Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Rep. Paul Introduces Bill to Cancel $1.6 T in Debt Held By Federal Reserve
The Hill's Fllor Action Blog ^ | 08/02/2011 | Pete Kasperowicz

Posted on 08/03/2011 1:18:07 PM PDT by ex-Texan

Rep. Ron Paul on Monday introduced legislation that would lower the federal government's debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.

Paul has argued for the last few weeks that the idea represents a quick way to make the growing fiscal crisis more manageable. Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would disappear.

The Federal Reserve began buying Treasury bonds in earnest late last year as part of its effort to keep long-term interest rates down. But Paul has argued that Fed purchases of Treasury debt represent a debt that the government owes to itself, and one that also leads to an unwanted and inflationary increase in the money supply.

Paul has also said the Fed is allowing the federal government to continue a spending binge it otherwise would not be able to afford, and is forcing the Fed to print money to keep up.

"If the federal government cannot cut spending and bring the budget back into balance, the Fed undoubtedly will be forced to simply monetize trillions of dollars in Treasury debt, which is nothing more than a stealth form of default," Paul said back in May.

Paul is highly critical of the debt-ceiling agreement that the House approved Monday, and said that rather than require real cuts in spending, the bill mostly cuts planned spending levels in the future. According to the legislation, discretionary spending in 2012 would be just $7 billion less than in 2011, and in 2013 it would be just $3 billion less than 2011 before allowing increases above 2011 levels.

"No plan under serious consideration cuts spending in the way you and I think about it," Paul wrote in a piece that appeared on The Hill's Congress Blog. "Instead, the 'cuts' being discussed are illusory, and are not cuts from current amounts being spent, but cuts in projected spending increases."


TOPICS: Crime/Corruption; Editorial; Front Page News; Government
KEYWORDS: bernanke; fed; federalreserve; obama; palin; paul; ronpaul; trillion
Navigation: use the links below to view more comments.
first 1-5051-81 next last
Please hit the primary link to read all the comments posted below the article.

Paul is highly critical of the debt-ceiling agreement that the House approved Monday, and said that rather than require real cuts in spending, the bill mostly cuts planned spending levels in the future. According to the legislation, discretionary spending in 2012 would be just $7 billion less than in 2011, and in 2013 it would be just $3 billion less than 2011 before allowing increases above 2011 levels.

"No plan under serious consideration cuts spending in the way you and I think about it," Paul wrote in a piece that appeared on The Hill's Congress Blog. "Instead, the 'cuts' being discussed are illusory, and are not cuts from current amounts being spent, but cuts in projected spending increases."


1 posted on 08/03/2011 1:18:18 PM PDT by ex-Texan
[ Post Reply | Private Reply | View Replies]

To: ex-Texan

How about the $9 Trillion that the Fed can’t account for?


2 posted on 08/03/2011 1:23:05 PM PDT by RC2
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

Isn’t that esentially debt we owe to ourselves?

It doesn’t make whole lot of sense to keep paying it.


3 posted on 08/03/2011 1:23:30 PM PDT by cripplecreek (Remember the River Raisin! (look it up))
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

That would balance the budget for this year but what about next year?


4 posted on 08/03/2011 1:23:41 PM PDT by GeronL (The Right to Life came before the Right to Happiness)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

Meanwhile, CNN is running, as we speak, with a banner Headline Stating:

Debt Deal could force $700B in cuts over 10 years” , like it is DRASTIC, HORRIBLE NEWS...

We live on Orwell Bizarro Planet now, don’t we.


5 posted on 08/03/2011 1:24:05 PM PDT by tcrlaf (PREFRONTAL LOBOTOMISTS FOR OBAMA2012!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

It would be better to just delete the Federals Reserve...................


6 posted on 08/03/2011 1:24:48 PM PDT by Red Badger ("Treason doth never prosper.... What's the reason? Why if it prosper, none dare call it treason.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

When I was a kid I worked on Ron Paul’s early campaign. I remember driving him over to an event one time. At a skating rink of all places:) He was saying the exact same things then as he is today. He really has never changed his tune(s).


7 posted on 08/03/2011 1:26:25 PM PDT by isthisnickcool (Sharia? No thanks.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan
Paul has argued for the last few weeks that the idea represents a quick way to make the growing fiscal crisis more manageable. Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would disappear.

What consequences would arise from doing this? After reading the original article and the comments, I still have no idea.
8 posted on 08/03/2011 1:26:36 PM PDT by AnotherUnixGeek
[ Post Reply | Private Reply | To 1 | View Replies]

To: Islander7; mlocher; Dubya-M-DeesWent2SyriaStupid!; TruthConquers; M. Espinola; Cincinatus' Wife; ...
Notice that nobody is talks about $ 16 Trillion the Fed sent to central banks in other countries and lent to the banking cartel players around the world.

Such a vast transaction probably violates multiple conflicts of interest regulations and may, in fact, constitute illegal money laundering.

Does anybody even know how many box cars of $ 100 bills it would take to move that much currency or how much all the bill would weigh ___ ?

Thank God the Fed is using imaginary numbers and computer transactions and one and zeros of digital money . . . LOL !

9 posted on 08/03/2011 1:29:15 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
[ Post Reply | Private Reply | To 1 | View Replies]

To: cripplecreek
Isn’t that esentially debt we owe to ourselves?

It represents money that we printed. Getting rid of it just clears the way to print more.

ML/NJ

10 posted on 08/03/2011 1:32:34 PM PDT by ml/nj
[ Post Reply | Private Reply | To 3 | View Replies]

To: cripplecreek
Isn’t that esentially debt we owe to ourselves?

Well, yes, but when you specify the definitions of we and ourselves in context it becomes more clear.

we owe = wage slave tax payers OWE

to ourselves = to the banking cabal that rules the money supply

The corrected version reads, "Isn't that essentially debt we tax payers owe to our banking cabal overlords?"

11 posted on 08/03/2011 1:36:56 PM PDT by douginthearmy
[ Post Reply | Private Reply | To 3 | View Replies]

To: AnotherUnixGeek
What consequences would arise from doing this?

We wouldn't have to pay interest on a loan that the Federal Reserve essentially bought back.

As far as the 1.6 trillion 'disappearing', all the principal is just numbers on a piece of paper. It is the INTEREST which involves REAL MONEY, and which somebody MUST PAY.

Ron Paul is correct. We are paying for something that we should not be.

Where do you think all these Superyachts and World's Tallest Buildings come from?

12 posted on 08/03/2011 1:37:05 PM PDT by UCANSEE2 (Lame and ill-informed post)
[ Post Reply | Private Reply | To 8 | View Replies]

To: cripplecreek

-——But Paul has argued that Fed purchases of Treasury debt represent a debt that the government owes to itself,-——

Which raises the question, if the Treasury ceased making interest payments would the fed sue?


13 posted on 08/03/2011 1:37:19 PM PDT by bert (K.E. N.P. +12 ....Flash mobs are trickle down leftwing REDISTRIBUTION))
[ Post Reply | Private Reply | To 3 | View Replies]

To: isthisnickcool
He really has never changed his tune(s).

When the "tune" is reality, what's to change?

14 posted on 08/03/2011 1:38:00 PM PDT by Misterioso (The worst law is better than bureaucratic tyranny. (Ludwig von Mises)
[ Post Reply | Private Reply | To 7 | View Replies]

To: AnotherUnixGeek; Red Badger; tcrlaf; cripplecreek; GeronL; RC2

"Whoopie . . . Free imaginary $ Trillions . . . All owed by the taxpayers . . ."

15 posted on 08/03/2011 1:38:03 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
[ Post Reply | Private Reply | To 9 | View Replies]

To: ex-Texan

AFAIK, the $16T was paid back.

If I loan out $1 a hundred times, and it’s paid back in short order every time, I’ve loaned out $100 - and it’s no big deal. Seems that’s what the Fed is doing, just on a larger scale (repeated loans, all paid back).


16 posted on 08/03/2011 1:41:00 PM PDT by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
[ Post Reply | Private Reply | To 9 | View Replies]

To: ex-Texan

This could be an elegant stealth method to get rid of the Fed. I like it


17 posted on 08/03/2011 1:41:16 PM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
[ Post Reply | Private Reply | To 1 | View Replies]

To: RC2
How about the $9 Trillion that the Fed can’t account for?

The Federal Reserve (a non-government organization) can account for every penny. They do no have to give an 'accounting' to us, or the government, as they are the bankers, the loan originator.

It is our government that says they can't account for the money, and blames the Federal Reserve. There is even talk of 'auditing' the Federal Reserve. What a joke. There is about as much chance of that as you getting to sit in on all of the Obama meetings at the White House and Golf Course.

18 posted on 08/03/2011 1:41:31 PM PDT by UCANSEE2 (Lame and ill-informed post)
[ Post Reply | Private Reply | To 2 | View Replies]

To: cripplecreek

The Federal Reserve Corporation is a private bank.


19 posted on 08/03/2011 1:41:41 PM PDT by FightThePower! (Fight the powers that be!)
[ Post Reply | Private Reply | To 3 | View Replies]

To: FightThePower!
The Federal Reserve Corporation is a private bank.

The fed is private when its convenient.
20 posted on 08/03/2011 1:42:58 PM PDT by cripplecreek (Remember the River Raisin! (look it up))
[ Post Reply | Private Reply | To 19 | View Replies]

To: ex-Texan

We could also eliminate much debt by talking China into forgoing payback thereof in exchange for, well, Taiwan.

</sarcasm>


21 posted on 08/03/2011 1:44:12 PM PDT by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GeronL

Just because a bill doesn’t solve every problem doesn’t mean we should keep it from solving any problem.


22 posted on 08/03/2011 1:44:52 PM PDT by 9YearLurker
[ Post Reply | Private Reply | To 4 | View Replies]

To: douginthearmy
Obama is a profiteer just like his banking cartel supporters.

Rumors abound on the Internet about Obama massing a huge fortune in off-shore trading accounts:

UPDATE: OBAMA OFFSHORE TRADING PROFITS EXCEED 3 BILLION DOLLARS !

If true -- Impeaching BO is the only way to move forward. But today our entire Congress is corrupt. Both the Dems and GOP have been taken over by shills and profiteers. In my view, both political parties are fake. Even our elections are fake for the most part, with voting machines pre-programed to substitute ones for zeros on a controllers' cue.

So this is how our Repubilc ends -- "Not with a bang, but a whimper."

23 posted on 08/03/2011 1:45:45 PM PDT by ex-Texan (Ecclesiastes 5:10 - 20)
[ Post Reply | Private Reply | To 11 | View Replies]

To: cripplecreek

“Isn’t that esentially debt we owe to ourselves?
It doesn’t make whole lot of sense to keep paying it.”

Your proposal would make skimming operations impossible.

Lots of Democrat crooks and cronies would be out of a flow of money!

Impossible!


24 posted on 08/03/2011 1:45:51 PM PDT by Jewbacca (The residents of Iroquois territory may not determine whether Jews may live in Jerusalem.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: ml/nj

That would clear the way for the surrender monkey to put in for more ear marks the ear marks he says he is against, but loves so much.


25 posted on 08/03/2011 1:48:12 PM PDT by John D
[ Post Reply | Private Reply | To 10 | View Replies]

To: UCANSEE2

The Fed is NOT a non-governmental organization. It is a hybrid e.g. part governmental/part private. If you can name one other “non-governmental organiztation” which has its head appointed by the federal government, I’ll eat my words. Of course, no other “non-governmental organization” has the power to print money or write checks backed by nothing.


26 posted on 08/03/2011 2:00:38 PM PDT by Captain Kirk
[ Post Reply | Private Reply | To 18 | View Replies]

To: ctdonath2

We wouldn’t have to “talk” China to do anything. A better option is simply to repudiate the bonds. Of course, this might mean that nobody will want to lend any more money to Uncle Sam but that would be a net-benefit for us.


27 posted on 08/03/2011 2:03:00 PM PDT by Captain Kirk
[ Post Reply | Private Reply | To 21 | View Replies]

To: ex-Texan

3,524,229,075 lbs?


28 posted on 08/03/2011 2:07:36 PM PDT by NativeSon
[ Post Reply | Private Reply | To 9 | View Replies]

To: ex-Texan
I don't think the left will ever get it. Even in a no-holds-barred revolution these commies will go to the gallows pole believing they are the righteous ones. The Tea Party need to stop demanding cuts. It's time to demand entire sectors of government shut down.

We are called terrorists after settling for fake cuts! Terrorists don't ask for a fraction of a percent of their goal. They demand total compliance. Of course, I am totally against terrorists of all sorts, but I can tell you this. If I am going to be called a terrorist it is not going to be after settling for a total horse crap deal!

If Joe Biden wants to see real terrorism, I say AUDIT THE FED! CLOSE THE IRS. CLOSE THE DEPARTMENTS OF EDUCATION, COMMERCE, ENERGY, HHS, and HOMELAND SECURITY.. THEN!! We'll discuss cuts in the remaining departments.

29 posted on 08/03/2011 2:07:47 PM PDT by douginthearmy
[ Post Reply | Private Reply | To 23 | View Replies]

To: Red Badger

“It would be better to just delete the Federals Reserve...................”

Hopefully, this is the first step. If we can just dissolve the Fed outright, then maybe we can chip away at it.

I have a bad feeling that if it passes the House, it won’t make it through the Senate. It probably won’t get to the President’s desk so he can veto it.

I have to give Dr. Paul some credit for being one of the only conservative out there with brass ones. At least he’s trying.


30 posted on 08/03/2011 2:11:14 PM PDT by C.O. Correspondence (The tree of liberty isn't sustained by water.)
[ Post Reply | Private Reply | To 6 | View Replies]


Click Florida

Free Republic Is America's Brightest Hope

Give once,
Donate monthly

Or sponsor New Monthly Donors
For a one-time contribution of just $10 each
FReepmail TheOldLady to be a sponsor

31 posted on 08/03/2011 2:17:53 PM PDT by TheOldLady (FReepmail me to get ON or OFF the ZOT LIGHTNING ping list.)
[ Post Reply | Private Reply | View Replies]

To: ex-Texan

32 posted on 08/03/2011 2:20:06 PM PDT by McGruff (I am Sarah Palin)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

Hmmm...sounds like a great idea...


33 posted on 08/03/2011 2:26:14 PM PDT by Judith Anne ( Holy Mary, Mother of God, please pray for us sinners now, and at the hour of our death.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Captain Kirk
If you can name one other “non-governmental organiztation” which has its head appointed by the federal government, I’ll eat my words. Of course, no other “non-governmental organization” has the power to print money or write checks backed by nothing.

How about General Motors? Daniel Akerson advanced to the CEO position directly from the Board of Directors, where he was the representative of the U.S Treasury ( which owns 61% of GM).

34 posted on 08/03/2011 2:30:54 PM PDT by Leroy S. Mort (Fiat justitia ruat caelum)
[ Post Reply | Private Reply | To 26 | View Replies]

To: ml/nj
It represents money that we printed. Getting rid of it just clears the way to print more.

Didn't you get the message? We've learned our lesson. We don't do that any more. I heard it straight from the most powerful pantywaist mama's boy in the wolrd.

35 posted on 08/03/2011 2:32:05 PM PDT by Migraine (Diversity is great... ...until it happens to YOU.)
[ Post Reply | Private Reply | To 10 | View Replies]

To: ex-Texan

What ever became of the picture of ABC’s ‘practice’ vote tally that was accidentally published days before the election? In it every case except perhaps two were called to the exact final percentages. I never understood why that didn’t make news. Maybe no one wants to know what is going on?


36 posted on 08/03/2011 2:41:11 PM PDT by Chaguito
[ Post Reply | Private Reply | To 23 | View Replies]

To: ex-Texan

>>cuts in projected spending increases.”<<

Why is there spending increases when there is zer0 inflation?


37 posted on 08/03/2011 2:41:54 PM PDT by B4Ranch (Allowing Islam into America is akin to injecting yourself with AIDS to prove how tolerant you are..)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

What ever became of the picture of ABC’s ‘practice’ vote tally that was accidentally published days before the election? In it every case except perhaps two were called to the exact final percentages. I never understood why that didn’t make news. Maybe no one wants to know what is going on?


38 posted on 08/03/2011 2:42:50 PM PDT by Chaguito
[ Post Reply | Private Reply | To 23 | View Replies]

To: ex-Texan

Can anyone tell me why this would be a bad thing?

The biggest negative I can think of (and I am not an economist) is that then the Congress can say “Hey, we just cut $1.6T from the debt, just like we promised. Now let’s keep spending and raise taxes.)


39 posted on 08/03/2011 2:44:10 PM PDT by Recovering_Democrat
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan
"I wish it were possible to obtain a single amendment to our Constitution ... taking from the federal government their power of borrowing."

-- Thomas Jefferson (Letter of November 26th, 1798)


40 posted on 08/03/2011 2:45:46 PM PDT by EternalVigilance ('One useless man is a shame, two is a law firm, and three or more is a congress.' - -John Adams)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan
"But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years."

--Thomas Jefferson, letter to James Madison, 1789


41 posted on 08/03/2011 2:46:32 PM PDT by EternalVigilance ('One useless man is a shame, two is a law firm, and three or more is a congress.' - -John Adams)
[ Post Reply | Private Reply | To 1 | View Replies]

To: RC2

How about the $9 Trillion that the Fed can’t account for?-—

do tell...

what’s the frequency kenneth? where can i find moron this...

teeman


42 posted on 08/03/2011 2:52:05 PM PDT by teeman8r (armageddon won't be pretty, but it's not like it's the end of the world.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: ex-Texan
this is a goody:
The man makes way too much sense to be listened to by his establishment numbskull colleagues…BY TPA on 08/02/2011 at 11:26M

43 posted on 08/03/2011 2:52:05 PM PDT by _a_0_0_
[ Post Reply | Private Reply | To 1 | View Replies]

To: Red Badger

A couple of POTUSs supposedly wanted to start printing USA currency instead of Federal Reserve and they ended up assassinated. Kennedy was one.

I see the enormous abuse of the taxpayer and our dollar by the Fed to the benefit of a few on Wall Street and I strongly oppose it.

Here is a good example: http://prudentinvestornewsletters.blogspot.com/2011/04/federal-reserves-pandoras-box-some.html

They run their organization like the ATF against public interest passing out our money to dictators and thieves.


44 posted on 08/03/2011 3:08:36 PM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
[ Post Reply | Private Reply | To 6 | View Replies]

To: ex-Texan
Ronald Paul has sponsored 418 bills since Jan 7, 1997 of which 415 haven't made it out of committee and 1 were successfully enacted.

One of the most ineffectual congress critters ever... all hat and no cattle. Same old, same old bla bla blah.

45 posted on 08/03/2011 3:21:31 PM PDT by La Enchiladita (I said it, I meant it and I represent it.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ex-Texan

Noise, laudable but noise. A waste of time and energy. It will go nowhere.


46 posted on 08/03/2011 3:21:45 PM PDT by Sequoyah101 (Half the people are below average.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: AnotherUnixGeek

What consequences would arise from doing this?
##

The people who own the Fed would have Dr. Paul killed if this bill starts getting support.


47 posted on 08/03/2011 3:32:07 PM PDT by SUSSA
[ Post Reply | Private Reply | To 8 | View Replies]

To: Jewbacca
Your proposal would make skimming operations impossible.

My exact thought and I'm sure somebody is getting a "modest" handling fee to process these transactions

48 posted on 08/03/2011 3:38:22 PM PDT by Popman (Obama. First Marxist to turn a five year Marxist plan into a 4 year administration.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: cripplecreek
Isn’t that esentially debt we owe to ourselves?

Stick a hose in your butt and live by breathing your own farts. That is what the US government is doing.

49 posted on 08/03/2011 3:40:38 PM PDT by ChildOfThe60s ( If you can remember the 60s....you weren't really there)
[ Post Reply | Private Reply | To 3 | View Replies]

To: ex-Texan
Rep. Paul Introduces Bill to Cancel $1.6 T in Debt Held By Federal Reserve

Wouldn't we be better off cancelling the Federal Reserve?

50 posted on 08/03/2011 3:44:35 PM PDT by paul51 (11 September 2001 - Never forget)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-81 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson