Proposed Constitutional Amendment

[Brainonska511]

nevermind.

 

[nonlnear]

I prefer a tax raise to retire debt than monetizing it. Here's an Amendment I propose:
The Federal Government shall not print, coin, borrow, or loan money.
Congress shall make no law regulating banking.
Congress shall make no law establishing a bank.
All deficits shall be paid by the states in proportion to their percentage of the population according to the U.S. Census.
Congress shall collect taxes only in platinum, gold, and silver and shall establish a platinum:gold:silver value ratio.
The Federal Reserve Act of 1913 is hereby repealed.

Your ideas are intriguing to me and I wish to subscribe to your newsletter.

 

[3chordcharlie]

I prefer a tax raise to retire debt than monetizing it. Here's an Amendment I propose:
The Federal Government shall not print, coin, borrow, or loan money.
Congress shall make no law regulating banking.
Congress shall make no law establishing a bank.
All deficits shall be paid by the states in proportion to their percentage of the population according to the U.S. Census.
Congress shall collect taxes only in platinum, gold, and silver and shall establish a platinum:gold:silver value ratio.
The Federal Reserve Act of 1913 is hereby repealed.

It's a good thing you're not in charge then.

 

[paperfist]

I think raising tax's is the wrong way to go. The goverment needs to cut down on the bullshit spending. take out the fruad and waste and the country would be a hell of a lot better off.


/passes the pipe..

Such a simple idea yet it will never ever get done.

 

[First]

Debt financing is common among both public and private institutions and is far and away the best way to push your agenda and/or business. 90% of all businesses in the U.S. are small businesses under 50 persons that require short-term low-interest loans to stay afloat in the first place. That's a reality and it's not arguable, it is what it is and it's pretty reasonable considering that, for all intents and purposes, it's impossible to start a business without taking risks in the first place, and that includes getting into debt. It's when you can barely pay off interest on loans that you clearly are in too much debt and shouldn't be getting into more debt unless you want to significantly increase your risk of bankruptcy. Luckily the U.S. gov't is nowhere near that point now, and likely won't be in the next 10 years if you were an intelligent betting man. Beyond that, though, expect increased taxes on the top 5% of income earners and another significant economic boom to help pay down a significant portion of the national debt.

 

[First]

Oh, and of course some annual inflation to kill off even more debt.

 

[Blackjack200]

He's probably thinking it works like a credit card.

Previous Balance $11,546,820,319,097
Payments: $700,000,000,000
Other Credits: $0.00
Cash Advances: $0.00
Fees Charged: $0.00
Purchases: $1,453,397,367,256
Interest Charged: $834,935,195,116
--------------------------------------------

New Balance: $12,696,722,339,810
Minimum Payment Due: $689,554,198,100
Payment Due Date: 4/04/2010

Late Payment Warning: If we do not receive your minimum payment by the date listed above, the global economy will collapse.

 

[lothar]

I prefer a tax raise to retire debt than monetizing it. Here's an Amendment I propose:
The Federal Government shall not print, coin, borrow, or loan money.
Congress shall make no law regulating banking.
Congress shall make no law establishing a bank.
All deficits shall be paid by the states in proportion to their percentage of the population according to the U.S. Census.
Congress shall collect taxes only in platinum, gold, and silver and shall establish a platinum:gold:silver value ratio.
The Federal Reserve Act of 1913 is hereby repealed.

Heh.

 

[WhipperSnapper]

What if our nation's goal is to borrow as much money as possible and then default?

 

[ShawnD1]

What if our nation's goal is to borrow as much money as possible and then default?

Most of the debt is owned by Americans, so I guess theoretically you could just look at which ones own the most debt and kill them off one at a time....

/tinfoil

 

[heyheybooboo]

To save the patient, first stop the bleeding (i.e., raiding the trust funds).

The less money we borrow from ourselves, the less money we have to payback in principle and interest in future years.

(More than 30% of the projected 10-year debt is $$$ we will borrow from US and interest we will pay to US.)

If there is a 'good' thing about the money we owe ourselves it is that it will be 'dribbled' out over 25 years.

As far as 'no Federal debt' my understanding (always questionable) is that the economy would enter a hyper-mode of growth that would drive inflation through the roof.

So, we need a much better balance than we have today, and the willingness across the board to do what is necessary in the next decade to 're-center'.

The US is still a huge economic engine (despite what we say here). Over the next 10 years our total output will exceed $200 trillion to an annual GDP in excess of $23 trillion in 2020.

If we can't work this out, then we really are stupid - LOL


(btw - I understand that inflation will eat up at least 1/4 of that growth)





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[jstern01]

How about these changes/amendment:

1. The United States shall with 60 days of ratification of this amendment Nationalize all debts foreign and domestic. (effect is to wipe out the debt, start with zero balance).

2. This amendment would establish the a currency based upon the value of gold as the time of ratification. (return us to the gold standard)

3. Congress shall not comigal funds collected for specific programs or functions. (No more general funds, ie borrowing from Social Security to pay for general govt expenses)

4. Social Security shall be invested and shall not invest in more than 20% in US government debt instruments (Invest Social Security funds to generate income, but spread it out for better returns.)

5. Within 10 years of ratification, Congress shall establish a plan to eliminate Social Security, Department of Education, and other federal programs as not specified by the Original Constitution (Get back to the original function of government).

6. Within 15 years, the 16th Amendment shall be repelled. Congress shall collect general revenues for operation by general tax on goods at a rate that shall be establish to fund the Government at a balance level. Such tax rate shall not be altered, except by 3/4 vote of the States. (govt, can not spend more than it collects, bad years they have to suck it up.)

7. Except in the event of declared war by a vote of Congress, not special taxes shall be permitted or bonds issue. (special exception for war)

8. The printing and regulation of currency shall be by Congress, no delegation of such power or authority shall be allow permitted under this amendment. (take back the power from the Fed, they can regulate the banks, but can not handle the money).

9. The president shall reserve the right to to nullify or cancel specific provisions of a bill as presented by Congress. This amendment shall supercede any previous Constitutional restrictions. (Line item veto)

 

[3chordcharlie]

How about these changes/amendment:

(snip)

Yes, this would be a great way to destroy a first world country.

 

[Siddhartha]

Please focus on the general idea conveyed, not my specific wording.



I think it would be extremely popular (possibly with some work on the precise wording).

What do y'all think ?

Even Herbert Hoover realized that trying to balance the Federal budget during an economic crisis actually made things worst.

 

[Darwin333]

Please focus on the general idea conveyed, not my specific wording.



I think it would be extremely popular (possibly with some work on the precise wording).

What do y'all think ?

Probably make us instantly insolvent.

 

[Darwin333]

To save the patient, first stop the bleeding (i.e., raiding the trust funds).

The less money we borrow from ourselves, the less money we have to payback in principle and interest in future years.

(More than 30% of the projected 10-year debt is $$$ we will borrow from US and interest we will pay to US.)

If there is a 'good' thing about the money we owe ourselves it is that it will be 'dribbled' out over 25 years.

As far as 'no Federal debt' my understanding (always questionable) is that the economy would enter a hyper-mode of growth that would drive inflation through the roof.

So, we need a much better balance than we have today, and the willingness across the board to do what is necessary in the next decade to 're-center'.

The US is still a huge economic engine (despite what we say here). Over the next 10 years our total output will exceed $200 trillion to an annual GDP in excess of $23 trillion in 2020.

If we can't work this out, then we really are stupid - LOL


(btw - I understand that inflation will eat up at least 1/4 of that growth)





--

You will note that despite debt going up a lot in Fiscal 2009 the interest expense went down - a lot (about 15%.) But this year interest expense, if it tracks the five months thus far in the books, will rise from $383 billion to $434 billion, a 13% increase

Consider what happens if short rates go back to the 5% range - a historical reasonable point, and long rates go into the 7% range (a point that this chart's inverted head-and-shoulders, by the way, says is likely within the next two years):

Assuming Treasury continues to try to shove toward the short end of the curve, a strategy that exposes it to extreme amounts of rollover risk, the average coupon would likely rise to about 5.5%.

This would drive interest expense to $780 billion by September 2011.

Note that if historical averages hold, Treasury would take in roughly $1.2 trillion in personal income taxes. Interest expense would rise to consume approximately 2/3rds of that amount.

2/3rds of income paying an interest only loan if rates rise to a rather reasonable spot. As a lender, would you charge that entity "a historically reasonable rate" or would you perhaps assume there is a bit more risk and demand a higher rate? Or would you lend to them at all?

The way out debt is currently structured it could, and if history is any predictor it SHOULD, seriously blow up in our faces.

-source
http://market-ticker.denninger.net/archives/2130-On-Deficits-And-Debt-Financed-Government.html

 

[Darwin333]

I know that we don't have a "minimum payment" per se, and that most of our debt is on long-term contract rate basis.

Nope. Simply put, for a few years now we have rolled damn near all of our bonds onto the short end of the curve because of the historically low interest rates. That is why you see the interest we paid on the debt was less in 09 than it was the previous year despite borrowing a shitpot of money.

It worked, and is currently working, at reducing our current interest payments but the problem is, if the interest rates the Feds pay goes up we will almost immediately see massive increases in the interest we owe as we roll all of that debt over into new bonds.

So basically, we should all be hoping and praying that our rates stay at historically low levels or we will see a large portion (absurdly large) of the feds revenue going to increased debt payments.

 

[heyheybooboo]

It's about a year old but this is about as good a 'guess-timate' of economic assumptions that we can use as a guide:

They've at least tried to consider Treasury rates when computing deficit/debt numbers going forward.

It's been awhile since I've checked but the last I remember the average maturity of the debt was 4 years - 8 months. 10-12 years ago it was much higher but the Bubba Treasury toward the end worked really hard at shaving down maturities - so much so that 30-year issues were banned.

But they brought back 30-year issues in 2005 or 2006 :\

There is still a bit of Raygun debt floating around. I had a 8-3/4% 30-year bond from the mid-80s that got called.

I told the Treasury to keep the $1k --- I've kept the bond for its 'artistic' value Maybe one of these days it will be worth something - LOL



dang --- the original size of that image was 1300x624

hope you can read it

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[ebaycj]

Even Herbert Hoover realized that trying to balance the Federal budget during an economic crisis actually made things worst.

I didn't necessarily say we should implement it NOW. I actually agree with you.

 

[piasabird]

The more you raise taxes, the more money politicians spend on a bridge to nowhere and new government programs we dont need. The government can start by firing all the Czars not elected or not approved by congress. So how does O'Bamma make a bunch of new job positions making over $100,000 and then get the money to pay for it? Who approved that line item in the budget?

 

[piasabird]

I have a better idea. We need to move washington DC half way between Kansas City and St Louis. Nothing there but a few cows. That should save about 500 billion a year.

 

[DrPizza]

OP, you mean that when someone buys a savings bond for $50 that matures in 10 years for $100, that the gov't should, by constitutional amendment, be required to pay $75 (or whatever it would be worth) in 5 years?

 

[werepossum]

I'd support an Amendment instating term limits and removing pensions and government golden parachutes - no more than twelve years and each Congress Critter has to return to living under the laws he or she passed.

 

[Mursilis]

I think it would be extremely popular (possibly with some work on the precise wording).

On this, I think you're dead wrong - it would be extremely unpopular. Everyone's for debt reduction in theory, but not in practice (because no one wants to see spending cut or taxes raised). It's like dieting - everyone wants to be thinner, but almost no one wants to give up having extra deserts.