You haven't been paying attention for the last 100 years, have you?! While I don't believe that medical care or an old age pension is an "inalienable right", nor that it's wise to amass armies for building nations, none of those expenditures are why we're so deeply in debt. Don't worry though, once Einstein had immigrated to the US, even he marveled at the miracle of compound interest. The clue is inside of a buried congressional report from the Subcommittee on Domestic Finance, Committee on Banking and Currency, chaired in 1964 by Representative Wright Patman, called "A Primer on Money".
Flip to page 71 first, and you'll see how the Federal Reserve System went from earning only 7% of it's interest income from US Government Securities in 1914, to 99% by 1963. Now, to be fair, of those earnings, the Fed remits approximately 80% back to the Treasury (at least it did in 1963), but the bulk of US Government Securities are not directly purchased by the Federal Reserve.
Our Bonds are auctioned through the FOMC, first purchased through a dozen "Primary Dealers", some names of which you'd immediately recognize like JP Morgan, but a few of which are agents of European banks. After the dealers take their 2% commission paid by the Treasury, other parties, many of which are the large American and European banks, take possession of the securities and send them back to the Federal Reserve to be held in reserve as capital reserves for the banks. While there, rather than the Fed collecting interest which it would remit back to the treasury, the banks collect and keep the interest generated on the debt.
Now ask yourself this, where did the banks get the money to "lend to the government"? Don't even waste your time trying to figure it out, because before it was lent out, it didn't exist. Upon purchasing the bonds, the banks did a double ledger entry adding the money paid to their liabilities, the bonds in reserve as assets, creating no new net imbalance, but creating money from thin air which they can further lend to us consumers of debt (the muliplier effect). Are the banks liable for this newly "minted" currency? No, because the Federal Debt is backed by the Faith and credit of We the People. As we see now, we are on the hook, or our children, or their children, but not the banks. Yet they are the ones collecting interest...?! Go figure!
Of course, if the Federal Reserve purchased the Government Securities directly (ibid, page 48), there would be no commission, and short of the Fed's operating expenses (accounting and clearing), all of the interest collected would be remitted back. Considering we've been doing this wrong for 100 years, it's not a wonder that the debt is so huge, because our interest payments, even at today's low low rate of less than 3%, are over 20% of our tax revenues, equal to our expenditures on Social Security. It's too bad Lincoln's Greenbacks died with him, because he had the perfect formula for creating money without adding interest to the public debt.
Unfortunately, after McKinley fought the banks (and lost), by Wilson's time (1913), carrying on through FDR, and all the way to Obama, with the exceptions of Kennedy and Reagan who dared to mess with the Fed, our leaders have been complicit to this Crime of the Century. To keep us distracted, congress perpetuates arguments about taxing and spending, green energy and acid rain, affirmative action and air traffic controllers, and during a dry news cycle, they've even brought radio DJs and sports jocks for congressional hearings. My favorite of course was the debate over recognizing the contributions of Michael Jackson.
Wow are we ever a bunch of schmucks, a hundred years of getting sucked into a three card monty by the banks!
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