Is the national debt really the most “Crushing” Debt?

Did you ever know of:

A farmer who lost a farm,
A neighbor who lost their home,
A merchant that lost a store,
Due to the current National Debt? $15 Trillion (est.)?

NO!

It’s the Private Debt that hurts us the most.
$50 Trillion!

Paying off the National Debt only:
Reduces the money supply, or
Creates a larger Private Debt!
The Interest on this HUGE and unpayable debt is added into the cost of everything we buy!

HOW COULD THIS BE?
“Money is Created when loans are issued and Debts incurred. Money is extinguished when loans are re-paid.” -Congressional Research Service

Russell L. Munk, Assistant General Counsel, U.S. Treasury explains it well. He wrote, “New money is created by offering loans to customers. A private commercial bank…can make roughly six dollars in loans for every one dollar in reserve…It simply makes book entries for its loan customers saying, “you have a deposit of six dollars with us.” Since the bank owns the new money while the customer has merely borrowed the money the bank does indeed get the benefit of the new money…money for paying interest on borrowed money comes from the same source as other money comes from…”

” MONEY THAT ONE BORROWER USES TO PAY INTEREST ON A LOAN HAS BEEN CREATED SOMEWHERE ELSE IN THE ECONOMY BY ANOTHER LOAN.”
- John M. Yetter Attorney-Advisor Dept. of the U. S. Treasury

The total debt, in 1990, was $13 trillion, this includes the household (consumer) debt, the business debt and the federal, state and local government debt. This doesn’t include the huge un-funded government liabilities. This amounts to $52,000 person or $208,000 for a family of four. That family’s share of servicing the interest load on that debt, at 6% would have been $12,480 per year. In 1990 the median family’s income was $40,000.

Currently, (2004) America’s total debt is $37 trillion dollars, or $128,560 per man woman and child. This comes to $514,240 for a family of four. Now the family’s share of servicing the interest load on this debt, at 6 percent, would be $30,854.40 per year. According the U.S. Dept. of Commerce the median family income is $43,500.

The total debt has grown $24 trillion, or $1.71 trillion per year since 1990. The additional interest load has grown by $102,600 billion a year since 1990. This means that the interest load for a family of four has increased by an average of $1,425 a year since 1990. If the debt keeps increasing at the same rate, by 2016 the median family’s share of servicing the interest cost will be $47,954.40.

The median family income has increased by $250 a year since 1990. If their income increases at the same rate their annual income, by 2016 will be $46,500. This means the Median family’s income will fall short of paying their share of the interest bill by $1,454.40 to say nothing about having any money for food and other things. The expanding interest load will have surpassed the total consumer income.

It has become very clear that we can’t borrow our way to prosperity.

It’s sad but the majority of the people don’t understand the (SINISTER NATURE OF INTEREST). Many understand they pay interest directly when making house, car and other installment plan payments. Very few however, realize that is only a small part of the interest bill they pay. They don’t realize that most businesses have huge debts and the interest on those debts is passed on to the consumer though higher prices. They don’t realize that the federal, state, county, city governments and school districts have huge debts, and that the interest on those debts is passed on to the consumer though higher taxes and fees.

“If all the bank loans were paid no one would have a bank deposit and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit, If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture the tragic absurdity of our hopeless position is almost incredible, but there it is. It (the banking problem) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.” Robert Hemphill Federal Reserve of Atlanta

The defects in our money system are that “The actual creation of money always involves the extension of credit by private commercial banks”. Russell Munk U.S. Treasury

Therefore there is no way to create the money needed to pay the interest, which is charged, on the extensions of credit. People clearly do not understand that all interest increases the debt owed, but does not increase the money supply! Therefore, this makes the total debt unpayable. The best we can do is, pass greater debt on to the next generation. Do you care about your children’s future? Do you care about this nation economic future?

As this debt, and the interest on it, grows it is obvious that the consumer has less and less discretionary income and businesses have less profit and more individuals, businesses, state and local governments will be forced into filing bankruptcy.