Let’s pay it off
When we pay the debt, we prevent a future bond sale, for Congress has already funded the current bonds. The money becomes available to loan. As borrowers pay it back, principal and interest reduce the debt more, and, in turn, become available to loan or invest. These loans are varied. First, to homeowners at 3.5% on a five year note for compressors and conversions to use their natural gas as a transportation fuel. Then to victims of usury, at 8 % on three, five or seven year notes, paying off their debt while reducing ours, and saving them money. Each payment reduces the national debt and becomes available to loan again.
Banks will start to lower interest rates to maintain market share. They can pass their troubled loans to the debt fund, reducing their loan loss, while the IRS can collect on defaults, and count them as taxable income. This will also make defaulters less eligible for government assistance.
All this action occurs on the debt side. Consider the government side. Debt service is reduced. The jobs created for factory workers, drillers, gas men will increase the revenue. They will, in turn, create more jobs as they increase their own demand for goods and services, for we, the consumer, are the job creators. Business hires enough workers to service our demand. How many jobs do we create? There’s 65 million homes in this country piped for natural gas. There’s 100 million cars attached to those homes. Can we say a bunch of jobs? Can we say the deficit has disappeared? Not only that, but costs for aid to the poor will decline. Eligibility for Medicaid, AFDC, welfare and food stamps will decrease. If the new jobs balance the budget, savings on those programs will create a surplus, to shore up Social Security, Medicare and debt reduction.
Bring the undocumented out of the shadows. Let him pay 10% of his income to the debt, and live free, demanding a fair wage for his work. He pays on his tax return. His 1040 becomes his Green Card. The need for ICE and the Border Patrol, as well as the expense of Immigration Court, will decline.
Decriminalize the use of drugs, and license vendors to ensure purity and quality, and the need for DEA will decrease. Property crime will slow, and the costs of law enforcement and the need for prisons will decrease.
Meanwhile, back on the debt side, revenue flows have reduced the debt. Money continues to accumulate, available to pay the monthly shortfall from Social Security and Medicare without further bond sales. If we can cash-flow Social Security, we knock off the 4.6 trillion in bonds that reside in the trust fund, without selling more.
Each of these proposals reduce the debt. Most serve to reduce the scope of government. Many reduce government expenditure, allowing lower taxes. Savings to the public arise in reduced fuel cost, shipping expense, food cost, interest expense, travel expense and taxation. These savings will allow increased economic activity, which will create the sustained boom, the rising tide that floats all boats.