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Nationalize the bankers....why, that's socialism...By borrowing from their own publicly owned banks, governments could eliminate their interest burden altogether. This has been demonstrated elsewhere with stellar results, including in Canada, Australia, and Argentina among other countries.
In 2011, the US federal government paid US$454 billion in interest on the federal debt – nearly one-third the total $1,100 billion paid in personal income taxes that year. If the government had been borrowing directly from the Federal Reserve – which has the power to create credit on its books and now rebates its profits directly to the government – personal income taxes could have been cut by a third.
Borrowing from its own central bank interest-free might even allow a government to eliminate its national debt altogether. In Money and Sustainability: The Missing Link (at page 126), Bernard Lietaer and Christian Asperger, et al, cite the example of France.
The Treasury borrowed interest-free from the nationalized Banque de France from 1946 to 1973. The law then changed to forbid this practice, requiring the Treasury to borrow instead from the private sector. The authors include a chart showing what would have happened if the French government had continued to borrow interest-free versus what did happen. Rather than dropping from 21% to 8.6% of GDP, the debt shot up from 21% to 78% of GDP.
“No ‘spendthrift government’ can be blamed in this case,” write the authors. “Compound interest explains it all!”
That is exactly the remedy to crush our outstanding debt though..
