Repudiate the Debt? To the Federal Reserve, yes.Submitted by Michael Nystrom on Fri, 07/08/2011 - 09:26
by Mary Stegmeir | Des Moines Register
Marshalltown, Ia. — Raising the debt ceiling would only weaken the nation’s economy, Ron Paul said during a campaign stop here on Wednesday.
Republicans and Democrats were scheduled to meet today during a White House summit devoted to the issue, but the Texas congressman has spent the last week touting his own solution to the government’s money woes: Forgive the debt the U.S. Treasury owes the Federal Reserve and chop $1.7 trillion from the nation’s sizable $14.4 trillion debt.
“It’s not the ultimate reform that’s needed, but it’s a start,” Paul told The Des Moines Register. “What we have is a situation where we essentially have a debt to ourselves. It doesn’t make a lot of sense, but it is counted in our deficit.”
Paul said Wednesday he had received little response from his peers in Congress about the idea, and economists are split on the proposal.