Monetizing Debt: An Evasive Maneuver Essay

The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an

In the book Hamilton’s Blessing, Gordon uses economic history and theory to explore the start, rise and decline of the United States debt. Gordon opens his book by stating that this country was born in debt, and this debt has become so high that concerned individuals no longer think of it. Throughout the book, he traces the history of the national debt dating back from 1791, when the central bank of the United States was created, up to modern days. The intellectual architect of this creation was Alexander Hamilton, the first Treasury Secretary as well as a central figure who had a deep impact on the economic development of the United States. The title of the book clearly recalls Hamilton's statement that a national debt, "if not excessive,

The recent clash between the president and congress about raising the debt ceiling made the front page on every newspaper throughout the country and generated controversy of unimaginable proportion among the citizens of the United States of America (College for Financial Planning). No macroeconomics issue is more controversial today than the impact of large public debt on the economy and on future generations, but, however, there appears to be a huge disconnect between professional, political leaders, and the ordinary public about the national debt and its impact on the current and future

“Ten Trillion and Counting,” presented by Frontline provides quite a picture of America’s national debt as it surpasses the trillion dollar mark. They ponder the financial well being of current and future retirees while also exposing on how America got into this mess, and what the Obama administration plans to do during his term. America is able to close the gap year to year in its national budget by selling bonds and T-bills. Foreigner countries who continually purchase these obligations are beginning to grow. Much like the Bush administration, the Obama administration has started borrowing big with plans to cut the budget years down the road. It is clear for anyone to see that this borrowing and the future promises of cutting cannot go

The idea that the Federal government should have to pay off all of the domestic and international debt at full value was a bold proposition by Hamilton. This idea would establish good credit for the new central government. He planned to withdraw from the “old depreciated obligations” by beginning to borrow new money at a lower interest rate (McNeil and Mintz 2015). In order to raise money to pay off the debts, Hamilton issued “new securities bonds.” Now, “investors who had purchased these public securities could make enormous profits when the time came for the United States to pay off these new debts” (Wood

“At the time we were funding our national debt, we heard much about “a public debt being a public blessing,” Thomas Jefferson on value of the public debt. The idea about “funding the public debt was good for the country,” was constantly rejected by the Democratic-Republic party, they also believed that the plan for a national bank was completely unconstitutional. The party was appalled when they found out Hamilton was using the public debt to solidify his party. Alexander Hamilton created the Funding Act of 1790, this authorized the government to give the states “loans” for their war debts. Then he proposed the idea to create a national bank, he believed that with the national bank he could pay of the war debts, raise money for the country, and create a common currency. Democratic nominee Hillary Clinton’s stance on this subject is to raise taxes on the wealthy, she claims that this will not increase the national debt. But, some politicians are skeptical of Clinton's plan, they believe that, although it would increase the debt it would also make about the same in profit. The Democratic-Republicans also deemed this unconstitutional, for this subject I believe that the Americans of 2016 would have voted for the Democratic-Republican party. Mostly because, today our debt is still rising, even though the national bank and paying our debt off, has been established since Hamilton created the act.

We hear about the debt almost every day: news talks about it, politicians argue about it, even President Obama gives speeches on it. So what is the significance behind it? In this article I am going to explain briefly what the national debt is, how big it is, and what it has to do with us.

The United States has adopted a persona of uncontrollable spending policies, and short term solutions. As the spending trajectory continues in a downward spiral, fueled by unsustainable policies, and current tax revenues, the national debt continues to grow. For many years, the United States has implemented policies that failed to address mandatory spending costs, which, unfortunately continue to outpace the national economy. Furthermore, Congress has created a habit of introducing short term solutions in order to confront a long term issue of national debt. Although, there are many driving forces behind the U.S. fiscal problem, mandatory spending

It has become common to dismiss that there ever will be a United States with a national surplus. Imagine a United States that can fund every government program such as Medicare, Social Security and Welfare. A U.S. with an ample amount of money and capital so that it can add to a defense budget and raise the salaries of every military member. It is often said that America is past redemption because the current reality of America is that there is a national debt crisis that is in the trillion and is growing each second we do not solve the problem. While they rarely admit as much, American citizens often take for granted the government programs that many of them rely on to survive. The consequence that America’s

Audience: The audience of this paper is for two people. One, for the people of the United States that deal with the consequences of a large federal deficit, and two for the lawmakers in Congress that have the ability to change the situation.

Self preservation is human nature. At the very core of human civilization is the desire to survive above all of entities. Human are selfish beings that are focused primarily on protecting their interest before others. Those with the financial means to achieve preservation will be more successful in doing so. The United States of America began to accrue debt after the Revolutionary War, and since then, it has acquired over 17 trillion dollars in debt; the majority of which is due to the federal government's tendency to spend more than it has collected in revenue. In general, the existence of debt creates a higher cost of living for American citizens, slower wage growth across all economic classes, generational inequality, and the potential for a paralyzing fiscal crises. For these reasons, it is imperative that the federal government seek solutions to reducing the deficit, while protecting the interests of the wealthy members

department of Treasury emphasizes the importance of consistently having a constant limit on the national debt. “Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents.” None of which have been successful. The national budget allows for financial growth within the US and ensures that the debt does not get too out of control. Similar to credit cards having limits on how much can be spent for individuals the government must do the same. The pros outweigh the cons and the only rational conclusion to affirm is that the national debt must be limited and contained. Thus, the solution to this national debt problem is through increasing taxes, real spending cuts, accountability, efficiency, jobs, economic growth, financial stability and cut personal debt. Increasing taxes may seem problematic in the short term but looking at cost benefit analysis the simple way to solve the on going issue. The long term effects are much greater than the temporary issues that may

The U.S. Treasury bond is a low interest way for the government to borrow money. The bond, along with Treasury notes and bills, form the Securities which the Federal government borrows from lenders for a set amount of time. Issued by the Department of the Public Debt, a subset of the US Treasury, they are usually issued in 30-year maturities which pay interest twice yearly. Because the debt obligation is backed by the tax-generating, money printing, and understandably trusted government of the United States, bonds are generally considered to be a safe or virtually no-risk investment. Thanks to this low risk attribute however, bonds are regarded as very low-yield security, which is exactly why it is a good instrument for the United States government to employ, as long as it can turn a relatively decent profit on the initial investment. According to the September 30th, 2014 report of Monthly Statement of the Public Debt of the United States, the amount of Treasury Bonds outstanding totaled $8,167,759 million, I’ll call it roughly $8.2 trillion. This number composes the majority of the combined $12.7 trillion of US Treasury securities outstanding. These securities outstanding are also known as the national debt. The numbers listed above, and throughout this paper will disregard debt being owed to intra-governmental holdings of the US, as bonds make up a minuscule (in comparison, only $7.6 million) fraction of what they

America's fiscal policy is regarded as unsustainable because borrowing has both explicit and implicit costs associated with it. The explicit costs are the interest payments we make on the national debt. According to The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform, we will pay $226 billion in net interest and projects that to rise to $938 billion by 2020. Also, if you add the interest payments over the next ten years, it amounts to a staggering $5.76 trillion dollars (2010). That is more than one-third of the present-day GDP and threatens to keep getting larger. This brings us to the implicit costs. The $5.76 trillion we are projected to spend on debt interest is empty spending. It does not provide anything to the nation's future and forces us to forgo spending it in ways that would have resulted in a positive return, such as: education, energy and technology. To make matters worse, more than 50% of our debt is not owned by Americans but by foreign lenders (Murphy, 2010). In other words, less than half of the interest payments go to American lenders who are likely to spend it domestically and strengthen the economy, another implicit cost.

The National Government of a country can be immensely compared to a complex business. Whether it 's developing a nation 's annual budget, analyzing deficits or surpluses, accumulating government liabilities, or outsourcing to investors, the governments of all nations have and will continue to run like any other successful business. In the case of a country, the economic, societal, foreign, military, and national strengths, are relying on the influence of a business mentality throughout the nations’ core government officials. Monetary liabilities, loans, or debts accumulated, contribute to the expansion, reconstruction, and continued stability of a country if accumulated with the proper intentions. The United States of America historically exemplified what it means to be a successful business, ultimately making proper business decisions in order to maintain economic and international stability. Maintaining the various structures of a powerful country, such as the United States, requires a surplus of funds that at times, are unavailable to the government. Throughout the history of the U.S, whether in order to fund wars, public programs, or to stabilize the economy, the Nation has obtained Trillions of dollars in debt. Although historically successful in maintaining a thriving economic state, the monetary liabilities of the United States, a result of continuous overspending or budget deficits’, consists of publicly held debt and intragovernmental debt, which recently has played