The United States National Debt is the Amount of Money the United States has Created not Borrowed

Alright, well my opponent is now relying on you guys not believing me rather than him factually explaining why I am wrong. Let me try to touch on all his points, to show that I am not avoiding any questions. == Can the Government simply Create Money? == My opponent is under the impression that our Govt is allowed to create money. One would think that a sovereign country with control of it's own fiat currency would be able to just simply print money when it wants. Well that is not the case in America, which is why we are having this debate. The Govt has to "borrow" to spend money in this country by law. My case is that the borrowing is a series of accounting that happens outside the nonbank public that allows for money creation. Basically our money is backed by debt. == Ability for the Government to pay down the debt if it wants to == My opponent believes the Government can simply pay down the debt when it wants to and it uses the $112 billion from Clinton surplus as his case. I have proven that even under a surplus that the national debt has not decreased. Clinton merely used new debt (intragovernmental) to replace old debt (public). My position states that the Government can not simply pay down the debt because accounting-wise it is impossible unless current legislation is changed. I think I have proven that money is created through debt whether through banks or the Govt and it all lies on some entities balance sheet. My position is that taxes can not pay the debt off because that would create dollars that were not backed by debt, therefore the Govt would have to issue new debt to back the floating dollar. They would be "in float". And since we can't have floating dollars, we must constantly issue new debt in order to create new money. == Greece == My opponent likens us to Greece in his closing paragraphs. This should prove to the voters that my opponent is unaware of how the United States economic system works. Greece is part of the Euro, they are constrained by how much Euro they have. They have no sovereignty over their currency. .. therefore they are "revenue constrained". The United States controls it's own currency and is not bound by any non-human constraint to pay off it's debts or spend more money. This should be a clear sign that my opponent is not a knowledgeable expert on the American economy. ==The government can OBVIOUSLY create money without issuing debt. == This is not true otherwise they would do it. Which is why all these shenanigans have to take place for them to create money. ==The government credits our bank accounts== My opponent is unaware that when a public employee spends the money the Government provides them, they no longer own that money, and it is now circling the private sector. Just like someone who found gold under the gold standard. ==Clinton== You continue to think that Clinton could have paid off the national debt. But he didn't, every year he added to it, even though he ran a surplus. I have shown you why this is the case but you still refuse to believe me. I still remain confident that the national debt can not be paid off with tax dollars unless current legislation is changed. There is no dollar in existence that is not backed by debt and I have shown that by providing balance sheets of the Federal Reserve and the banks in America. There is no such thing as USD "Float". It is all backed by debt, therefore paying off the debt would either have to create "float", or would have to create new debt. Basically what Clinton did. ==M2 Does Include Loans== M2 includes all accounts on the banks balance sheet, including loans. This is another reason voters should disregard my opponents attempts to prove my theory incorrect. This can simply be proven by a non-academic source . http://en.wikipedia.org... This is a clear example of my opponent being uninformed on the details of this debate. ==S&P Downgrade== My opponent now seems to use politics to defend his position. S&P downgrading the nation does not change how the nation works. In fact Warren Buffet came out saying the United States should have a AAAA rating. Warren Buffet also understands that the country can pay off it's own debt whenever it wants since it is debt in it's own currency. Source: . http://www.foxbusiness.com... ------------- Unfortunately my opponent did not go in to enough detail on how the accounting of America works. This is very important since that is how you can represent money and debt flowing throughout the system. If you don't know the checks and balances of the country, then you can not prove how money is created or how debt can be repaid. For voters out there the bottom line is understand what money is purchasing the Govt debt when it is auctioned off. The Federal Reserve says 70% is purchased through Primary Dealers, who are mandated to participate in every auction and create a market for securities. Now ask yourself, why do we need special dealers to create a market for treasury's? The answer is simple, the collaboration between the Fed's, Treasury, and the Primary Dealers finance Govt debt through bank money. This leaves the nonbank public money unaffected and essentially puts money in to the economy before any nonbank money is debited out. This relationship between the Fed, Treasury, and Primary Dealers is the key to the money creation through Government deficit spending. Ask yourself this simple question, why would a country that has it's own made up currency need to borrow it's own made up currency? And then once you realize we borrow by necessity and that borrowing essentially is spending, then it all makes sense what the national debt actually is. My opponent, although I appreciate the debate, has shown a lack of basic understanding of accounting, economics, and the United States economic system. Comparing the United States to Greece Saying M2 Money Supply does not include loans and is comparable to the National Debt Clinton surpluses reduced the national debt even though it didn't Saying banks loan deposits For a person to be able to debate what I am saying, the above 4 items would be common knowledge and the debate would be more focused on the actually balance sheets of the entities involved in each transaction. The opponent, like most others, is completely looking at this from the angle of the private sector. He is obviously of the train of thought that thinks the Govt uses our money to borrow to pay for deficits. There are 5 entities that all play a role in the financial balance sheets of America 1) The Country (represented by the Govt) 2) The Treasury (the Govt's accountant) 3) The Fed (The Country's bank) 4) The Banks 5) The Private Sector All money creation happens between 1-4. The way Government debt is financed is simply accounting tricks between 2,3,4. The key question you have to ask yourself is, do we the nonbank public receive a net increase in nonbank public money when the Government deficit spends before the Govt debits nonbank public money out of the system. This is the basis of money creation, does the Govt take money out of our accounts before they credit our accounts or does the Govt credit our accounts before they debit our accounts? My position is that the funding of Govt deficit spending happens behind the scenes and we, the nonbank public, receive Govt deficit spending, before we, the nonbank public, are asked to fund the Govt deficit spending. Therefore, the nonbank public uses money that increases the national debbt to pay our taxes and to purchase Govt debt from the secondary market. My opponent made a valiant effort, but I have not learned anything new from this debate and I still believe that the national debt can not be paid off by current accounting standards because that would leave dollars in the system that are not backed by debt.