There are problems, and there are causes, and then there are problems that are incorrectly claimed as being a cause. Poorly prioritized and wrongly chosen government spending is a problem. Overgrown government is a problem. Excessive taxation, especially for the wrong reasons, is a problem. The national debt is also a problem and it has root causes. But the root causes we’re given by those in public life – congressmen, newscasters, publicly paraded “experts” or “economists”, and would-be politicians – such as insufficient taxation or excessive spending or anything related to the budget deficit – are problems but are not causes of the national debt.
There are others who come close, saying that government borrowing is the cause, but then don’t seem to understand the difference between government borrowing and the mechanisms by which it borrows, and CONSUMER borrowing. They refer to the fractional reserve system as the source of government debt, but that borrowing is mostly done by consumers and while it does cause a flooding of the economy with debt money, the government gets it by selling bonds to people and entities who have somehow gotten it downstream of the borrowing including other nations who print THEIR money, and exchange it for Federal Reserve Notes.
The root causes of the national debt are two, but really it comes down to one REAL root cause or reason for the debt. That reason or root cause is that the US (as well as most other nations) has essentially no sovereign currency (save for coins and a few remaining US Notes) and has given away its right and responsibility to coin its own, so it is stuck with borrowing what it cannot tax. Taxation, though, is not what it seems either. If we were coining our own money as a nation, taxation would simply be a tool – of regulation and of expanding government projects with public permission. But as it is it is one of two means for the government to get money from the public since it cannot create its own. Taxation under the current system accomplishes no regulation as that is loosely done by the bankers for their own benefit.
The lack of ability (or willingness actually) to create sovereign currency leads to the government borrowing all of its currency. It borrows some directly from the private Federal Reserve Bank to supply the “reserves” and does so by “selling” bonds to them. Then it borrows the rest in an insane bond selling circular game where it re-borrows the same already-circulating currency over and over, where each time it borrows the currency it accumulates another batch of debt.
The national debt can only be eliminated by shifting to a sovereign currency. Give to Caesar what is Caesar’s, and let the people have their Constitutionally mandated sovereign currency coined and regulated only by Congress under the scrutiny and control of the people.
If we do that:
– We can eliminate all government bond sales (borrowing).
– Then we can return all circulating Federal Reserve Notes, replacing them with US Notes (which are bills of credit, not debt notes).
– We can change the distribution system of new currency to remove bankers from the picture and easily eliminate/outlaw fractional reserve lending with no adverse effects.
– We can thus eliminate all forced public usury and stop its negative effects.
– We can allow cities and counties to deal with consumer debt using local economic models.
– We can use the US Notes to buy back existing bonds in appropriate manners.
If we do these things, the US will be finally a debt free nation capable of accomplishing immense goals and all of the people can thrive.