How Do You Solve Our Ballooning National Debt Problem?

Everyone is talking about the national debt which is a longer term problem. The real problem that is here and now is the liquidity problems we have been having in the REPO market. What is only supposed to happen once every billion years has happened two times since September. The fed stepped in to stabilize which is concerning. Bandaids are being put on a problem and no one seems to care.
 

Ruger#3

RAMBLIN MOD
Staff member
 
Interesting read.
So why not cancel most/all of our debt. The benefits may well outweigh the negative.
It can if it wants. They can hold the debt on the balance sheet for infinity (rolling over the bonds when maturity comes). Now is it a good idea to do that? The concern would be hyperinflation. Japan has been battling this longer than we have and their debt problems makes ours look like peanuts. They have started canceling some debt. I guess will see how that works out.
 

jimbo4116

Retired Moderator
Interesting read.
So why not cancel most/all of our debt. The benefits may well outweigh the negative.
We owe most of it to ourselves anyway.

That said, if we cancel (reneg on) our debt who will we sucker into financing our 4 trillion dollar and growing annual budget with its 1,000,000,000,000.00 deficit.
 

Lukikus2

Senior Member
Everyone is talking about the national debt which is a longer term problem. The real problem that is here and now is the liquidity problems we have been having in the REPO market. What is only supposed to happen once every billion years has happened two times since September. The fed stepped in to stabilize which is concerning. Bandaids are being put on a problem and no one seems to care.
Anything to do with Santander? Rip off financial institutions?
 
Anything to do with Santander? Rip off financial institutions?
I don't know what it has to do with, but it sounds like overnight borrowing has been struggling. One of the theories was that a financial institution might have been in trouble which there have been some in Europe. Who knows? I just don't think people realize that the REPO market is basically what makes our country operate on a daily basis and it had problems not once but twice in a 4 month period. If the trillion dollars that bounces back and forth in that market on daily basis can't happen then banks, hedge funds, etc. have no money to operate. Scary stuff.
 

Nicodemus

FREELANCE ADMINISTRATOR
Staff member
Is there even enough gold and other precious metals on earth to cover such a debt?
 
Is there even enough gold and other precious metals on earth to cover such a debt?
I think we are way past any type of repayment. The solution the world seems to be gravitating towards are negative rates and central banks buying more of its country's debt and forgiving the debt. Japan has been doing this for a while so will see how it works for them.
 
Thread starter #53
I don't know what it has to do with, but it sounds like overnight borrowing has been struggling. One of the theories was that a financial institution might have been in trouble which there have been some in Europe. Who knows? I just don't think people realize that the REPO market is basically what makes our country operate on a daily basis and it had problems not once but twice in a 4 month period. If the trillion dollars that bounces back and forth in that market on daily basis can't happen then banks, hedge funds, etc. have no money to operate. Scary stuff.
The Fed has been funding the shortfall on the repo market almost daily. That's because the banks haven't been lending to each other.
 
The Fed has been funding the shortfall on the repo market almost daily. That's because the banks haven't been lending to each other.
My understanding was that the fed had been doing this consistently since September and their balance sheet is back to all time highs but there were two overnight rate spikes in September and December. They had excuses for the September spike which I didn’t believe. If the excuses would have been true we it would have been a one time even and it wasn’t. So the concern I have is why the banks aren’t lending. Reminds me of Lehman brothers going to the repo market and not able to get capital because the banks knew they were done. Is something brewing like that.
 
We owe most of it to ourselves anyway.

That said, if we cancel (reneg on) our debt who will we sucker into financing our 4 trillion dollar and growing annual budget with its 1,000,000,000,000.00 deficit.
Both of those points are addressed by Rothbard.
 
Simple. Devalue the dollar and pay it back with worthless money. Only advantage of hyperinflation is it makes debt worthless.
and it makes any saved currency worthless too. It would be worse than the Depression ever was. Unemployment of 25% would be mild compared to what you would have going on then. The gooberment wouldn't be able to pay any benefits, and if they did, the $$$$ would be so worthless that they wouldn't be fit for anything but kindling for the fire
 
and it makes any saved currency worthless too. It would be worse than the Depression ever was. Unemployment of 25% would be mild compared to what you would have going on then. The gooberment wouldn't be able to pay any benefits, and if they did, the $$$$ would be so worthless that they wouldn't be fit for anything but kindling for the fire
I agree. I'm just saying, I think lax economic policy is going to eventually lead to hyperinflation and the debt will be the least of our problems.
 
I agree. I'm just saying, I think lax economic policy is going to eventually lead to hyperinflation and the debt will be the least of our problems.
The experts say you should see hyperinflation, but it's not happening in the world. When compared to GDP Europe and Japan print way more money and the inflation has been in check.
 
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