let me just keep it short and simple: at least 25% of our GDP goes towards paying interest on debt. that's our money that falls into the banking cartel's hands. thats our sweat and blood that falls into the hands of people who produce nothing of tangible value. that's straight up slavery. in light of this, the mechanics of how the "beast" works is irrelevant. if you don't see this, then i'm not the one who's blind.
Well, even with the Fed funds rate at ~0.0%, the average interest rate on US govt debt is around 3.3%. If the Fed raised interest rates to a normal level of ~ 4%, the total interest payments would almost double two years after the rate hike, after all of the short term debt rolled over. This would cause deficit projections to increase by at least 40%. The question people need to ask is could we even afford the interest payments with our current rate of tax collections? And keep in mind that Social Security was insolvent last year ( paid more than it took in). Soon, Soc. Sec. will start redeeming those full faith and credit IOUs for the trust fund money that the gov't has already spent on other items.
this DOES make sense however, if russia can default on it's debt, so can the US! oh wait, they have oil and gas...
Right, I see... So I guess that means myself, as well as my elderly parents, are all members of this mysterious banking cartel then. 'Cause, guess what, I actually own some treasuries (mostly, TIPS, but also some conventionals) and so does my family. We are those evil people that receive our share of the GDP that goes towards paying interest on debt, aka your sweat and blood. I assure you, on the other hand, that I produce all sorts of things of tangible value, although it would depend on your definition of value. Now please do explain to me what is so horribly wrong about this? Why should I not receive interest on money I have personally earned and then lent to the US government? That's my sweat, blood and tears we're talking about here.
I don't think the U.S government should be allowed to borrow money to begin with, this whole system is horribly flawed and ready to break. There's nothing wrong with what your saying from a purely technical standpoint, but you have to bear in mind that a government can only steal. It doesn't earn, taxes are just a fancy word for piracy and thievary. This is why people are getting so angry over it as the system has finally been exposed for what it is. Now if the government were paying you back for money that they themselves earned then it would be another matter entirely, but that isn't the case at all.
Misthos, we have argued about this before. My view is that you're smelling the rat in the wrong place, but that's a different discussion. All I am saying in this here thread is that blaming the Fed for the US national debt is absurd. It's even more absurd to claim that by abolishing the Fed, the debt issue will somehow mysteriously disappear. Let me leave you with this chart:
The problem is not the federal reserve itself, the problem is our entire monetary system. The federal reserve however is making the system even worse by giving the government access to all this easy money which eventually is going to blow up in our faces.
there's nothing wrong with people lending each other money. people can't create money and can only earn it. but how fair is it, if i created money out of thin air, lent it to someone at interest, and pocketed the interest as my profit? (this is precisely what the private Fed does). the fed lends the principle and asks for the principle+interest. our money supply is composed of the lent principle. but the principle+interest is being sucked back into the Fed-which forces us to borrow exponentially more over time. as our debt levels go onwards to infinity, all our money supply will be used towards servicing the debt that the Fed created. in short, the borrower is servant to the lender, and we're all slaves to the people behind the Fed.