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Friday, January 21, 2011

Debt Ceiling Increase

The "national debt ceiling" will be raised soon. This is causing a lot of debate.

Of course Congress is going to raise the debt ceiling. What else do you expect them to do? Do you expect them to permanently shut down the Federal government and free all their slaves?

Due to the Compound Interest Paradox, an ever-growing national debt is necessary to keep the monetary scam going. The rules of the monetary system force an exponentially-growing national debt, lest the monetary system collapse in hyperdeflation during a severe recession/depression.

There's a contradiction in laws Congress passes. They pass law X, which requires/authorizes deficit spending at a certain rate. They pass law Y, which caps the debt limit. Those two laws are mutually contradictory. (There is some slight uncertainty, due to expected future tax receipts, but that's merely rounding noise in budget projections.)

The "national debt limit" law is a historic anomaly. At one time, Congress passed a separate law approving each Treasury debt auction. Then, they changed the law. Now, Congress sets a debt limit, but the Treasury Secretary may exercise discretion regarding each individual bond auction.

The Treasury Secretary may decide how much 1-year, 5-year, 30-year, etc. to auction, without approval from Congress for each auction. The "debt limit" law caps the total debt, but leaves discretion regarding each bond auction.

The "debt limit" law merely is a formality, creating an illusion of fiscal responsibility. Congress can increase the limit at any time.

Congress *MUST* keep raising the debt limit, due to the Compound Interest Paradox.

Due to the rules of the monetary system, the national debt must increase at an exponential rate. However, the rate of increase is increasing! I copied this debt table from Wikipedia.

YearDebt ($B)% Chg

Notice how the rate of national debt increase is increasing! That's an indication of coming hyperinflation.

State thugs have two conflicting goals. They want to steal as much as they can. They don't want to steal so much that the whole scam collapses. As the end of the State draws near, the short-term goal of "Steal as much as I can!" starts to outweigh "Prevent the whole scam from collapsing!"

The "national debt" is merely an accounting fiction. The "national debt" cannot be repaid, unless the rules of the monetary system are changed. The cost of the "national debt" is not deferred to the future. There is immediate inflation, as the Federal government purchases real goods and services via deficit spending.

"Interest payments on the national debt" is a huge tramsfer of wealth to the banksters. The banksters borrow from the Federal Reserve at 0%-0.25%, lend to the government at 1%-4%, and profit from the spread times huge leverage.

Of course Congress will raise the "national debt limit". Their only other choice is to give up, go home, and free their slaves. This dispute arises from a logical contradiction in the law. One law requires a certain spending rate. Other laws cap the national debt. Politicians will keep this contradiction, because is gives them an excuse to compromise and trade favors. Congressmen won't wreck their gravy train, by permanently shutting down the Federal government.


Anonymous said...

I have a friend debt ceiling.


Anonymous said...

I hear the truth and it is ugly.

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