The federal government’s debt has now reached the new threshold of $17 trillion. This graphic found at Richochet via Bad Blue is not very scientific but it does illustrate where our nation stands very well.
That is a scary graphic, isn’t it? But, conservatives/libertarians can stop worrying (they are the only Americans who do worry about our mountain of debt). Democratic Congressman Alan Grayson has a solution to America’s debt problem. Well, more precisely, he has a partial solution; but that’s only because the man thinks small.
Congressman Grayson writes:
A simple solution to the impasse is as follows: Federal Reserve Chairman Ben Bernanke should simply cancel the Treasury debt that it owns. The government can just forgive the government’s debt.
This wouldn’t solve the debt problem entirely. The Federal Reserve doesn’t own all U.S. government debt; it owns only roughly $2 trillion of it. (Well $2,076,927,000,000.00, as of last Wednesday, but who’s counting?)
I guess that’s why we call these people “elites”. They are just so much smarter than the rest of us. The Congressman doesn’t take credit for this brilliant idea. He says he got it from former Congressman Ron Paul. Really? I suspect Grayson took something Paul said out of context. Even so, what he is suggesting could, in fact, be done. The Federal Reserve, a semi-private entity, does operate a cost. For example, the US government pays the Federal Reserve for currency. At some point each year the Federal Reserve returns that money to the USG; less their operating costs. They could do the same thing with the interest payments from the Treasury on the bonds that the Fed has bought. So yes, theoretically the Fed could just forgive the $2 trillion in US debt and we would be back to “only” having a debt of $15 trillion. President Obama would be an instant hero! But why does Congressman Grayson think so small? Why not have the Federal Reserve buy all of our new bond issue and then forgive all of deficit spending? Or, why not have the Fed buy even more bonds and the our government could payoff China and Japan and everyone else holding US Bonds? We would not only have a balanced budget but our national debt would be zero and Social Security and Medicare would be solvent again. Congressman Grayson has come up with the ultimate Free Lunch! I wonder why the Republicans couldn’t have thought of this? I guess the progressives really are smarter than anyone else.
Well, that’s what I’m thinking. What are your thoughts?
Asylum Watch 
Perhaps the Fed can forgive my debt? Nah, I’m not a member of the elite.
Forgive your debt! Are you crazy! You have to keep borrowing to pay for the parasites.
Gee whiz, how simply obvious. With the $2 Trillion forgiven the true genius of Obama’s economic policies would be revealed and heralded in the MSM calling for more of the same. The more we spend the more is forgiven. Once SS and medicare are solvent the O man and congress can once again raid those proverbial untouchable lockboxes. Thanks for posting this Jim. I thought the only laugh for today would be the health care maven’s speech at 11:25am featuring his refusing to accept the OC flaws and getting the darn thing fixed posthaste. Will he have all 400,000+ who “signed up” on stage with him?
In other breaking economic news 49 states are reporting a rise in poverty in their states. Again we see the genius of his fiscally responsible policies. Four more years…uhm uhm uhm.
Vasaline, Peter. Buy lots of Vaasaline.
Hmmm…..which idea do I like better? This one or what Minnesota Congressman Keith Ellison said?
“Ellison was discussing his “Inclusive Prosperity Act” measure at the July 25th Progressive Democrats of America roundtable in Washington.
“The bottom line is we’re not broke, there’s plenty of money, it’s just the government doesn’t have it,” Ellison continued, “The government has a right, the government and the people of the United States have a right to run the programs of the United States. Health, welfare, housing – all these things.”
The “Inclusive Prosperity Act” would levy a sales tax on the trading of stocks, bonds and derivatives.” http://pjmedia.com/lifestyle/2013/08/03/theres-plenty-of-money-its-just-the-government-doesnt-have-it-congressman-keith-ellison/
The government forgives its own debt and then just steals more money from the People….cause they have a RIGHT don’t ya know…. 😉
The snowball has been getting bigger and bigger since 1913, Laura. It’s getting harder and harder to stay out of the way. 😦
CoF
“Well, I stand up next to a mountain
And I chop it down with the edge of my hand
Yeah
Im a voodoo child baby
I dont take no for an answer”
Hendrix ‘Voodoo Child’
“Doesn’t matter what the press says. Doesn’t matter what the politicians or the mobs say. Doesn’t matter if the whole country decides that something wrong is something right. This nation was founded on one principle above all else: the requirement that we stand up for what we believe, no matter the odds or the consequences. When the mob and the press and the whole world tell you to move, your job is to plant yourself like a tree beside the river of truth, and tell the whole world — “No, you move.”
Captain America
“All mankind is divided into three classes: those that are immovable, those that are movable, and those that move.”
Benjamin Franklin
Let us plant ourselves in the path of that snowball;
Standing firm on the rock of truth and equality;
Wielding the sword of liberty, freedom, and justice;
We shall destroy their tyrannical rule and chains of slavery.
That’s the spirit, Laura! I’d like to be around to help pick up the pieces, but I’m probably too old. So, yes! I’ll be on that rock, right along side of you. Count on it!
If we are lucky, we will end up selling off part of the two thirds of the western states it already owns. Rich with minerals, it should bring in a hefty figure. Hopefully more than what Napoleon got for the Louisiana purchase when he was in debt up to his ears. I think it was him.
But we won’t get much for Califoria. Mexico already controls most of it.
Good point Bunker. The sales revenue should balance the loss of tax dollars we will incur once Mexico, in position to annex our south western states at no cost does so. I’m going to take my medicine now.