Revisiting U. S. Public and Private Debt in April 2011

Abstract:     
U.S. public and private debt is traced to the decision of the First Congress in 1790 to borrow the new nation's money supply. This established a debt imperative that requires debt to grow by compounding interest. When debt fails to grow enough, the economy goes into various degrees of recession. Annual debt increase required now is multiple trillions. Debt growth can be stopped by a general moratorium on interest. Federal debt can be paid with the debt certificates themselves by declaring them 'as good as cash' and the Federal government can pay new money into circulation debt and interest free. The actual cause of inflation and deflation is the undefined nature of the money unit. An hour of work time is suggested as the proper unit, not only for the dollar but for all currencies, so that prices can be fairly calculated as easily as length is measured with meters.

Number of Pages in PDF File: 10

Keywords: debt, deficit, interest money, time fair market

JEL Classification: E00, A10, A14, D63, E50, E60, F00, G28, H10, H60, J30

working papers series