Issue 15 We own you America feb,21,2013

Here is a fun one :)

Debt Bonds

            We all know it’s bad to try and pay off debt with more debt.  This is the unfortunate plight of the United States with the national debt at 15 trillion and growing.  So I asked my self, is there a way to replace our foreign debt to countries like China, our bank debt to banks like AIG and the debt we owe to Social Security with something more manageable.  Then it hit me, savings bonds that are used to pay off all other debt and make the Federal government owe only the American people.

            Savings bonds, for those who don’t know, are loans to the Federal government with a controlled interest rate.  This means they can only gain a certain amount of interest beyond their original value.  A stark contrast to the near perpetual interest we owe to countries like China.  So I am calling for the creation of savings bonds that are used exclusively to pay off all our foreign debt, then the debt we owe to banks and other financial institutions and finally the money the government owes to itself.  I dub them debt bonds.

            The debt bonds will only be accessible to American citizens so as to prevent future foreign and other forms of national debt.  Essentially it replaces all debt with debt that is owed exclusively to the American people and is more manageable due to interest rates being capped once the bond reaches a certain value over the original loan.  To prevent the Federal government from owing too much money to any individual citizen and thus gaining too much influence in America’s politics people will only be able to take out a certain number of debt bonds per year.  On top of that the maximum value of each bond will be limited to $100.  This takes care of millionaires and the like who can take out hundreds of bonds at a time and makes the peoples influence on America’s debt more equitable.  Overall, debt bonds makes the United States owe the American people and no one else.

            To speed up the process of replacing our current U.S. debt to the likes of China or AIG, a sinking fund can be created.  A sinking fund is used to pay off the debt exclusively and has a source of funds from the general revenue of the U.S.  In this case, that revenue can come from a certain percentage of what the Federal government gets from our taxes or revenue from such things as the post office.  The debt bonds supplement the fund to speed up paying off foreign debt.  Portions of the debt will actually be paid off and the rest replaced by debt owed to American citizens resulting in a more fiscally sound and possibly easier to pay off national debt. 

            I am sure we can agree that we hate the idea of owing China money.  We hate the idea of owing banks like AIG, who also got bailout money at the start of the financial crises back in 2008-2009.  No one wants more money being borrowed from Social Security or Medicare anymore.  Most of all, however, we hate the idea of our national debt causing the Federal government, our government, to have divided loyalties to its creditors and us, the American people.  So let us make the national debt the citizens’ debt, and have the Federal government’s loyalty return to us and us alone.