Elementary Math to Eliminate the Nations Debt

We all know 5 x 4 = 20 We also know (- 5) x (- 4) = +20 There it is: The solution to eliminate the US debt! All we need is two banks A and B with (negative) deposit $5 Trillion. Multiply them using some NEW financial instrument and we have +$25 Trillion. The US national debt is GONE!

Dear All: Here's an interesting conversation I had yesterday. Pretty much the same idea was also posted a couple of days ago as a brilliant way to eliminate the national debt, which is now more than $16 T. According to the Bureau of Public Debt, the exact figure for the US national debt on Jan 10, 2013 is $16,432,692,129,510.84 (see http://www.treasurydirect.gov/NP/BPDLogin?application=np) going all the way down to the last penny. 1T = one trillion which means 1 followed by 12 zeros. If one million people had one million dollars each, together they would have $1T. From the math we learned in elementary school, we know that 5 times 3 equals 15, 8 times 2 equals 16, and so on. This is elementary arithmetic, or multiplication. But, we also learned that -5 times - 3 equals +15 and -8 times -2 equals +16. If we multiply two negative numbers we get a positive number. Ever wondered why this is true? No. We just accepted it when our teachers said so. Here's the plan. Take the entire national debt and "put" it in four banks (these can be government created banks), A, B, C, and D. Each bank now has -$4T instead of a positive balance, which is the usual case. The total equals -$16T. Now, do whatever it takes and multiply the bank A and bank B deposits of -$4T. Now we have +$16T. Bingo! All of the US national debt is now paid off. Ok, we start out each bank with -$4.1T or -even $5T, if you want to get picky about this. Now do the same with the "deposits" made into banks C and D. Now, not only is all the debt paid off, we have a huge huge SURPLUS of $17.22 T (if we start out with -$4.1T with each bank) or $25T (if we start out with -$5T for each bank. The economics Nobel laureate Paul Krugman is credited with coming up with the idea of minting the $1T platinum coin, which I had discussed earlier. That idea,

after receiving some serious consideration, has now been shot down by the US Treasury, and the White House agrees. Now, this four banks idea, with negative deposits to take care of the debt is, I think, is a very VIABLE plan. It is based on sound mathematical principles. We just have to learn how to create a financial instrument to accomplish this. Why only use addition and subtraction for banking? Let us also use multiplication and division. Not only that, when I mentioned this in the Gita class yesterday (to explain why we should accept Krishna's teachings, without questioning, just we accept -5 times -3 equals +15), one of my good friends came up to me and said, "You are right. Math works, we should do the same with the national debt." So, there you go, at least two people are thinking the same! Now Wall Streeters and Dr. Paul Krugman should take this idea and complete the task. Invite me to receive the Nobel Prize in December 2013. (Do send me 1st class plane tickets, though!) All we need is a new financial "instrument" that exploits rules of multiplying negative numbers. For all the Wall Street geniuses who came up with the idea of "derivatives", this should a piece of cake. The following is a bonus explanation: A deficit is just negative government receipts. If the budget deficit is $1T it means the government receipts are less than the government outlays by that amount: Deficit (or Surplus) = Receipts - Outlays. This is the basic equation for the deficit (or surplus). When we add each year's deficit (or surplus), the cumulative value over the years is the total national debt. The figure of more than $16T, as of Jan 10, 2013, tells us how much more than US government has spent compared to its receipts (mostly income taxes now but in the old days the receipts were mostly tariffs on luxury items, liquor, and other commodities). We are already "chest deep" into this debt and now the GOP and Tea Party want to complain about this instead of doing something constructive.

(The national debt went up from $1T shortly after Reagan took office to $10T, in 1981, when the junior Bush left office!) Dr. V. Laxmanan