I understand this completely. But what i'm saying is it doesn't have to be this way. Of course it's not reality at the moment, because no one cares to follow the constitution and/or change things towards something that actually makes sense. It's absolutely ridiculous that congress needs to sell treasuries to raise money, when they can just create the money themselves. Congress just needs to change their policies & issue debt-free US dollars. It will put an end to this madness. It's really not that hard.
Creating money IS creating debt. They are no different. It is impossible to issue "debt-free" currency, as there is no such thing.
It's not impossible. It's been done: http://en.wikipedia.org/wiki/Moneta...n_of_debt-free_money_directly_from_government "Some governments have experimented in the past with debt-free government-created money independent of a bank. The American Colonies used the "Colonial Scrip" system prior to the Revolution, much to the praise of Benjamin Franklin. He believed it was the efforts of English bankers to revoke this government-issued money that caused the Revolution.[31] Abraham Lincoln used interest-free money created by the government to help the Union win the American Civil War.[32] He called these 'Greenbacks' "the greatest blessing the people of this republic ever had."
thalts a pile of bs. as gold is money and with digging new gold out of earth you create new debt ? Nope, you are diluting value of existing obligations.
You are (IMO) conflating too many concepts. Whether a currency is generated without a formal "interest" charge or not is irrelevant - the currency issued carries a debt obligation at least equal to its par value. And that is also a completely separate issue from debt incurred by a gov't spending more than it takes in as revenue. Lincoln hated Greenbacks. Greenbacks were, in fact, notes (ie, debt). He had them replaced by a national fiat currency. The Civil War left a massive debt legacy.
It sounds like we have some disagreements on what exactly is debt-free money. So I will word things differently: Congress needs to issue US dollars without the simultaneous creation of any debt obligations (ie. treasuries) associated with that issuance. This way the government will not be forced to return the US dollars plus interest to the holders of treasuries, because no treasuries would exist in the first place. I don't think I can make this any clearer and I won't explain this further.
It can disappear via taxation and govt destroying the money coming in via taxes. It's far better than being at the mercy of China, big banks, and rating agencies- and facing a default, govt shut down, etc. Besides, money can still be created via debt in the economy via the banking system. I'm just advocating that the govt not use debt for its funding.
If you create money to freely spend, at the same time tax money and destroy this, this is exactly what we have now. How is this different from the current system? It's not.