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US Federal debt
federal debt of the US
The measure of an economy is money. A large economy needs a larger supply of money than does a small economy. Therefore, a growing economy needs a growing supply of money. All money is a form of debt. Therefore, a growing economy requires a growing supply of debt. U. S. Federal Debt is the safest, most controllable form of debt. The federal government, alone among borrowers, never will default.
Thus, there is no federal debt or deficit problem, and a balanced federal budget leads to a recession or a depression.
U.S. Federal debt

The U.S. Federal debt is Federal Money.
The Effect of Taxation Is to Destroy Money

            When the federal government borrows, this increases the U.S. federal debt.  The federal debt is money.  Money  is created and added to our economy. What happens when you pay taxes?
            Assume your tax bill is $1 thousand. You send $1 thousand to the government. You become $1 thousand poorer, since you receive nothing in return.
            The government uses your money to pay the interest and principal on $1 thousand worth of U.S. federal debt, destroying the debt. When you pay $1 thousand in taxes, the amount of money in our economy is reduced by $1 thousand.
            Taxation has two monetary effects: to destroy money or to prevent the creation of money.
            (It also has a social purpose. Taxes on liquor and cigarettes are attempts to limit their use. The social purpose is irrelevant to this discussion, though the taxes themselves do hurt our economy.)
            When taxes pay for goods and services, the taxes substitute for the creation of the money that otherwise would have been needed to pay for those same goods and services.

Click the cover to see excerpts from "FREE MONEY."

What do these data tell you?
          1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
          1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
          1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
          1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
          1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
          1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
          1998-2001: U. S. Federal Debt reduced 9%.   Recession began 2001

           The sole effect of federal taxes is to destroy U.S. federal debt (money), and/or to prevent the creation of debt (money). A growing economy requires a growing supply of money.

            In general, does a large business need more money than a small business? The answer is obvious. General Motors must have more money to operate than does the corner tavern.
            Does a large economy require more money than a small economy? Again the answer is clear. The economy of the United States of America must have much more money to operate than does the economy of California, which in turn, must have more money than the economy of Peoria.
            In short, business is healthier in a growing economy, which requires the real supply of money (federal debt) to grow.
            Some may argue that while a growing economy requires the real supply of money to grow, this doesn't prove that a growing real supply of money causes the economy to grow.
            Increasing  federal debt won't always cause immediate growth. Depending on circumstances, a money infusion only may inhibit a decline or collapse. For that situation, a greater infusion of federal debt is needed.

To learn more about the U.S. Federal debt, read FREE MONEY by Rodger Mitchell.


Medicare: What is the Solution?

Read Letters to the Media

The Federal Debt is $8.5 Trillion!

Click the cover to see excerpts from "FREE MONEY."
CONTENTS OF THIS WEB SITE:
  1. Stagflation
  2. Federal Budget Deficit
  3. Social Security and Medicare Solutions
  4. National Debt Letters
  5. Federal Deficit Solution
  6. Concord Coalition.
  7. Balanced Federal Budget
  8. Federal Deficit Problem
  9. Federal Government Budget
  10. US National Debt
  11. National Debt Solution
  12. A Child In Arms
  13. Inflation and Stagflation
  14. Glossary of Economic Terms Debt, Money, Deficit, Spend, Owe
  15. U.S. National Debt
  16. US National Debt Clock

    The Interest Rate Fallacy | Social Security Solutions | Medicare Solutions | Economic Solutions | Recession |
    Federal Debt of the U.S. | Federal Budget Deficit | Stagflation | National Debt Letters | Federal Deficit Solution |
    Balanced Federal Budget | Federal Deficit Problem | Federal Government Budget | US National Debt | National Debt Solution |
    A Child In Arms | Glossary of Economic Terms Debt, Money, Deficit, Spend, Owe | US National Debt Clock |
    Inflation and Stagflation | Pseudoeconomics   | Money supply and the weather | The Relationship Between Gold and Money | Social Security Reform | Does Federal Debt Cause Inflation? | The 5 Myths That Damage Our Economy | 10 Reasons to Eliminate FICA | Rodger M. Mitchell -- Ideas |