3 Step Process to Eliminate the National Debt

April 27th, 2011 by Eric Cope

With the national debt getting ready to break through the $15 trillion mark, its worth noting that we can *easily* eliminate this current debt with 3 easy steps. I should note that this does not address Congress’ ridiculous spending and the deficit, but at least we don’t have the national debt.

  1. Eliminate the Federal Reserve
    We need to stop borrowing our own currency. There is no reason to borrow our own money when we inflate our currency. Additionally, we need to allow the market to dictate interest rates instead of the Fed inflating and stagflating our economy.
  2. Step up the Required Reserve Rate while issuing new currency without it being backed by debt
    Over the course of 4-5 years, we need to ratchet up the required reserve rate to 100%. To prevent hyper contraction of our economy due to a currency deflation, we would print money at the same rate as the reserve rate increase. This money would be placed in an account to buy back all money issued via debt issuance. The point of this step is to eliminate bank’s ability to inflate the money supply. We only print the money to ensure a relatively stable money supply.
  3. Require our new currency be backed by Gold
    The file step after the 4-5 year reserve rate adjustment, we need to tie our currency to gold or silver. We need to maintain our currency going forward and tying it to a precious metal is one of the best ways of doing so. It discourages politicians from printing freely to start wars or other ridiculous ways of taxing their constituents through inflation.
Posted in economics | 1 Comment »

One Response to “3 Step Process to Eliminate the National Debt”

  1. Chris Mahon says:

    Yes, getting rid of the Fed Reserve will go a long way to restraining government spending. Raising reserve rates is a good idea too, as the Bank for International Settlements (BIS) has now published higher reserve requirements for international transactions. Gold has become a popular hedge against coming inflation and central banks around the world are purchasing it as well. Gold back currency has shown throughout history to stand up during economic crisis’ and runs on financial institutions. What should be interesting is the move by the international financial community to remove the USD as the reserve currency and replacing it with special drawing rights (SDR) of a mix of currencies which will be maintained and regulated by the IMF. Even if the USD stays in the basket, it’s power and demand will be deluded (maybe 75%) and in the long run could be a good thing as it’s integrity needs to compete in a market. Great points!

    There’s a very good book on currency integrity and financial panics by Murray Rothbard, `The Panic of 1819′ the readers can download a PDF copy from my website @ http://ambidextrouscivicdiscourse.com/?page_id=90

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