In reply to Taylor J. Smith's message of Tue, 21 Dec 2010 22:42:56 +0000: Hi, [snip] >Jefferson argued forcefully against debt. Hamilton was >all for debt. I have not yet read Ron Paul's book >"End The Fed" but it won't be long before interest on >the national debt is the largest budget item, exceeding >military expenditures and transferring enormous wealth >from the taxpayers to the money lenders. > As I understand the US system, the government gives bonds to the Fed in exchange for bank notes. This is IMO fundamentally a huge rip off. It costs the Fed only a minuscule fraction of the face value of notes to produce them, and in return they get a bond from the Government that is worth the face value, and represents value owed by the government to the Fed. IOW every bond they get is effectively an IOW from the people of the USA to the private banks that own the Fed. An IOW that at least in theory can be cashed in for real goods. Therefore I think that the interest is the least of your worries. The problem is the capital itself, which you wouldn't owe at all, if the Fed were actually a government institution (as it is in Australia BTW). However I'm not sure whether or not the Government reclaims it's bonds when recycling used bank notes. Anyone care to enlighten me?
Regards, Robin van Spaandonk http://rvanspaa.freehostia.com/Project.html
