Your Questions About Debt-free Money

Nancy asks…

Why is it the city of Calgary has lots of money and debt free !!?

But other cities are having a hard time in Canada.

John answers:

Calgary has the second highest per capita debt of Canada’s major cities after Montreal.

Maria asks…

If Congress printed debt-free money..?

what would the economy be like in contrast to the Federal Reserve debt-money system? Would hyperinflation be more probable? Or it would be the same as it is today, minus the huge national debt we have?

What are the pros & cons of the government printing its own money?

John answers:

I do not know what you think “debt-free” money is, but I would bet that you have some misconceptions about money and how central banks work.

There is very little correlation between the national debt and the monetary system. The national debt is the result of the government spending more than it collects in revenue. It is that simple. The Federal Reserve has no say in how much the government is going to spend. Also, the Federal Reserve does not loan money to the government. In fact, other than extremely short-term cash management bills, the Federal Reserve is prohibited by law from purchasing U.S. Government debt directly from the government. The Federal Reserve may only buy U.S. Government debt on the open market.

The Federal Reserve system is setup as it is in order to separate monetary policy from fiscal policy and political influence. The Federal Reserve is INDEPENDENT, but that doesn’t mean that it is private or accountable to no one. The Federal Reserve reports to Congress every year and included within the annual reports are independently audited financial statements. Also, all net profits of the Federal Reserve are paid to the U.S. Treasury every year.

As for the government printing its own money, that is what generally leads to hyperinflation. Politicians, many of whom know little to nothing about economics (Ron Paul especially), would make monetary policy decisions based upon their short-term political or selfish goals instead of for the long-term growth of the economy. While you may believe that the Federal Reserve hasn’t done a good job in promoting long-term growth, you should learn to realize that an economy the size of the U.S. Is difficult to accurately forecast. Economists and monetary policy decision makers attempt to forecast the monetary needs of the economy using the best available information and utilizing the current, prevalent economic theory. Sometimes, they get it right and sometimes they may be off-target. You should also understand that the economy was more volatile when the U.S. Did not have a central bank than it has been since the start of the Federal Reserve.

James asks…

How much money would be in circulation if everybody including the government was debt free?

John answers:

Much the same as there is now, just there would be more government (tax) money available to spend on roads, schools, hospitals etc., or simply to let the politicians grant themselves big wage increases.

Donna asks…

I have a credit score of 741, my business partner owns a debt free house worth $75k. Can we borrow money to?

invest in her home so that we can use it as renter’s property. My name is not on the house, but we are 50/50 partners in a llc.

John answers:

As you are having a good credit history and your partner owns a debt free house, you both can borrow the loan.
To borrow the loan you should put your partner`s house as the security.then you can get the loan.
She can get up to 55000 $.
I hope my answer might be of some use to you
wishing you success!

Sharon asks…

i am about $26k in debt? should I retire from my current jobs of 17 yrs. and use the money to be debt free?

i will either look for another job or go back to the existing company.

John answers:

This is not enough information to answer this.

What kind of debt is it? What do you earn? What will you get if you quit? Are you talking about spending a pension on this debt? Do you own a home? Do you have equity? What is the interest rate on this debt?

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