Worldwide, we are in an extreme circumstance financially and economically.  Debt realignment offers a moral, pragmatic, available means to end the debt that plagues the world and restricts the use of resources and credit.  Debt is a burden on people, resources, time, and capital.  Deficit spending is sometimes necessary.  Events happen, circumstances change, emergencies occur.  A country must have full utility of its assets.  This is only one reason why a robust economy is so crucial.  But when the debt becomes so large, and the only strategy is to look the other way and hope something positive will happen in the future -- and nothing happens, the debt just keeps getting bigger over the years, it needs to be addressed.   And with the present financial crises worldwide, it is obvious some means needs to be put in place to end this as quickly as possible and get the world economy back on track.  Global debt realignment will enable a better track, however, wider, smoother, more efficient with avenues, venues, and projects we only dream about now, and some we have yet to consider.  In each country all projects can be funded, and the global financial meltdown is vanquished at the same time.  What is hoped is that once on the other side of debt realignment we learn from the past and do not repeat the same mistakes.  This crisis is an opportunity.  If it is taken. 

Proposal:

It is proposed that an Economic Summit be called among the nations of the world.  At this Summit, with agreement among all national executives, legislatures, and central banks that this be done only once, by law, it shall be ordered by all governments that in all ledgers, all balance sheets, all accounts in the computers around the world, and on the books of all central banks and institutions that all debt be transferred as an asset, as a credit, to all creditor's accounts in their respective banks either in real terms, or as a ratio of the present debt, to be determined, to get all on an even playing field as of January 1, 2009.  If ths is done in present real terms, or as a ratio, this means currencies will have to be realigned also if not doing so would promote inflation.  Negotiations and discussions on this obviously will have to take place among the nations.  This writing provides the direction, the outline, hopefully the impetus for this to be a reality.  The specifics shall be determined by the various experts of different countries, the executive branches, and the central banks at the Summit.  

The goal is zero global debt among nations.  The Summit should occur before the end of 2008 with the debt realignment event date being in the first part of 2009.  The sooner the better.  If the Summit can occur quickly the event date actualizing debt realignment can be January 1, 2009.  It can be done.  It takes vision.  It takes courage.  It takes effort.  It takes leadership.  The European Union has also suggested a Summit, but at a Summit there must be a global plan that will work.  The world would welcome a plan that will work.  This plan will work. 

All creditors receive payment. 

All debt of nations will be released and all debtor nations released from their obligations.  All holders of national debt will be credited.   

No one loses anything but the debt.  No one suffers.  The creditor nations and international banks get asset capital on their ledgers.  The debtor nations lose their debt -- worldwide.  This is not debt forgiveness.  No one loses.  This is the essence of debt realignment. 

A new balance sheet in each institution is started with oversight and regulations in place, and with a new awareness of the pitfalls of wanton speculation and poor regulation.  Nations are free to prosper.   People can advance.  Everyone is free to put their house in order.  Nations can fully focus and fund the climate challenge, put their people to work, prosper.  The world can advance.   

Example:

A country owes 200 billion dollars to the World Bank.  Authorization is given to the World Bank to put on its books 200 billion in credit, 100%, or a ratio to be determined, derived from the debtor country's debt.  Since this is being done worldwide negotiations on this may be necessary, though not mandatory, to also align currencies.  The debtor country's debt is transferred as a credit.  The debtor country owes no debt.  The bank has credit to loan.  The country is free from the debt.   This can be repeated with every country, the poor and the rich.  Countries are free "to promote the general welfare" without the burden of debt.

Example:

America owes over a trillion dollars in Treasury Bills to different countries.  It is agreed that the holders of these bills be realigned as a credit in the amount of the debts in the bank where the debt is on the balance sheet as a debit.  The executive branch, legislature, and central bank authorizes credit to the Treasury account with the outstanding debt balance as a credit.  The Treasury Bills are paid off.  Interest payments cease.  Resources are freed.  Debt is gone.  We move on.  It is simple.  But simplicity is what we need now.  We do not need wild loans putting more debt and bondage on people, resources, and countries.  What if a country or fund does not want to cash in its notes?  The debtor's bank holds the credits in its account until such time as demand is made or maturity is reached.  In any event the governmental debt will equal zero after debt realignment with credits available on the balance sheet. 

Precedent:
 
The ancient Hebrews handled massive debt every 50 years with a "Year of Jubilee," where "all were returned to their possessions."  Leviticus XXV,  The Old Testament.

Let us not be so sophisticated in our minds to think that there is nothing to learned from this. But this too is different from debt realignment, in that debts are not just forgiven, credits are assigned to the creditors.  Debt realignment is the evolved model.  With modern technology and banking expertise, it can be done.  All we have to do is do it. 

To be sure, the International Monetary Fund, the World Bank, and the separate Central Banks of the nations around the world will be much more comfortable, as will Wall Street, other markets, individual investors, and workers, if this is accomplished.  

If I were calling the shots, I would do debt realignment across the boards, from top to bottom; that is, I would realign the debt of nations, companies, and individuals.  That will provide ultimate freedom to individuals, companies, markets, nations, and the world for progress and prosperity.  But getting global national debt realignment is difficult enough for most to understand and envision.  Since this is an extraordinary circumstance and that debt realignment would be done only one time, it is hoped that our leaders, meeting together in an economic Summit, will go to the farthest.