reason. FRN if backed by gold or silver fulfills this requirement, unbacked it doesn't.
Again, what is a dollar?!
A u.s dollar... approx 371 grains of silver or 15 grains of gold.
If math mattered to the printers then this reprinted article would as well
I already commented ten times before that I’m planning to default on my share.
Nobody listens.
How do you owe a fiction?
You are one of the few who actually believe the public debt is supposed to be paid off. The regime leaders know that the public debt is supposed to be rolled over, inflated down, and even written off if necessary, but NEVER paid off - what an antiquated concept !
I thought the actuaries had this all under control....
It was possible up until 2001. After that the 'one party' took over, debt exploded, 9/11 came, and the US has spent and bubbled itself into future oblivion!
The whole thing is easily solved, without causing inflation. (1) Stop Treasury Refunding Auctions. (2) Have the FED, with their "money created out of thin air" ability, buy ALL federal debt on the day it MATURES. (3) Have the FED shred the bills, notes, etc.
No new money is created, but the "national debt" slowly decreases. Within 30 years, the current 18+ trillion debt becomes dollars (as currently happens when the TREASURY honors the debt), but no new debt is needed to replace the 18+ trillion.
Without the boogy man "debt," the true problem (Congress refusing to pay its bills with a balanced budget) can be given center stage and "the President doubled the national debt" shit can disappear.
“So what happens when the total amount of debt in a society vastly exceeds the total amount of money?
Is there any way out other than collapse?”
This question is a fatal conceit, an erroneous assumption by the author. It is a corrupted worldview of a person immersed in a world they cannot see out of, something like a fish in water that cannot imagine anything else.
This assumption is easily shown to be a falsehood by a simple examination of history.
In the U.S. the Resolution Finance Corporation was entrusted to spend $50B during WW2. This money was exogenous debt free money, and RFC essentially was a national bank.
From 1938 to 1974 Canada had a Crown Bank, and spent debt free up until 1974. They had the fourth largest Navy in the World. They built a national railroad, a national highway, built out seaways, had free education and free medical, and they did all of this without debt and without price inflation. Canada forced their private banks to 4 year loans at 6 percent only. This means the loans could never double and hence the usury was constrained. BIS forced BOC into being a debt issuing bank in 74, and of course the future is now, and Canada is a debt slave country.
Germany in 1934 was still flat on its back, busted out. Reichsbank under Schacht did a number of maneuvers to put currency into the money supply. Infrastructure loans, MEFO BILLS, Rentenmarks. All of these units were designed to have money that stayed local and not pay off international debts. Schacht went outside of the international gold capital markets and traded directly with other economies, and he did this with a simple scheme by just putting numbers on each other’s books. 6 million workers had jobs in very short order as labor was lacking simple money as demand.
With regards to the U.S., it should first convert its money supply to Sovereign money. This can be done overnight with a law change, and Americans would not even notice it.
After the conversion, debts are slowly paid down as people work them down. Onerous and fraudulent debts can be taken before a court of law, and there they come under review. Nobody should have to labor and spend their life energy paying off predators who created and maneuvered a sneaky rent scheme designed to steal. Many if not most of the U.S. debts are fraudulent rents. Goldman Sachs is a prime example of a rent seeking predator company.
It’s a mind job, a skull fuck, when people cannot see outside of the debt money system. History is full of examples of non debt money systems working for hundreds of years.
In England they had the Talley stick system that lasted from around 1200 to 1694. In 1694 the Bank of England became the first private debt spreading bank to own a country. England prospered well under the Talley system.
And yes, it was our favorite tribal friends who brought BOE bank into being, and then debt spread the population. Usury on debt money then funds the skull fuck hypnosis, so you then hear mind numbing questions like “how do we pay it off?” In the past, the bankers did pamphleteering, paid off University Presidents (Wilson), bought off prime ministers (Churchill when he went bankrupt); they owned Hollywood and bought off TV and radio stations. They figured out if they can loan money into existence, effectively they own the money supply, and hence they own the economy and its people. It is real simple, if somebody LOANS you something that means they are the OWNER. Why the hell do we put up with private companies making credit from nothing, and then LOANING it to us at interest. Are we insane?
Really, how stupid are we? We willingly fall for this kind of stupid shit. How do we pay off the debt? It’s an unbelievable question and symptomatic of where we are at. Maybe we are hypnotized hairless apes that don’t deserve to continue as a species.
www.sovereignmoney.eu
BRAVO
Well said! The hypnotic force is immense.
About time someone figured it out! Debt IS FRN and interest us not created. Once the FEDERAL Reserve was allowed to illegally exist the financial system was doomed. Please find the legal definition of a "dollar"!
We WILL pay this back - the only problem is that we will need to turn the US dollar into Zimbabwe Bucks. You will be making $200,000 a year working a MickeyD's, but still won't be able to buy that $500 Big Mac.
China just built 10,000 miles of Rail Road, while the U.S. is sitting on their thumbs.
China's state banks created about 40 percent of that Rail Road funding as loans. These loans are then forgiven
I am going to say it again. They are forgiven. This means the debt instrument is torn up, and the former CREDIT now becomes floating money. This non debt money circulates in the economy and can become savings.
A sovereign can also make self liquiding loans that are spent into inelastic markets, especially infrastucture. Future fees pay down the loan, and the future fees come from the loan to begin with. This type of loan should be zero interest, especially as it self finances.
Come on! Jesus. These things are well known and have been done throughout history.
The bankers have their tentacles around our private parts and deep into our brains, so the vast majority of the population cannot think straight.
Do American's enjoy it while China steals their jobs and then uses debt free money to build out their Chinese economy?
Americas Debt system means that American's are funding their own dispossesion.
"China's state banks created about 40 percent of that Rail Road funding as loans. These loans are then forgiven
I am going to say it again. They are forgiven. This means the debt instrument is torn up, and the former CREDIT now becomes floating money. This non debt money circulates in the economy and can become savings."
Would you happen to have any references to support that claim? I'm very interested in learning more about this.
If overdone thats a sure way to foment some serious inflation. If the creation of money with loans is not somehow balanced with the destruction of money by either paying debt or taxing trasnsactions for the sake of removing cash from circulation, you'll end up with serious inflation.
The power to create cash at will works a lot better combined with the power to destroy cash at will.
Arrest Lloyd Blankfein and Jamie Dimon.
Ridiculous. It is possible to pay debts bigger than the amount of money in existence.
It all depends on what is done with the money. For instance, a large amount of that debt is in the form of pension assets. Those pensions could, mathematically speaking, receive cash in return for writing off that debt. The cash would be spent paying pensions and would enter the general circulation, ready to be taxed over and over again.
The GDP alone is several times bigger than the amount of money in existence, due to circulation.
Let's just say everyone holding debt is FUBAR and everyone in debt is FUBAR. Who is not FUBAR? Neither borrower or lender be!!! Been down this road before
I've heard posters make the argument that raising interest rates won't immediately cause corresponding rate payments on the national debt since it consists of T-Bills issued at various rates. So how long would it actually take for the debt payments to reach critical mass if rates creep-up no higher than mid=single digits?
I think there was a recent article that put the duration of tottal US Govt debt at just less than 7 years. But the Fed's Operation Twist may have distorted the normal position.
Easy to fix . . .fed buys all debt issued by treasury (like BOJ) then buy all debt on secondary market . . . then forgive the debt and wipe it off the books. That is what going to happen when we start over anyway, might as well throw in student debt mortgage debt and car loans . . . then, let's see, oh yeah, revolving credit debt. Then we're good to go . .
The Financial Leaders will be Royal, everyone else Minnions or the vast.....Slaves.
Deals will be made and if war develops, many will march to feed the homeland.
The Elite must be proud how they took down the Empire......will they have left or bought Islands to control from Afar?
This is learly a completely new situation. There have been numerous "new situations' in human history, where "the system" started doing something that was absurd, unprecedented and utterly novel. Nobody actually wants the system to collapse, except for a few misantropic loners in the mountains of Urah or Pakistan. Everyone wants perpetuity and continuation.
So what happens? Nothing. We are playing a game of monopoly where there's unlimited debt with the players and unlimited expansion in terms of houses, hotels, new streets, new cards. A few players are sitting with stacks of dozens of cards, and a most other players are sitting, forced to continue playing, with piles of paper debts. The game has long since lost any conceptual merit other than as continuation of an abstraction. The game isn't even fun any more for most people, and we continue the theatre only because not collectively playing this game is substantially less fun.
M4- helicopter money
M14 - hands off my money
PRINT , KICK, HIT WALL, AMEXIT, EOTWAWKI............. Guillotines
REBOOT......... Or the less painful option WWIII.
You forgot the state, municipal and other local debt now well above $3 trillion. And do not forget the massive unfunded pension and entitlement liabilities. See ZH article above on city pension shortfalls.
No way to exit gracefully. Time to try the ham handed ways - eliminate cash, confiscate accounts above a "fair" FDIC limit, impose a large minimum wage that ripples through the salary scales of all private sector businesses and force wage driven inflation to increase the tax take and pay-off the remaining debt in worthless dollars.. OH, and p.s., prohibit storage of cash and precious metals in your personal safe deposit box at the bank as chronicled by ZH a couple weeks ago. No where to hide. A dark society and darker system for sure.
There is no money. There is no debt. Only illusions.
Correct Pumpkin, but enough people believe it sufficiently for now, to sell or borrow for valuable stuff for the invisible thing we call money :-)
So they get the valuables, we get confused!
Everything's under control. No need to panic, friends. This chart shows growth which everyone knows that it's good and our primary goal.
Paying off debt isn't important. It is being able to use debt as a weapon that is important.
Yes because printed dollars do not cover the interest, only the principle - usury interest always compounds.
You would not even be able to pay back $1 in the Federal Reserve system, ever.
When no industrial endeavor can satisfy the need for the velocity of capital creation necessary to hold back deflation then all industry is merely financial---and that is not and should not be an industry at all--financial services and banking are a f-ing Utility for Industry! --not industry itself.
it's always mathematically impossible to pay off debt . always. as long as there exists a claim on the money supply ( credit ) and money is either destroyed , hoarded, or paid as interest on the claim----then there is always going to be more claims than there is money in existence.
HENCE THE NEED FOR PRODUCING MORE MONEY BY COINING OR PRINTING.
interest = growing claims
hoarding = money saved
money destroyed = money lost or otherwise disappeared
in any credit based economy, credit grows continuously until the claims on the money supply are too large and then more money must be created or the claims must be destroyed--and usually both happen together in bad times.
There is no need or reason to pay off all debt as there is always a population that takes out forward loans, i.e. mortgages, which makes for plenty of money in the system
"The real problem, of course, is our out of control spending."
Such an extremely disappointing statement for Snyder to make, since he should know better by now. Several previous comments already posted on Zero Hedge pointed out the paradoxical ways that the established MAD Money As Debt systems works is that IF all the debts were paid off, THEN there would be no more public money supply. Another comment posted under the article above pointed out the way that the mathematics of exponential growth drives the debt slavery systems towards generating numbers which become debt insanities. The SOURCE of the problem is the SOURCE of the public "money" supply, becoming frauds by privately controlled banks, which are enforced by governments. And, another comment promoted the superficial notions about monetary "reform" featured on this Web site:
http://www.sovereignmoney.eu/
Sovereign Money
A deeper analysis discovers that sovereignty is based on the power to rob, with the power to kill being the most extreme form of the power to rob. Monetary "reform" that does not face that fact can propose superficially correct analyses, and related superficially correct "solutions," which do not address the deeper issues regarding how and why governments are necessarily the biggest forms of organized crime controlled by the best organized gangs of criminals, which currently happen to be the banksters.
The established monetary system has become like a thoroughly metastasized cancer, which has no treatment that would not kill the society that already suffers from it, because society is already terminally sick and insane, while the Federal Reserve Board is like the doctor of last resort, which provides hospice care for its condition, although it was an iatrogenic illness to begin with.
Money is measurement backed by murder:
the debt controls backed by the death controls.
The real resolutions of the runaway debt insanities situation will result from that provoking death insanities, through which processes new systems of death controls, to back up new systems of debt controls, may eventually emerge. However, the actual situation is WAY WORSE than the article above indicates, because the monetary system has been making "money" out of nothing as debts to "pay" for strip-mining a fresh planet's natural resources, developing a debt engine treadmill, upon which people turned those natural resources into garbage and pollution as fast as possible.
At any time in human history before the development of weapons of mass destruction, then attempting to join or work for the ruling classes would have made the most sense. However, after the development of weapons of mass destruction, the rulings classes have become too criminally insane to join or work for. For thousands, if not millions, of years, it made SENSE to be the biggest bullies, or to be the buddies of the biggest bullies. At any time previously to the development of weapons of mass destruction, being able to back up lies with violence made sense, and doing that the best made sense, and so, joining the groups who were able to do that the best made sense. However, after the development of globalized systems of electronic frauds, backed by the threat of force from atomic bombs, everything based upon being able to continue to back up lies with violence has become criminally insane:
“The splitting of the atom changed everything, save man’s mode of thinking. Thus we drift towards unparalleled catastrophe.”
— Albert Einstein
Given the tragic trajectory that "we" are on, practically nobody is interested in changing their mode of thinking! Where is there anything publicly significant which is remotely close to changing the mode of thinking? Where is the intellectual scientific revolution that addresses that the real problems have become globalized electronic frauds, backed by atomic bombs? Politics continues to be so totally dominated by various old-fashioned religions and ideologies that it appears to be practically pointless to bother to point out what real problems have become! For several decades, I have been worrying about the ways that the society I was born into was based on presuming endless exponential growth, while that economic system was being backed up by weapons of mass destruction. Despite those worries being the primary factors that directed every important decision that I have made throughout my life, the only consistent theme has always been that the more I learned, the worse it got.
The established social pyramid systems, based upon thousands of years of history of being socially successful by backing up lies with violence, enabled the development during the last few centuries of the international banksters, becoming the biggest bullies, who were able to apply the methods of organized crime to the political processes, in order to accomplish the supreme achievement of organized crime, which is that they can legally counterfeit the public "money" supply, while that fraud is enforced against everyone else by governments, run by politicians who are the banksters' puppets, who perform for the muppets, on stages set up by the mass media, which are also puppets for the banksters, or whatever other label one wants to apply to the pyramidion people in the currently established social pyramid systems, based upon integrated systems of legalized lies, backed by legalized violence, headed towards psychotic breakdowns, because being able to back up lies with violence never makes those lies stop being false.
The civilization we were born into was based upon thousands of years of the history of successful warfare being able to back up deceits with destruction, which became the basis for a political economy based on enforcing frauds. THE PROBLEM with doing that now is that, after the development of weapons of mass destruction, the rulings classes have becoming criminally insane, and so, attempting to join them, or to work for them, has become criminally insane. MEANWHILE, they already totally dominate society, by already claiming to own everything which can be owned, while their claims are backed by coercions, through the established systems of legalized lies, backed by legalized violence, which are trapped in the vicious spirals of their own crazy contradictions, that being able to enforce frauds does NOT stop that frauds from still being false.
The root cause of the schizophrenic economy which had a sort of magical mathematics in its bookkeeping systems, that drove that debt slavery system to generate numbers which became debt insanities, was human history being based on successful warfare, which then morphed to become successful economics based on enforced frauds, DESPITE THAT BACKING UP LIES WITH VIOLENCE NEVER STOPS THOSE LIES FROM STILL BEING FALSE, but only drives society as a whole to become more psychotically insane. That situation is WAY WORSE than guys like Snyder ever present, because they do not go through deeper analyses of how and why natural selection pressures drove the development of artificial selection systems to become based upon the maximum possible deceits and frauds.
There is almost nothing but a core of organized crime, surrounded by controlled opposition groups. To join in with the dominate systems of legalized lies, backed by legalized violence, is the same as to work with, or for, any of the big banks, or the big corporations that grew up around those banks, via their vicious spirals of corrupting big governments to enforce those frauds. Doing that means that one can then make more "money," but inside of fundamentally fraudulent financial accounting systems, so that successfully making more "money" inside of that system is to due to participating inside of runaway criminal insanities. Making more "money" inside of monetary systems based on enforced frauds suffers from the contradictions that enforcing frauds does NOT stop those frauds from still being false. Thus, the more "successful" one becomes at joining the banksters' gang, the more one facilitates the runaway criminal insanities that are controlling civilization, in ways whereby that civilization automatically becomes more psychotically out of touch with what it is really doing, both with respect to its social polarization, as well as with respect to its irreparable destruction of the natural world, because every economic decision is being made using the bent rubber rulers of fundamentally fraudulent financial accounting systems.
Although many articles on Zero Hedge superficially discuss the problems regarding "bad investments," those are actually orders of magnitude worse. Almost every article on Zero Hedge grossly understates what the problems are, and so, then grossly overstates what the "solutions" could be. It is almost impossible to fully comprehend the degree to which the civilization we were born into has become criminally insane, due to progress in physical science having nothing like that allowed to happen in political science. The weapons of mass destruction have literally become trillions of times more powerful, and similarly the capacities for global electronic communications have also become literally trillions of time greater too. HOWEVER, those are primarily employed through the social pyramid systems based on the history of the social successfulness of backing up lies with violence, to become globalized electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. While, at the same time, almost all of the publicly significant opposition to that continues to promote various sorts of old-fashioned religions and ideologies ...
The established social pyramid systems are based upon a tiny minority, the banksters, etc., who have specialized in being dishonest, and backing that up with violence, while the vast majority of the rest of the population have adapted to that by becoming ignorant and afraid, and indeed, afraid of not continuing to be deliberately ignorant. People want to continue to believe in the bullshit that they want to believe in! All of the dominate religions and ideologies are promoted by controlled opposition groups, which effectively are working for the dominate organized crime gangs, because the dominate organized crime gangs were the wolves in sheep's clothing, who have promoted the moralities that the vast majority of the Sheeple have been taught to bleat, as those are expressed through all of the dominate religions and ideologies, which were developed as forms of controlled opposition, to surround the core of organized crime, being operated by the banksters, etc. ... Around and around and around we go ... IF one wants to be socially successful, one has to join with the biggest bullies, and promote their bullshit. However, doing that has become runaway criminal insanity after the development of weapons of mass destruction, because being able to back up the MAD Money As Debt systems with the MAD Mutual Assured Destruction systems, have become runaway MADNESSES.
To attempt to relatively be able to join the banksters' gangs, for the sake of money and power, made both practical and theoretical sense for thousands of years, while it was possible to win wars. However, we have recently entered an era where any real wars would result in everyone losing. But nevertheless, the ruling classes, and those they rule over, both still have the same psychological and political habits, that developed through thousands of years of previous history, when it was possible to win wars. Therefore, we are living inside of a civilization whose progress in physical science has driven itself toward manifesting runaway criminal insanities ... while the overwhelming vast majority of people, in both the ruling classes, as well as those they rule over, do their best to deliberately ignore all of that ... Progress in physical science has "changed everything," BUT NOT POLITICAL SCIENCE, and "thus we drift towards unparalleled catastrophe.” At the same time, it appears mostly a waste of time to attempt to persuade people to change their "modes of thinking." It is painfully obvious to anyone who participates in politics that people who promote old-fashioned religions and ideologies are practically impossible to reason with.
The article by Mike Snyder above was CORRECT, except to the degree that it grossly understated the degree to which the civilization that we are living inside of has become psychotic and is manifesting runaway criminal insanities, because the debts which are mathematically impossible to repay are merely the most obvious of the overall ways that fundamentally fraudulent financial accounting systems are controlling civilization. Similarly, nothing that Snyder, or guys like him, say tend to ever get out of their ruts, of continuing to presume in their own basic world views, based on old-fashioned false fundamental dichotomies, and related impossible ideals, which are implicitly present in their notions of what the "solutions" to the problems could be.
Actually, there is NOTHING less than intellectual scientific revolutions, which would enable political science to become more consistent with physical science, that might approach being sufficient, and those advances would primarily be based on making artificial selection systems become more consistent with natural selection systems. HOWEVER, more than 99% of currently living human beings are NOT interested in that, and NOT willing to do that! Therefore, as the established debt slavery systems develop into runaway debt insanities, which become such that "It Is Mathematically Impossible To Pay Off All Of Our Debt," the real ways that money is measurement backed by murder, and that the real debt controls depended upon the real death controls to back those up, MEANS that debt insanities are headed towards provoking death insanities.
That automatically gets worse, faster, due to the degree that the vast majority of both those inside the ruling classes, as well as those they rule over, do NOT want to face any of those basic facts. Therefore, the underlying situation of strip-mining the planet's natural resources being "paid" for with "money" made out of nothing as debts continues to automatically get worse, faster, while it is politically impossible for the basic facts to be recognized or admitted regarding civilization actually behaving like that. Instead, about the only way that one can "practically" respond to the runaway criminal insanities being manifested are those that Snyder suggested: "There is no way in the world that all of that debt can ever be repaid. The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes."
The tragic trajectory that we are on is that we are running out of time to go through the sorts of paradigm shifts that we would need to go through, so that our politics would become less psychotic. Instead, everywhere one looks, it becomes more painfully obvious that old-fashioned religions and ideologies continue to be the overwhelmingly dominate influences. Indeed, there are good reasons to suspect that the banksters actually believe in some of the most old-fashioned religions and ideologies, so that to join them, or work for them, amounts to going as backward as possible, and requires believing in even more absurd things, so that one has to become even more psychotic and criminally insane, in order to be able to join them! The basic structure of the established social pyramid systems is based on being able to continue to enforce frauds. To join or work for the pyramidion people requires that one continue to enforce frauds. HOWEVER, ENFORCING THOSE FRAUDS HAS ALREADY BECOME RUNWAY PSYCHOTIC CRIMINAL INSANITIES!
Harriet Tubman for a new face on the $20. bill???
Robert Mugabe would be more appropriate.