0 votes

Q: why on earth did the Constitution allow for the gov't to borrow money?

This thought came to me today:

When a government borrows money, how on earth will it ever be able to pay it back as it doesn't engage in any productive activities??

Am I missing something? Is there a solid reason why the framers allowed for this?



Trending on the Web

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

Hamilton...

and he knew exactly what he was doing !

I have a thought I keep close to my heart every day ..
"Ron Paul will win in the most spectacular way!!!"

"I think we are living in a world of lies: lies that don't even know they are lies, because they are the children and grandchildren of lies." ~ Chris Floyd

We should celebrate

Aaron Burr day as a national holiday.

--------------------------------
"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
----------------------------

-----

ha ha

Detective Krum Investigates:
http://victory1project.wordpress.com/

think about this.

If the congress issued the money and regulated the value thereof ie; LOANED it to the banks, instead of borrowing it from them and prohibited the banks from creating credit or using fractional reserves, then we would have a substantial income stream as a country. More than enough to cover our needs and no burden on the people.

Are you saying that the State wouldn't need to loan?

If so, that's great!

THIS IS MPE

What you suggest is basically what mathematically perfected economy is, except that there's no need to loan any money to banks, because there's no need for banks or the so called Federal Reserve, or any need to borrow money at interest -- because we the government certify our debts to each other in the one currency and monetary prescription by which we *can* certify our debts to each other without extrinsic and unjustified cost (interest).

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Excellent

Excellent reply. You're right and if we the people as the government have an income stream what need is there for tax burdens?

Detective Krum Investigates:
http://victory1project.wordpress.com/

I saw an interesting idea for a non-gold monetary system.

It does away with the Federal Reserve but is still a paper money system. Basicly it allows the Federal Government to print it's own money. Why is that better then what we have today? Because it eliminated the debt. Let the government (Congress) print as much money as it wants to make up the difference between what they take in and what they spend. The result would show up directly in inflation. The difference is there would be no intrest on a debt that the Federal Reserve created out of thin air.

Not as good as a gold standard but at least it puts the control in the peoples hands through the Congress.

Suggestion FAILS in many respects that MPE alone Succeeds

Here is my refutation of the system you suggest:

http://perfecteconomy.com/pg-fatal-faults-of-american-moneta...

The idea is old (I evaluated and invalidated it 35 years ago). There is no need to suffer the upsetting ramifications of inflation; and no costs are actually saved. The ideal principles and their opposed proposition are illustrated in our Parable of Perfect Economy:

http://perfecteconomy.com/pg-parable-of-perfect-economy.html

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

What Control?

PS.

Various advocates of that invalidated proposition do or do not advocate trying to solve inflation/deflation. The first article I pointed you to addresses both cases; and that it is impossible to do so.

But mathematically perfected economy accomplishes all the goals of the proposition *without* administrative bureaucracy, why forfeit a currency which guarantees to maintain a circulation with consistent value (as does MPE)?

What you advocate thus forfeits control of inflation, deflation, and the power otherwise to deliver a currency which retains its value across its whole lifespan.

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Financing the Revolution

The principal problem facing the founders, and one which they more or less were condemned to by the circumstances, was that they had to finance the revolution. In other words, the fact they were forced to borrow the money from sources outside of even whatever system they might devise, forced them to bargain with the terms of the provider (France).

Only a country which produces all of its own military needs can ever afford to do otherwise.

If on the other hand they had solved inflation and deflation, and had perfected their prospective monetary system of interest, then alone could they have forbidden the government of borrowing money at interest -- which of course is quite different from borrowing money [sans interest] itself.

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Hamilton the key?

This sounds like a very Hamiltonian concept, as Hamilton was a big Federal guy (as opposed to a States guy like Jefferson). You might peruse the Federalist Papers to seek your answer.

Yeah..there was a lot of

Yeah..there was a lot of debate on it at the time, and you can read about it in the history..its prohibition almost got included, but didn't. However, a balanced budget was always supposed to be part of the President's duties...

Borrowing itself

is not a problem. It's that they (not the Founders, but later officials) created the Federal Reserve, which allows them virtually unlimited borrowing through monetization of the debt. If they can just print money to pay off debts, then there is no restraint.

--------
Dr. Paul says Barr is an ally (http://www.newsweek.com/id/139448/page/1)
and would do "a very good job" as president (http://www.youtube.com/watch?v=H5YaqKf-yTg).

Why isn't "limited" borrowing a problem?

If the State by its nature doesn't engage in production, it follows that it can only pay off the debt by stealing from it's citizens.

But, stealing is a necessary evil

as are lots of other evil things. Government itself is a necessary evil (I think either Jefferson or Paine said that). That's why the aim is to keep it at a minimum.

That is, unless you think anarchism could protect freedom, which I don't.

--------
Dr. Paul says Barr is an ally (http://www.newsweek.com/id/139448/page/1)
and would do "a very good job" as president (http://www.youtube.com/watch?v=H5YaqKf-yTg).

Equitable Borrowing AND Taxation

Yes, but if a government issues the money for instance to build a bridge, then charges those who consume/use of the bridge according to their usage, then in effect the government assumes on behalf of the future users of the bridge, a debt equal to the costs of its production.

If the bridge is crossed by fossil-fuel-motorized traffic, then a tax on fuel can distribute the costs of transportation infrastructure equitably, and without administrative overhead of the kind we associate with income taxes.

Everyone pays for just what they use/consume, without multiplying debt or costs by interest.

This is how it's done in mathematically perfected economy.

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Regards,

mike montagne -- founder of PEOPLE For Mathematically Perfected Economy, and author of mathematically perfected economy (1979)

http://www.perfecteconomy.com/

Equitable taxation??

I didn't know that theft was as you so describe...