"In numerous years following [the Civil War], the Federal Government ran a heavy surplus.It could not [however] pay off its debt, retire as securities, because to do so meant there would be no bonds to back the national bank notes.To pay off the debt was to destroy the money supply."
Insolvent: the inability to pay financial debt
That is one reason the debt can’t be paid off: our money supply is debt and can’t exist without it. But there is another obvious reason: the debt is simply too big. To get some sense of the magnitude of a $7.6 trillion obligation, if you took 7 trillion steps you could walk to the planet Pluto, which is a mere 4 billion miles away. If the government were to pay $100 every second, in 317 years it would have paid off only one trillion dollars of this debt. That’s just for the principal. If interest were added at the rate of only 1 percent compounded annually, the debt could never be paid off in that way, because the debt would grow faster that it was being repaid. (3). To pay it off in a lump sum through taxation, on the other hand, would require increasing the tax bill by about $100,000 for every family of four, a non-starter for most families.
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs. -Thomas Jefferson
