Scholar: America’s Government Is ‘Irreparably Broken’

[Bigun]

Look, here's the problem: the Federal Reserve is not "us" - it's not a government entity. It is a private bank empowered by Congress to provide (and withdraw) liquidity to member banks in the system. To greatly simplify here for the sake of time: its Chairman and Board of Governors determine monetary policy, specifically by determining the primary interest rates that FRS member banks charge each other for overnight lending; these rates in turn determine the rates at which both private and sovereign debt securities (bonds) are issued.
 
It used to be that the Fed was only the primary issuer of US sovereign debt (which finances US deficit spending). But today, the Fed is also the largest buyer of that debt (often after temporarily "selling" it to dealers who in short order resell it to the Fed (for a fee, of course).
 
The result is that the majority of American debt is owned either by foreign nations like Japan or China - whose sales of the same would cause massive a reduction in the value of the dollar - or by the Fed - which monetizes the debt by simply "digitizing" dollars into existence - i.e. - by effectively printing money directly into the accounts of the largest banks in America. 
 
But little of that money is finding its way into circulation, its velocity held tightly in check by the Fed's own artificial repression of interest rates. This in turn is forcing investors seeking reasonable returns to invest in stocks and real estate - creating bubbles in each. See where this is going? It will not take much in the way of an "unexpected" event to create a cascading crisis in the capital markets... leading to capital flight to more secure currencies, followed by deflation, then by massive layoffs in an economy where good-paying jobs are already scarce and disposable income has declined, but where personal indebtedness and dependency have expanded rapidly.
 
Suddenly, tax receipts can no longer mask increased Federal spending. The deficit explodes, just as demands for ever more "emergency" spending hit Congress. The stock market goes into a tailspin. Banks are faced with severe liquidity problems as investors begin withdrawing the money they have left. ATM's begin to run out of money. Legions of professional agitators and protestors mass in the streets, in increasingly violent clashes with police and National Guard troops.
 
Sound like Greece? Greece was just the beginning. This is a global economic problem because everything I described above about the Federal reserve also applies to the European Central Bank and the Bank of Japan and other Masters of the Universe central planners who are slowly losing control of their respective economies.   
 
And sadly, there is nothing that we can now do to prevent the Great Reset that is coming.  Even if we were to do the politically impossible and implement a flat or consumption tax, freeze Federal spending (forget about any rollback) at current levels, repeal the Obamacare mandates, approve the Keystone pipeline, abolish the IRS, encourage productive people to start marrying and having babies, somehow achieve 10% annual GDP growth for 20 years... it wouldn't matter.... the math, at all levels, is impossible. I'm sorry to say it, but it has to blow up. Only then can we pick up the rubble and start to rebuild. But there will be rubble, and lots of it.

NOW we are largely in agreement! There is no doubt whatever that there is going to be a HUGE pay the piper moment in our near future but I believe we can endure that and rebuild on a SOLID foundation.

Upon reflection I think I failed to make myself fully clear in my earlier posts due to trying to be brief.

[andy58-in-nh]

NOW we are largely in agreement! There is no doubt whatever that there is going to be a HUGE pay the piper moment in our near future but I believe we can endure that and rebuild on a SOLID foundation.

Upon reflection I think I failed to make myself fully clear in my earlier posts due to trying to be brief.

Tell me about it. It's hard to be brief while talking about economics and politics. 

[Free Vulcan]

And Bigun, I didn't want to completely dismiss you and your points. I believe that if we act now, quickly, and decisively, that we have at least a shot of surviving a total catastrophe. Not to say it still wouldn't be some brutal economic pain, but we could at least survive as a country intact. It's a long shot and would take some radical moves, but if the political will was there it could be done.

[Bigun]

And Bigun, I didn't want to completely dismiss you and your points. I believe that if we act now, quickly, and decisively, that we have at least a shot of surviving a total catastrophe. Not to say it still wouldn't be some brutal economic pain, but we could at least survive as a country intact. It's a long shot and would take some radical moves, but if the political will was there it could be done.

Agreed! That' exactly what I've been trying to say all along. 

[truth_seeker]

Who hold US debt?

http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-the-most-u-s-debt/

[Fishrrman]

alicewonders wrote above:
[[ We can no more turn this back than Thelma and Louise could go in reverse. ]]

Thelma and Louise didn't want to "go into reverse".

And neither do the elites who run the FedGov.
That includes the GOP-e establishment as well as the democrats.

If there is no way to repay the debt, what choices are left?
Seriously?
Sell off parts of America, as FreeVulcan alluded to above?

Hmmm.. we could sell the southern/western half of California to Mexico (heck, they're taking it over anyway, it won't be "ours to sell" very much longer).

We could sell Hawaii to Japan.

We could sell Northern Oregon and Washington state to China as settlement for their holdings of our debt.

Russia would want Alaska back, but I doubt they have the money to pay for it. We should demand payment in gold and nothing less!

Some places we might try to give away to anyone who wants them.
Detroit?
Baltimore?
Cleveland?
;)