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GOODBYE NATIONAL DEBT
Introducing Coupon Stripping
A flow tax balances the budget, and that would allow us to finally pay off the national debt.
Under Coupon Stripping the Fed would generate reserves to buy back Treasury bonds, then cancel the bonds.
We cannot pay off the debt in one lump sum, as that would entail liquidating too much debt in the capital markets at once. It would take about ten years to repay the debt with Coupon Stripping.
DEBT IS DAMAGING
When we issue Treasury bonds, it is the same as printing money. We have created two forms of money: currency and Treasury bonds.
The difference between currency and Treasury bonds is that bonds earn interest, which is what makes them so problematic.
Deficit spending and the issuance of Treasury bonds are why a loaf of bread costs $4 today instead of ten cents as it did in the 1940s.
We end up paying the taxes that we seek to avoid by borrowing. We pay them through the inflated cost of goods over time. By charging interest on the bonds, we are only furthering their inflationary effect.
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