This is what we have now. Money gets destroyed when treasuries, the IOU issued by government, are paid in full after maturity.
It's very different in that the govt will never have to face a bankruptcy or a shutdown because treasury obligations can't be met. There won't be treasuries if the govt creates the money. Furthermore it significantly reduces the misery that the people of this country face due to progressively increasing taxation caused by the govt unable to service their exponentially rising debt levels.
At the moment treasury obligations cant be met, the system shift from debt-based, to weimar germany hyperinflation. This is because the component of money destruction disappears. Your system is exactly what we have now. It's not a bad system, untill youlet the debt grow more than the GDP grows. After this it's just stealing from the future.
It won't be a weimar style hyperinflation if the govt is responsible with its size / spending and taxes + destroys money properly. The problem is the quantity of money in the system, which can be scientifically managed. Nevertheless, irresponsible behavior and the risk of hyperinflation does exist with both systems- however the big difference being that in the current system the govt has the very real possibility of shutting down due to not being able to raise money to meet its obligations- leaving anarchy, millions of poor & elderly in a dire situation, etc.
We already have your system in place. Abuse is prone to happen because of how politics work. Both parties are keynesian in nature, but not truly Keynesian since they dont or are unable to create higher taxes in times of growth. Since your system and our current system is the same, I don't see how theres gonna be less abuse.
Basically your system is the same, I believe it only lacks interest. But in essence its the same system as what we have now. Indeed in both system you will have abuse. I think its impossible to avoid the abuse. The more abuse, the bigger the recessions in the future. But we have been doing this abuse since 1980. So expect a depression, bigger than in 1930. Because the abuse in 1920-1930 wasnt nearly as bad. I agree it is scientifically possible, a system with moderate inflation by creating a bit more money than you destroy, is what we had in 1950-1970. That was the best period of USA probably. After the unnecessary vietnam war it just went downhill.
Regardless of what system is in place, abuse is always possible. Creating money without debt is better (and I would say significantly better) because the govt does not have to face a shut down leaving anarchy and millions of poor / elderly destitute. Bottom line, we don't need to be at the mercy of rating agencies, big banks, and China. The govt shouldn't have to worry about not being able to fund itself. The govt shouldn't have to worry about the debt markets and abuse due to high interest rates on treasury debt and/or not being able to raise money. It's ridiculous to have this layer of complexity on money- it is not necessary, and it gives too much power to big banks to hold the public hostage <- this I think is the biggest benefit of having debt-free money. It's about being independent & free. As Thomas Jefferson said: "I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt." So a debt-free money system (for the government at least) will always be better. Banks can still exist and issue debt and create money that way.
1. China/etc are been paid with a lower-valued dollar-- It was in the benefit of the US to have issued those past loans, as long as the inflation rate is higher than the interest rate. 2. Your argument about inflation due to printing dollars, and taxation to fight it, is a circular reasoning: Inflation is a flat tax, and if you fight it with another tax, you are double taxing (a flat tax for flat tax for middle class, and less tax for the rich as their living cost is less in proportion to their income). 3. Printing dollars would make sense in a deflation environment, because wages can rise in value, and also (outside) lenders would gain. I believe that Bernanke's thinking seems to have been in a deflation fight, but I think he has misjudged and overprinted by a large factor than never to fight deflation. 4. If there is overprinting, one ends up overall taxing the middle which may hurt the economy, and reduce revenues, which can then set a negative cycle. Note that external lenders, and internal savers lose (as the tax is applied even to lenders in China), while higher income/rich gain in this situation (because the tax is flat). 5. The economy is possibly in mode 4 (Bernanke has over printed, and may have hurt the economy). The middle class would need to be taxed less (so the printing has to stop). This is not to be generous to the middle class, but because printing would be hurting the overall revenues. Taxes should come from higher income earners, who would benefit later if the economy expands and would lose if things continue as they are. So it is a win-win-win situation if taxes are raised for higher income/rich, and lose-lose-lose if things continue as they are. (The three parties in win-win-win and lose-lose-lose are middle class, rich, and government).
All valid points. Regarding point #2, there will not be a double tax if there is no inflation, if tax policy is implemented in a way to prevent inflation in the first place. To prevent inflation, money is being destroyed simultaneously as its being created. We currently have a triple tax in place: interest on debt, inflation, and taxes. The key issue in your post is the problem of the quantity of money in circulation and the requirement that money gets distributed properly in the economy. We have these problems even today with the current system. I am no expert in these issues. The author of www.perfecteconomy.com claims to have come up with a solution to these problems. I'm just advocating eliminating the requirement for the govt to issue treasuries to in order to raise money. I think this system will be far better than what we have today, though it will still have its challenges.
shitcan the fed,abolish private banking,government takes over the banks ,the interest,the profits ,they have already taken over the debt, ....PROBLEM SOLVED...