Save for the Social Security Trust Fund and Federal Reserve Bank, creditors, particularly foreign governments, would be paid off and their creditor status and risk assumed by the American public. American public land-secured money would not commingle with currency in general circulation another lesson gleaned from the French experience.Ī second approach would harness the U.S. The U.S Treasury or Federal Reserve Bank would redeem representative money in fiat dollars for the sole purpose of retiring the National Debt, and funding or reimbursing funding for stimulus packages and bailouts. This process does not constitute a sale of public land, in part because representative money is not essentially redeemable as the American historical record demonstrates (see below). With the benefit of hindsight, a single issue of representative money, backed by American public lands, approximately 700 million acres (1/8 continental United States) with attendant mineral and other natural resources, can be used to amortize relevant portions of the National Debt An appraisal of $10,000 per acre yields $7 trillion. For, though Church lands in France were appraised at $1 trillion, the government serially issued $9.5 trillion in assignats leading to hyperinflation and depreciation. Afterwards, the country succumbed to moral hazard. The new currency was initially used to successfully retire a significant portion of the public debt. Domestic and international creditors accepted the new currency as legitimate payment. In response, Church lands were expropriated throughout France (1/3 of all lands) and paper currency (assignats), not based on gold or silver, but on the security of Church lands, was issued. France’s public debt totaled several trillion dollars. In 1790, the nascent French regime inherited a debt dilemma similar to America’s today.
Historical Precedent and Current Course of Action This solution requires no borrowing or additional taxation, nor risks hyper-inflation and currency depreciation with over-issued fiat money. The remainder funds or reimburses funds for bailouts, stimulus packages and other contingencies. To counterbalance massive liabilities one must examine America’s balance sheet, identify a real asset of sufficient magnitude to back several trillion dollars of representative money, and use part of this sum to amortize or repurchase relevant portions of the National Debt. Liabilities include a $12 trillion national debt with debt interest payments exceeding $3.5 trillion per decade and an increase in the National Debt of $9.8 trillion dollars, based upon projected federal operating deficits over the next ten years. For example, the bailout and stimulus packages, operating deficits, national debt, and national debt interest payments all stem from the liabilities column of America’s balance sheet. Suitably framed, the financial crisis facing America is an accounting one before an economic one a balance sheet problem involving America’s overarching assets and liabilities, before the administration of traditional fiscal and monetary policies. Employ new income to amortize or re-purchase relevant portions of the national debt, fund or reimburse funds for stimulus packages, bailouts, and additional initiatives as warranted.
Utilize real asset on America’s balance sheet to generate several trillion dollars of representative money.
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