My idea is that the National Debt is a Revolving Fund. Maybe not so novel when an alternative portrayal of National Debt is as a Credit Card. Something everyone is more inclined to understand. A credit card is a type of Revolving Fund. Maybe better as an example but the essential problem domain of the National Debt must be examined in in terms of the essential thing I think it is: A Revolving Credit Fund.
This is a very fundamental view of the nature of the National Debt. If it has any validity then this view should turn up some google search hit results on a search using these quoted terms: "National Debt" Revolving Fund". All I could find of any magnitude were hits that discuss TARP and it being used as a revolving fund.
http://votesmart.org/public-statement/430825/congressman-mccarthy-urges-treasury-to-use-tarp-repayments-to-pay-down-national-debt#.UJP9wtxdX8Y
In general, nobody seems to have expressed anything in any significant terms of google hits related to what I see as a rather elemental and important way of looking at a big thing like National Debt as a Revolving Credit Fund.
Perhaps the problem is that National Debt as a Revolving Fund is a paradox to the extent that revolving funds are only viewed as financing a certain type of business operation which uses the fund as an asset money pool to facilitate payments and receipts. It is an "inventory" buffer stock of money out of which to operate just like an physical inventory of objects in the warehouse ready for immediate delivery/sale.
A Revolving Account fund to the business that uses it for a stock of money inventory is, when it is borrowed by the business to establish it as a "Line of Credit", something that the business pays interest to the financing agency (bank or other institution) as rental on its use. The bank creates it out of nothing like any other loan.
The revolving fund is not a lock box container of money into and out of which money flows in a revolving manner at receipts and payments of money. The only thing inside the box is a single number that establishes the debt ceiling of the fund and the constraining rule that net total payments cannot exceed (at any given time) net total receipts.
Am I getting this right? I used to know a lot about how revolving stock funds worked. It was easier when there was stock in the wholesale warehouse. The rule there is that you have to sell stock to get money to buy more stock to sell. It Revolved.
Is this my bottom line? ----National Debt is a Negative Asset Revolving Fund. Negative Asset merely being another term for Debt but framing it that way facilitates its examination.
A revolving fund is a revolving fund as far as the mechanics of how it operates independent of what it is applied to. It is easier to see it applied to stock in a warehouse and the associated money needed to fund the stock and conversion of that stock to money by sale to get the medium of exchange in order to get more stock at the wholesale level (with a little left over for profit) or buy all the resources necessary to make more stock if you are a manufacturer or do both if you are a vertically integrated product business.
Fighting Alligators and maybe I have slain one and learned more in the process?
The contribution of slaying this alligator to draining the swamp is that our National Revolving Fund is our money supply. It can be a Negative Money Supply (Loan/Financed and therefore debt to us) on which we pay rent or it can be a Positive Money Supply that we call our savings and we pay no rent on it. We should be receiving rent on it when we individually decide we want to rent out a portion of our savings as loan for interest.
In fact, all the money in our money supply is out on loan plus the money that our base money supply generates through fractional reserve banking. The base money supply is itself a revolving fund to the banksters.
No comments:
Post a Comment