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<p>[QUOTE=&quot;Cloudsweeper99, post: 1209143, member: 3011&quot;]Regarding (1), my larger point is that the nation would be better off with no national debt and no interest payments on the debt.&nbsp; And the government doesn&#039;t only make interest and principal payments to the Fed.&nbsp; It makes most of them to foreign goverments and institutional investors.&nbsp; So it isn&#039;t just money going in a circle.</p><p><br /></p><p>Regarding (2), there would be an excess of currency for a short time.&nbsp; It is highly probable that most of the money invested now in US treasuries would be reinvested in other securities, but with the system so incredibly damaged by high debt levels, you are correct that the transition to debt free status would not be pain free.&nbsp; That&#039;s dreaming at this point.</p><p><br /></p><p>Regarding (3), I hear this often but never with an explanation.&nbsp; There is no good reason in the world why an FRN is a &quot;better&quot; paper dollar than a USN.&nbsp; Both are fiat.&nbsp; And if the government called in FRNs and replaced them with USNs, I doubt that anybody would notice or care.&nbsp; Many people would probably be happy when it is explained that by using them, the nation gets out of debt dollar for dollar.&nbsp; So no, I don&#039;t understand why you think that.&nbsp; Also, keep in mind that this &quot;plan&quot; would never in practice be a flash cut to a new currency.&nbsp; It would be phased in over years as the national debt is reduced.&nbsp; It may even be desirable to keep some debt outstanding and FRNs in circulation along side of USNs so that institutions have a AAA rated bond to purchase.&nbsp; It&#039;s very flexible.[/QUOTE]</p><p><br /></p>

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