U.s. National Debt Grows To Large For National Debt Clock

Airing Date Oct.5, 2008

• Category

  News & Politics

[toSTONEiGO]

ron paul 2012. his agenda will reduce spending by trillions every year.

[bldude2]

Still not "trillionS" a year. 1 Trillion in the first year...Only thing I can see being cut to really meet that would be discretionary spending and Defense...yeah, good luck with cutting defense. >_<

[dwakeling1]

I see your mum's scales are working correctly

[Stanley Mulaik]

Most of the national debt is not used to fund government operations. It is just obligations of the government to pay back time deposits at the bank as they become due. So, much is backed by hard money on deposit. Investors like to buy US bonds and securities to earn interest and have a safe place to park their dollars. They take money out of circulation and dampen inflation.

[Stanley Mulaik]

Nonsense. He would drive us into depression.

[Stanley Mulaik]

Much of the so-called national debt consists of debt obligations on time deposits of investors at the Fed that pay nominal interest. Many of these are foreign investors who have bought US government bonds (like CD's). Social Security Trust Funds also have large holdings of U.S. securities which earn low but nominal interest. Only a small portion of these are borrowings to fund government operations. They will all be paid off by the Fed, which can create any money needed out of thin air.

[Stanley Mulaik]

When Fed creates and issues out of thin air new fiat Federal Reserve dollars to buy Treasury securities (IOU's) from banks, it automatically and implicitly, as a government agent redeems with government money the U.S. debt to the banks implicit in the securities. The pile of securities at the Fed are owned by the U.S. government and not the Fed, which just takes care of them, and uses them to fight inflation by selling them to banks to drain money from the banks.

[Stanley Mulaik]

National debt is myth. Why?

Treasury issues securities (IOU's), to get money for deficit spending. These are sold at public auction to banks. Govt. has debt to banks. Later on banks put these securities back up for auction and the Fed (Govt agent) buys them with govt. money it creates and issues into the reserves of the banks in return for the securities. This redeems U.S. debt to banks. Fed is NOT owed for securities, no more than a bank clerk is owed for securities it buys with bank money.

[UnitedKorean]

Obama or Romny, it doesn't matter. USA is doomed anyway. The only way Americans will stop themselves from self destructing is to elect someone like Ron Paul and start working their butts off like good Americans instead of living on borrowed money from China and bombing foreign countries with that debt money.