From Zero Hedge:
…No government debt has ever been or can ever be repaid in full. This is especially the case when a government imposes a monopoly on what can be used as money by passing and enforcing “legal tender” laws. The US did this with the introduction of the Fed in 1913. Eventual default becomes an absolute certainty when government makes its own debt paper the ONLY “reserve” behind the “money” it alone can create. The US did this under President Nixon in 1971. The whole world went along with it because the US Dollar was the reserve currency and no government or people anywhere dared jettison it.
The result is the global financial quagmire we see everywhere we look…
It was the Brits who invented “national debt”. From Will and Ariel Durant’s The Story of Civilization:
…In January, 1693, Charles Montagu, first Earl of Halifax, as lord of the treasury, revolutionized governmental finance by persuading Parlaiment to float a public loan of 900,000 (pounds sterling), on which the government promised to to pay seven percent yearly. Toward the end of 1693, as expenditures were dangerously outrunning receipts, a group of bankers agreed to lend the government 1,200,000 (pounds sterling) at eight per cent, secured by an added duty on shipping. The idea of such incorporated lending had been suggested by William Patterson three years before. Montagu now gave it official support, and Parlaiment accepted the plan…The Age of Louis XIV, pg 304
Presto!, national debt was born. And if you go over to this site of the UK government, there is actually a chart of national debt running from 1692 until now – and the debt has never been paid off (as an aside, it was just about 25 years after national debt was created that government instituted the first bail out of “too big to fail” banks in the wake of the “South Seas” stock market bubble…a bubble created, in large part, by the easy money floating around due to government bonds and other financial chicanery).
At no time since the UK first figured out how to borrow and spend has Britain, as a State, been debt free. During all that time Britain rose from minor power off Europe’s coast to global empire and back to minor power off Europe’s coast…but the debt remains. And who benefits from this debt? The British people, or the banks able to make easy money and politicians able to buy votes?
I don’t think we’ll ever be able to get rid of government debt until we forbid our government from having debt. Debt is ruinous to nations no less than to people…and we can see from history that once a government is allowed to run up debt it will never stop doing so.
The United States government will take in about $2.2 trillion in fiscal year 2011. That should darn well be enough – whatever it is we want government to do should fit nicely in to that figure. And if there is something which doesn’t fit, then it shouldn’t be done. That is the budget – spend that much, and not a dollar more. Balance the budget and pay off the debt – for goodness sake, if we paid off our debt then that is $14 trillion which can be invested in other things…not just businesses, but all the stuff liberals are always yammering on about (its just a matter, liberals, of you investing your own money, instead of everyone else’s…).
Time for a change – time for a debt-free United States government.
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