During the Republican CNN/YouTube primary debate, Sarah Lederach at Penn State asked what the presidential candidates would do to control the national debt. The overwhelming topic of the responses was that they would cut “pork spending,” the allocation of federal funds to the pet projects of individual legislators.
Trevor Wagener further advocates this strategy in his column (“Hope for U.S. budget in curbed pork spending” 12/4) that appeared in this space Tuesday, claiming, “If pork spending is reallocated to paying off the principal on the debt with the budget balanced, the principal will begin to get paid off.” While this statement is logically indisputable, we might be unsatisfied with the timescale of the repayment. Citizens Against Government Waste estimates that $2.4 billion is spent on so-called pork projects every year. If we were to eliminate all of this pork barrel spending, we will be able to save $9.16 trillion, the current value of our national debt, within about 3,817 years.
It seems that in order to make real inroads on the debt, the government would have to either raise more revenue (perhaps through taxes), or make severe cuts to federal programs that voters actually like. These are unpalatable options. Instead, the American government continues to print more money to pay off the interest (a process called “debt monetization”), and then utilizes a problem-solving strategy called, “hoping someone else figures out how to deal with our massive deficit.”
Surprisingly, this strategy has worked thus far. But I, Michael Zink, have discovered the solution to our national debt problem that will require neither an increase in revenue, nor a decrease in spending.
Central to the Zink Plan is the notion that our debt is not tied to any fixed standard; rather, it’s counted in “dollars,” units of currency that are backed only by the “full faith and credit of the U.S. government.” Currently, the value of the “full faith and credit of the U.S. government” is declining at an astonishing rate, relative to that of shiny rocks that we dug up out of the ground (and still more insultingly, the euro). Yet as the dollar continues to decline in value, so too does the magnitude of our debt.
This is where currency printing enters the equation. Every dollar that we print tends to reduce the value of every other dollar currently in circulation. Hence, the more money we print, the less our debt is actually worth. Why, one might ask, don’t we simply print out $9.16 trillion, and then use it to pay off our creditors?
The answer, of course, is that this would destroy our economy. It happened in Germany in 1922-1923, when the government printed enormous sums of money to pay off its World War I debt, resulting in inflation so severe that it became more cost-effective for Germans to burn their paper money than buy firewood with it, per USAgold.com. Yet it’s also well known that within a few years of this collapse, Germany had completely revitalized its economy and refashioned itself into a major industrial power.
What was Germany’s secret to stopping the inflation? Ron Paul knows — it was gold! When the Germans introduced a new gold-backed currency, their economy suddenly stabilized. Here, then, is the Zink Plan:
First, the U.S. will borrow an enormous sum of money from foreign creditors, and use that money to buy an equally enormous quantity of gold. Immediately afterwards, the Federal Reserve will issue trillions upon trillions of dollars, causing our currency to almost completely devalue. Once this has happened, we can pay back all of our debts with our nearly worthless currency.
We could then introduce a new gold-backed currency (let’s call it the “dhollar,” silent “h”). We’ll mandate that everyone holding U.S. dollars redeem their currency for the “dhollar,” completely reversing the progress of inflation and revitalizing our economy.
The Zink Gold Plan, if properly enacted, would substantially reduce the value of the American federal debt, and might actually result in a net profit if we are able to procure enough gold. Furthermore, it has been a topic of some concern that foreign nations such as China had been stockpiling U.S. debt in order to gain economic leverage over us; the Zink Plan will put a stop to this, and teach China a valuable lesson in the process.
I do not suggest that this plan will come without some hardship. For one, the excitable nature of the American investor may result in some temporary instability in the general temperament of the market, leading to some hasty, ill-advised business decisions and perhaps a few suicides. But like the Yale seniors who interviewed at investment banks earlier this semester, we Americans must realize that there is often an unpleasant price to pay for being debt-free.
Michael Zink is a junior in Saybrook College.