The Federal Reserve Board should have a far greater role than stabilizing the drift of a sinking ship. To some, the multi-decade journey of the United States to bankruptcy need not be taken as an end all event because many conclude that the United States will merely be duplicating the experience of the Romans, Germans and Russians. Nonetheless, for a number of years CRE (Center for Regulatory Effectiveness) has been broadcasting the need for urgent actions to address our nation’s irreversible movement towards bankruptcy. We continue to support the statements of our predecessors who have made these statements for decades and continue to do so but we also emphasize that prevailing conditions are so perilous that we must immediately extend our sights beyond problem identification to problem solving.
That said, with the emergence of the lust for spending during the onset of the 21st century we have been unsuccessful in defining any significant traction for a specific solution to runaway spending, meaning that we need to be precise when moving from the diagnosis to the treatment of the pending bankruptcy of the US government. Yes, we agree with the need to increase national income and decrease federal expenditures but these statements in themselves do not constitute a meaningful solution to the problem.
We now have proposed one potential solution titled an “Enlightened Debt Restructuring Program” which has been reviewed by leading analysts in and outside of government and so explained on the website of the Center for Regulatory Effectiveness. The nationwide reaction to our proposal, with few exceptions, is: “is this draconian solution really needed?”. Our reaction is that we are not recommending that our proposed solution be implemented at this time but instead merely requesting that it be reviewed by the Federal Reserve Board who would issue a report to the public on its strengths and weaknesses should a control mechanism be needed in the future.
The aforementioned review could spark a national interest in reducing federal spending based upon an immediate and simultaneous review of all programs instead of waiting until it is too late to do so which usually compels a piecemeal review. Hopefully such a review would diminish support for the prevailing alternative of simply issuing more currency and allowing inflation to go unchecked.
It should be noted that the Debt Restructuring we have under consideration is considerably more expansive than that used when all the participants are private firms as opposed to a mix of governmental and non-governmental entities. In particular, concerns such as income inequality and unfunded obligations are not presently included in traditional deficit analyses and their absence would preclude any definitive action on the matter; more specifically with respect to unfounded obligations the absence of any action to address continued payments for Social Security and Medicare is a non-starter.
Several–far from all– of the participants in this trailblazing effort have identified major deficiencies in the existing program and have developed even stronger demands for corrective actions, but at the same time have proposed no solution to the problem and have resisted any recognition of the proposal set forth herein: All Hat-No Cattle.
Should CRE Explore The Possibility of Utilizing Bitcoin As A Hedge To US Bankruptcy?
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