Actually Havensdad is right. We could pay off our debt by printing up more money but that would devalue the dollar even more. Not that the dollar has much value anymore.
The value (purchasing power) of the dollar has been devalued 95 - 97% since the Federal Reserve system was created in 1913. So, there isn't much wiggle room left for further devaluation.
Look at it this way, what cost 20 dollars in 1913 now costs around 450 dollars! This is the effect of creating money from nothing.
QE2, what happened to the money?
In effect 600 billion dollars plus or minus a few billion was taken out of our pockets and handed to foreign banks where it now sits collecting interest. How does this help our economy? It doesn't!
Setting Things Right
Whatever is responsible for causing the local credit crunch, trillions of dollars thrown at Wall Street by Congress and the Fed haven’t fixed the problem. It may be time for local governments to take matters into their own hands. While we wait for federal lawmakers to get it right, local credit markets can be revitalized by establishing state-owned banks, on the model of the Bank of North Dakota (BND). The BND services the liquidity needs of local banks and keeps credit flowing in the state. For more information, see
here and
here.
Concerning the gaping federal deficit, Congressman Ron Paul has an excellent idea: have the Fed simply write off the federal securities purchased with funds created in its quantitative easing programs. No creditors would be harmed, since the money was generated out of thin air with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.
As for “quantitative easing,” if the intent is to stimulate the economy, the money needs to go directly into the purchase of goods and services, stimulating “demand.” If it goes onto the balance sheets of banks, it may stop there or go into speculation rather than local lending — as is happening now. Money that goes directly to the government, on the other hand, will be spent on goods and services in the real economy, creating much-needed jobs, generating demand, and rebuilding the tax base. To make sure the money gets there, the 1935 law forbidding the Fed to buy Treasuries directly from the Treasury needs to be repealed.
SOURCE
Better yet, abolish the Federal Reserve system along with it's unconstitutional enforcment arm known as the IRS!
