Debt…No Problem!

Currently the US national debt stands at $18,818,861,000,000 at the time of writing. Twenty TRILLION dollars! The interest alone is ONE TRILLION DOLLARS a year.

Debt clock

I never could understand economics in the way economists describe. It to me defies logic.

For instance, if we turned the debt back to traditional means in years long gone by, we could convert to barter. In its very simplified form….. that’s all money is…. a level of which to barter.

A farmer years ago used to get his produce to feed himself, and his logic was if he could grow more than he eats he could barter the rest. He needs a carpenter to fix his barn, and he pays the carpenter with food, or the baker, and the candlestick maker.

A simplified means of barter came when it was replaced with gold, although convenient for a while, became impractical because of the weight.  So the paper standard became the norm on the basis of those who printed the money could print no more than the value of gold in its bank.

When the Gold Standard was abandoned in favor of convertibility to ease money flow in the 1930’s, convertibility was then abandoned in 1971 by Richard Nixon and the US could print as much money as they wanted.

If you look at graphs as to when inflation exploded it starts in earnest in 1971.

File:U.S. Public and Private Debt as a % of GDP.jpg

In 1930 it was necessary to spend to get out of the depression, but a stagnation occurred between 1960 and 1970 which looked as though another depression was due.

The answer was to make the dollar free to print and ease all regulation. As you see from the graph the only way was up for costs.

On its own it probably would have been OK but for the fact that this creates a free for all answer to all problems…print more money!

So we now have the farmer that grows his produce, that in today’s age has to now feed himself, his family, and four more members of the country, before he has enough left over for the Carpenter.

At some point soon….. the farmer will not be able to sustain the costs involved and that industry will collapse.

Of course this is just an analogy….. but applies to any productive trade. Production by anyone is getting bogged down by the hangers on that are in form of students, the old, infirm, Government and armies.

And as I publish this piece the debt now stands at :-$18,818,868,500,000. And it only took half an hour to write.

 

 

 

 

 

 

 

 

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