Legislative Report

We'll never be able to pay off the national debt now

Hello again. As I suggested in last week's editorial, the issue of education will be our topic this week.

What a furor Education Chairman Nonini's bills have caused! They were created to help reduce the education budget to be in line with present revenue projections. We were scheduled to have an Education Committee meeting this Monday morning. At the close of the day Friday, news of the passage of the stimulus package caused a cancellation of our Education Committee for Monday morning.

The Department of Education wants some time to study the issue, so all meetings were put on hold. The question now is: which direction are we going to go to resolve the budget deficit? Will we be reducing the budget to match revenue projections or increase our national debt by acceptance of the stimulus package, against which all of Idaho's Congressional delegation voted. This is a serious dilemma.

Let's first ask a few questions about the creation of money. Why is it that all our money is created by debt instruments through the Federal Reserve System? This was started in 1913 by the creation of the Federal Reserve, which is not owned by the United States of America or its government. How can the debt ever be paid in full when all the money that is created is the principle? It can't. Where does the money come from to pay the interest on the debt? The only way there is money to pay interest is to create more debt and use part of that to pay interest on the older debt. Without the creation of new debt, there is no money to pay the interest with. There never is enough money in existence at any time to pay the debt and the interest. It is mathematically impossible, under the present system, to pay the debt in full. The debt has to continually increase under the present system. This begs the question "When is the debt going to be unserviceable?" It is already consuming an alarming amount of our net national product.

President Abraham Lincoln was correct when he stated, "The privilege of creating and issuing money is not only the supreme prerogative of government, but is the government's greatest creative opportunity. By the adoption of these principles, the taxpayers will be saved immense sums of interest." He was talking about creating money without debt. Is this possible? Yes. Wouldn't it be nice if the stimulus package came to us without increasing the national debt? Therein lies the serious dilemma.

I'll further this discussion next week. Until then, please contact me with any question or comments at pnielsen@house.idaho.gov or call 332-1054.