Tuesday, August 2, 2011

Rep. Paul Introduces Bill to Cancel $1.6 Trillion in Debt held by Federal Reserve

Rep. Ron Paul on Monday introduced legislation that would lower the federal government's debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve and to lower the public debt limit by an equal amount..

Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would simply be wiped off the Fed's books.

The practical result of passage of such a bill would be that the Treasury would not be required to pay interest on such debt or redeem that debt, thus it would reduce that burden from being put on taxpayers.

Although critics of Ron Paul's proposal charge that this would prevent the Fed from draining reserves from the system, when deemed necessary, the Fed has alternative methods to manage the money supply from selling off other assets to raising the reserve requirement.

Passage, however, would give  Fed chairman Bernanke another Ron Paul inspired headache.


  1. I mean we only owe it to ourselves, right?

  2. How about repudiating the bonds sold to China soverign wealth fund. Call it liquidated damages for intellectual property theft.

  3. Apparently we owe the Morgans and the Rothschilds, banksters one and all feel that their illegal and unconstitutional system to apply their usury schemes to our nations money should be honored! All sovereign debt owed to central banks worldwide should be repudiated!

  4. Ron Paul once said:

    "If the federal government cannot cut spending and bring the budget back into balance, the Fed undoubtedly will be forced to simply monetize trillions of dollars in Treasury debt, which is nothing more than a stealth form of default. That devaluation of the dollar will lead to such high inflation that QE2 and its effects will look like a drop in the bucket in comparison.”


    I can't believe he could introduce this bill with a straight face.

  5. Ben may be having a Homer Simpson-like moment in that image: "D'oh! I wish Ron would just go away"!

  6. The counterfeit racket is being exposed. Where did these Fed Tapeworms get the $1.6T in the first place? Do they own the patents on Velcro and microwave ovens? These "people" need to be stopped.

  7. I agree with the "critics" here. I don't like this move, but then again he knows more about the fed than I do. On top of not being able to drain money from the market, it will set a precedent for future problems... "just let pay for it, then don't pay them back"

  8. RONPAUL! Bill of the Century....cancel the Federal Reserve next! Then the IMF, UN, Democrats, Republicans, State Dept DOE, DOEng, DOD, .....+++++++

  9. This is a great, great start.
    Please, pretty please, Ben Bernanke.

    You seem like a decent sort...

    Come over to the light....

  10. Err!??? That would permanently remove the Fed's ability to shrink the money supply by selling treasuries. It's not like they ever sell them and tighten though. But it'd be nice to actually pretend though??

  11. @Anonymous

    That was my original position but I think RP is making the plausible argument that the bankster bail-out was a one-time (sotto voce - ha!) extraordinary business, requiring an extraordinary response.

    I am not sure what the "other measures" Wenzel is so confident about, but let's see...

    It's likely a very political move...

    Maybe it is being deployed for its effect on foreign and domestic audiences more than anything else?

    We aren't privy to all the details, so we will have to speculate..

  12. Wasn't this 1.6 trillion essentially applied directly to M1 or M0, so won't it will eventually be multiplied? Not sure how that would work.

  13. Ron Paul is just great lol.... He really has some stones! I'd love to see him as President! Check out his video site: http://RonPaulFlix.com He's not as nutty as some think.