I decided to become a 2012 presidential candidate because I believe I can offer solutions to our nation's problems and challenges such as the national debt, health care, education and foreign policy. My main focus, however, is the national debt and budget deficit because we cannot realistically solve any of the many problems we face as a nation unless we fix our finances. The national debt/deficit is the biggest threat to the United States and our way of life as a people. Our current crop of politicians would like us to believe that they will solve the debt problem with spending cuts and/or tax increases. However, because the national debt and deficit are so large it is impossible to solve the deficit and debt problem with spending cuts and/or tax increases without destroying our way of life. The significant tax increases or spending cuts needed to solve the debt problem would have such a huge negative impact on our standard of living that any politician voting for such measures would be voted out of office. Moreover, we don't want to destroy our society through large spending cuts and tax increases in order to solve the debt problem - such a strategy would backfire.

By way of background, the budget deficit is the difference between government spending and government revenues. If the government spends three trillion dollars in a year but only had revenues of two trillion dollars for that year, the budget deficit for that year would be one trillion dollars. The national debt includes all the budget deficits throughout history. For example, if the national debt is fourteen trillion dollars and we run a deficit in the next budget of one trillion dollars, the national debt will be fifteen trillion dollars plus accrued interest.

Under my plan, all budget deficits will be funded by bonds purchased by the Federal Reserve Bank. We will no longer sell bonds to other countries or to Wall Street. If the Federal Reserve holds the bonds the interest paid on those bonds will come back to the United States treasury instead of going to foreign countries and entities that would otherwise hold the debt. In addition to buying bonds to fund the budget deficit each year going forward, the Federal Reserve will also be given the mandate of purchasing all of the outstanding debt which is currently held by entities other than the federal government such as other countries, corporations and individuals. In making purchases of outstanding debt, the Federal Reserve will be given discretion as to the timing and quantity of the purchases in light of general economic and financial market conditions but with the goal of purchasing all outstanding debt within twenty years. Just by having the Federal Reserve hold all the debt, the American taxpayer will save hundreds of billions each year in interest payments. Moreover, as to the debt held by the Federal Reserve, the Federal Reserve will also be given the mandate of retiring and canceling this debt with discretion as to timing and quantity in light of general economic and financial market conditions but with a goal of retiring or canceling all of the federal government debt it holds within thirty years.

I was happy to see that my idea of having the Federal Reserve purchase significant amounts of government bonds was recently validated by the Federal Reserve itself. On February 9, 2011, Federal Reserve Chairman Ben Bernanke testified before the House of Representatives. He was asked about his Quantitative Easing 2 program under which the Federal Reserve purchased 600 billion dollars of treasury bonds in a few months. Bernanke was reminded that the Federal Reserve had overtaken China as the largest holder of U.S. bonds and was asked if he is not monetizing the debt and if he will not create inflation? As to inflation, he said even with all the debt purchases inflation is still low and businesses do not expect inflation to rise. He said he believes the Federal Reserve’s purchases of federal government bonds have created about three million jobs. He said rapidly growing economies like Brazil may face inflation risks but that the United States is not such a rapidly growing economy. He said that monetizing debt is when you print money and permanently increase the money supply. He said the printed money the Federal Reserve is using to buy debt is used as reserves and is not actually going into the economy. Whether or not such purchases constitute monetization of the debt makes little difference. It is better to run the risk of inflation than for an elderly couple to run the risk of eviction because cuts in their retirement or medical benefits or tax increases they cannot afford. The risk of inflation is a good check against Congress and will ensure that spending is kept under control even though under my plan, any deficit will be funded through bond purchases by the Federal Reserve. The more fiscally responsible Congress is, the less debt there will be for the Federal Reserve to purchase or cancel and the less will be the risk of inflation.

The Federal Reserve is especially well suited to play a debt and deficit reduction role under my plan. The Federal Reserve already has as part of its mandate the control of inflation – so it is in the best position to balance the debt purchases and cancellation under my plan against the risks of inflation. Significantly, unlike the Congress and the President, the Federal Reserve is not directly affected by electoral politics and can generally act quickly based on economics instead of politics. For example, following the 2008 financial crisis, a civil war broke out in Congress over the 750 billion dollar TARP program. By contrast, the Federal Reserve, with relative ease, was able to print and pump as much as nine trillion dollars (by certain calculations) into the economy to save it from collapse – the chairman of the Federal Reserve won Time Magazine’s Person of the Year for these efforts. If the Federal Reserve can print and lend as much as nine trillion dollars to Wall Street and win awards for doing so, the Federal Reserve can certainly lend a lot less money each year to the United States treasury to save the American people from more tax increases, spending cuts and job losses.

I will be unveiling my solutions to our other problems so be sure to keep checking in. I would like to have your support in the campaign and in the elections and pray that I am successful in challenging the natural born provision so I can take office if I win and together we can make our country even better.