Former Chairman of the Federal Reserve Alan Greenspan explains how the United States can pay down the debt. By printing money. Transcript:
David Gregory, moderator of “Meet The Press” on NBC: “Are U.S. treasury bonds still safe to invest in?”
Alan Greenspan, Former Chairman of the Federal Reserve: “Very much so. This is not an issue of credit rating, the United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default.”
Greenspan says the S&P downgrade was just meant to hit a “nerve” and hurt the “self-esteem of the United States.”
Of course, the question then becomes, if we can pay off our 15.5 trillion debt simply by printing the money then why have we not done so yet? If the S&P downgrade is really just a conspiracy using our debt as an excuse to hurt America’s self-esteem then why have we not countered by removing the debt? The fact of the matter is that for the government to print more money in order to pay off our debt is like someone with massive credit card debt saying, “no problem. I’ll just sign up for another credit card to pay this off!”
The fiat currency of the Federal Reserve has no inherent value. The value of the dollar comes with what it can buy and the more money you print then the less each dollar in circulation is worth. What Greespan ignores is that money is no end but a means to the real end of property and services. Money is our barter chip for the goods and services we desire so what good is the barter chip if it doesn’t stand for something?
Alan Greenspan may be technically right in theory that we could print the money to pay off our debt but it would probably take a lot more than 15.5 trillion dollars to do it and, worse, it would devalue the dollars of every American everywhere. Thats essentially a tax on your wealth – a tax never voted on by Congress and never established in law, a tax so insidious you would never know it were there except for the rising prices around you. If we were to print the money needed to pay off our debt then maybe we could get away with it – but the dollars in your pocket would no longer be worth the cotton its printed on.