Today, it’s common to here politicians extol the virtues of paying off the national debt. While I think everyone understands that it’s a political impossibility that our cowardly pols would ever make any meaningful progress in paying down the debt, it is also a theoretical impossibility that the U.S. could pay off the national debt.
Why is that do you think? There is not enough cash. If you took all the cash held by U.S. citizens, U.S. Companies, and federal, state, and local governments, you would still fall quite short of the national debt.
The Fed defines money into 3 categories: M1 is all tangible cash and coins and all funds held in checking accounts plus all travelers checks. M2 is M1 plus all money held in money market funds, savings accounts and small CD’s. M3 is all of the others plus large CD’s. A present level of M1 is 1.7 trillion. M2 is 8.5 trillion. M3, who knows? The Fed no longer publishes M3 statistics. I wonder why? Maybe because the Fed has been shoveling trillions into megabanks and other countries (including Greece). The last published stat on M3 was 10.5 trillion. Currently, the national debt is $13,046,479,870,803.71 or 13 trillion.
In fact, money itself is debt. Take a bill out of your pocket and read it.
