Paying off debt
> Under the current private bank owned money system the national debt will never be paid off. It's impossible. You need ever more private bank owned money to pay the interest therefore the balance only gets larger all of the time.
You'd have to explain that... I can't follow it.
I don't see any reason why it would be impossible to pay of the national debt, but I tend to agree that won't happen. But my reasoning goes more along the lines of "leveraging"... You can reach a point where it's more beneficial to maintain a debt and use that money elsewhere, as opposed to paying off that debt.
However, that only happens when you have an excellent credit rating, and your debt is firmly in control. We as a country are now more like the people who financed their lifestyles using credit cards, and then found themselves drowning in credit card debt.
The current games Congress is playing don't help. If we actually default, then our credit rating goes down, our interest rates go up, and we begin jumping into the same inescapable trap that lots of people got themselves into with their credit cards. Maybe they could have paid off their credit cards at that original 9.99% interest, but when it jumped up to 19.99%, then 29.99%, forget it.
And now that the national debt has apparently become a "political football", we can expect other countries to be even more leery of the US than they have been lately. That definitely won't be conducive toward keeping the dollar as the world currency.
Paying off debt
Under our monetary system, money arises out of debt obligations. Whenever you get a loan out of the bank the money to fund the loan is created by the bank. This sounds crazy but it is true. Debt carries interest, therefore you need more debt money in order to pay the principle and interest. This is the reason why it takes ever increasing money supply to pay the debt and creating more money creates more debt.
In 1950 $5,000 per year was a low middle class salary. Now $50,000 per year is a low middle class salary. In 50 years $500,000 will probably be a low middle class salary. It is inevitable under our current monetary system.
We have a fractional reserve banking system. A bank which has a deposit of $1,000 at the Federal Reserve Bank can loan 9 times that amount or $9,000. The bank creates that $9,000 from nothing. When the borrower pays someone with the $9000 to another bank and deposits it, that bank can loan a new $8,000 and so on. This is where money comes from. I think well over 90% of money is simply a ledger entry; actual paper notes only account for a very small percentage.
Look up Money as Debt on youtube. It explains the banking system.
The current system grew out of the European need for easy credit to finance their expansion. Perhaps it made sense for them. Now that we are no longer expanding we need a new system which better fits our current circumstances. And no, the gold standard is not it.
Paying off debt
>I can see a situation where the treasury can be authorized by Congress to issue new debt, but they can't find a market to sell it.
Yep, particularly if we do not raise the debt ceiling and end up defaulting on our debt (worst case) or not paying promptly (best case) as a result.
Either way, lenders will not want that risk and the market for our debt will indeed dry up - and either way, the ripple effect beyond that will be ugly as it works its way through financial markets.
Yet for whatever reason, there are folks who evidently consider defaulting on obligations and destroying markets, slamming doors, taking options off the table and burning bridges to be a wise and prudent thing in the name of ideology.
