Debt destroys value, and large debt will destroy our entire country. At the time of this writing, the National debt is $12,369,469,254,910.00, growing by thousands of dollars every minute. This puts a burden upon every man, woman, and child in the US to just over $40,000 each. Obviously this number is almost incomprehensible to most, but it is nonetheless vital that citizens understand how the debt will destroy this country.
The sole cause of the debt is the fact that the government is spending money it doesn’t have on services that it provides. Therefore, it borrows money, from its future self via the Federal Reserve or from foreign countries, to supplement spending that should not be conducted in the first place. This type of reckless approach to financial stability is futile.
To begin with, the government should not borrow money from the Federal Reserve, which is a privately owned company and not a component of the Government. Created in 1913, the Federal Reserve was given almost complete control over the money supply. As a private company, the Federal Reserve is charging the government, in the form of interest, to regulate the money supply when it has the right guaranteed in the Constitution.
"The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States; To borrow Money on the credit of the United States; To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States; To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; To provide for the Punishment of counterfeiting the Securities and current Coin of the United States; The charging of interest only compounds the irresponsible spending behavior of the Government."
One has often heard that Congress has the ‘power of the purse’ but sadly that purse has now been robbed by the Federal Reserve. With a private company holding the power that Congress once had, the Congress only has to the power to spend it. After interest is calculated in, the end result of borrowing money is to owe more than was needed to begin with; hence more debt than originally. If built up over time, debt will eventually undercut the entire economy. In short, the government must cease borrowing from itself at the price of interest; it must end the Federal Reserve.
Such is the case if money is borrowed from a foreign investor. As in the case of the Federal Reserve, interest is built upon borrowed money, which yields more debt, and if that debt is not paid in full, the remaining must be borrowed on again, with even more interest. However, a foreign investor can be even more dangerous to the prosperity of the nation than the Federal Reserve. If the foreign country suddenly becomes unfriendly or hostile to the United States, that foreign country may withhold lending or worse yet, call its debts in, which the United States, being broke, is in no position to pay. There is also the danger that in time the debt that foreign nations hold against the United States would become so great as that it could control the financial system of the United States, owning the majority of assets or their valued equivalency. Therefore, extra caution and reserve should be used before the United States obligates itself to a foreign investor.
Nonetheless, since from time to time borrowing money may be needed for a well functioning state, its elimination is not the goal. Borrowing is just the symptom of the problem. While its prudent to minimize the risk inherent in borrowing, the real problem to address is overspending.
It is easy to make the case for debt being harmful to a nation, but it is tough to convince enough
people to demand the solution, spending less. Many are reluctant to reduce government spending
because they are worried that there will be a reduction of the services that they have come to
depend on. This could not be a more inaccurate statement. A market-based solution will present
itself where government now treads. In most cases, the loss of services people expect from the
government will still be available through other means, such as charities or private enterprise. And
in those instances where governmental services cannot be made profitable and no organization
exists to meet demand, a new opportunity awaits the budding entrepreneur. Thereupon, there will
be no loss of services but rather transference to a more feasible solution. More importantly, relieved
of a large portion of its financial burden, the United State can begin to heal the open sore that is its
National Debt.
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