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Political science 101: Understanding the debt-ceiling crisis, part I

An explanation of what all of the ruckus was about in Washington. After the dust cleared from the debt-ceiling imbroglio, new borrowed money raised our debt to 100% of GDP.

1 Comments in Response to

Comment by Ed Price
Entered on:

Lots of words in the article. Here's the short version.

THE DEBT MUST GROW. It is a requirement of the banking system that we are in. There is no other way except to shut down the current banking system entirely and start over from scratch. WHY? Here's why.

All the money that there is in the whole country, including (especially) the Government money, was borrowed from the Federal Reserve Bank one way or another. ALL OF IT. 100%. And that's okay in itself, sort of. Because the Government can simply pay it back any time it wants.

Here is the problem. Where does Government get the money to pay the INTEREST? There is only one place Government gets money. It is through the loans from the bank. So they need to constantly borrow more if only to pay the interest.

Certain Government money transactions and investments make it look like Government gets money from other places. But if they do, these other places borrowed it from the banks. So it still needs to be repaid WITH INTEREST. So you need to borrow more money to pay the interest.

After you borrow money to pay the interest and use it all up doing so, where you get the money to repay the interest loan to say nothing about the money to pay the interest on the interest loan? Why, of course! Borrow some more. So you see, the debt must always increase.

Here's the clincher. The Fed prints the money out of thin air. And when it isn't necessary to print it, they simply make notations in their ledgers saying that it was done. THE BANKS ARE TAKING UP OWNERSHIP OF THE WORLD. AND OUR PRESIDENT AND CONGRESS ARE HELPING THEM DO IT.

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