H.R. 2768 Would Cancel $1.6 TN in Treasury Debt Held by Fed

The Hill reports Rep. Ron Paul introduced legislation on Monday to cancel the $1.6 trillion of federal government debt held by Federal Reserve.   The Hill writes,

Paul has argued for the last few weeks that the idea represents a quick way to make the growing fiscal crisis more manageable. Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would disappear.

The Federal Reserve began buying Treasury bonds in earnest late last year as part of its effort to keep long-term interest rates down. But Paul has argued that Fed purchases of Treasury debt represent a debt that the government owes to itself, and one that also leads to an unwanted and inflationary increase in the money supply…

“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,” Paul said back in May.

Wow!   Our Asian creditors better beware of xenophobic Congressmen.  What Bizarro times in which we live.

This entry was posted in Monetary Policy, Sovereign Debt and tagged , , , . Bookmark the permalink.

7 Responses to H.R. 2768 Would Cancel $1.6 TN in Treasury Debt Held by Fed

  1. Pingback: H.R. 2768 Would Cancel $1.6 TN in Treasury Debt Held by Fed | The Big Picture

  2. Jordan Viray says:

    Ron Paul isn’t xenophobic (if his foreign policy and military voting record mean anything) and I’m sure the Chinese and Japanese would be happy to see the US stop inflating away the value of their Treasurys.

    It’s a bizarro solution for sure, but it makes sense upon closer examination.

  3. Anonymous says:

    Matter + Antimatter = black hole

    • Jason says:

      Yeah, that’s simply just not true. Matter + Antimatter = a release of energy in the form of high energy photons… almost the exact opposite of a black hole… I still don’t know what you were trying to get at that with your metaphor.

  4. E. says:

    Xenophobic??? Do you know what the word means? Do you know who Ron Paul is? You might disagree with the idea, but why throw out uninformed insults?

  5. Pingback: Ron Paul Fan Club | Forex Tonight

  6. Gregory P says:

    Indeed, read the comments above. “Xenophobic congressmen” is a comment written by someone uneducated in the actions and words of the mentioned congressman.

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