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View Diary: End the Austerity War Against the People: Mint the Platinum Coin! (52 comments)

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  •  Are you from Bachmans crew? (0+ / 0-)

    An idea as loony as this could only come from Bachman or Palin. Which is it?

    •  No. It's our status quo that's loony. (2+ / 0-)
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      Letsgetitdone, psyched

      So far as I know, no other government that has fiat money, has to borrow to fund their appropriations and then pays billions of dollars per year in interest on that borrowed money.  (The U.S. paid $414 billion in interest on its national debt in 2010 at a time of very low interest rates.)

      Coin seigniorage simply an unintended loophole pries the fingers of Norquist's followers off the throat of the U.S. government and gives it a mechanism to fund appropriations without borrowing, just like other governments that have a soverign fiat currency.

      The fact that it should involve the minting of a coin rather than the signing of a document seem to provoke great mirth, but that's not nearly so absurd as paying over $400 billion per year in unnecessary interest charges.

      •  Well put (1+ / 0-)
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        Let's just keep trying to get through.

      •  Not an unintended loophole (4+ / 0-)
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        Calgacus, wigwam, psyched, Letsgetitdone

        Using a coin to retire the national debt is not new. That idea has been floating around the halls of congress for a while.

        The 1996 statute I believe was written specifically to be able to retire the National Debt. The law was deliberately worded the way it was.

        Ellen Brown on page 372 in the 2008 edition of her book "the Web of Debt" says

        In the 1980s, a chairman of the Coinage Subcommittee of the U.S. House of Representatives pointed out that the national debt could be paid with a single coin. The Constitution gives Congress the power to coin money and regulate its value, and no limitation is put on the value of the coins it creates.8 The entire national debt could be extinguished with a single coin minted by the U.S. Mint, stamped with the appropriate face value. Today this official might have suggested nine coins, each with a face value of one trillion dollars.

        Tracing back the references, the book "You be the judge," in Chap 3 "Ponzi Scheme" quotes extensively from 1990 correspondence with the US Mint, corroborating the whole trillion dollar coin paradigm. Thus I believe, that when the opportunity arose in 1996, this strategy was deliberately written into the playbook.

        I think it is high time that the "National Debt" be "retired," and that it be renamed to what it really is - namely "government issued money held by the non-government sector." This can be quite easily accomplished using the PPCS option.

        Much of today's problems come from a deep misunderstanding of what money is, and in particular the nature of fiat currencies, on the part not only of common people, but also on the part of many economists and policy makers.

        Much confusion is caused by the use the term "National Debt." The US National Debt, is nothing but the amount of dollars that are "circulating" in the world. This includes currency, bank accounts, T-Bills, individual and business savings. In other words "dollar assets" outside the US Government. The question is how do you legally transition out of using this nomenclature. The current use of the term "National Debt" allows it to be used as a hot button issue, and conflates personal and business debt with "Government issued debt" and allows the common person to manipulated to act against his/her best interest.

        The platinum coin method is one legal way of transitioning away from the use of the term "National Debt."

        •  Thanks for that reference. Another question .... (2+ / 0-)
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          psyched, Letsgetitdone

          Hi Clonal.

          First of all, thanks for those historical references.  Secondly, what do other governments that have soverign fiat currencies do regarding the financing of their deficits, e.g., UK, Canada, Australia, etc.?

          Do they require their governments to borrow?  Does each appropriation include an allocation of credit at the central bank?  Do they print billion-dollar bills and/or billion-pound bills and deposit them in their treasury's account with their central bank.  Do they mint jumbo coins.  And so on.

          I find it hard to believe that other nations are wasting this much money on interest payments.

          •  They're all caught (1+ / 0-)
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            in the neoliberal web, and they all borrow their own money when they deficit spend. There's no reason for them to do it. But the FIRE sector wants it and no one wants to piss them off.

          •  Deficit Financing (1+ / 0-)
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            by borrowing or by "printing" is more of a policy decision. If one uses "fiscal policy" as the main tool, then likely "printing" is the preferred option. However if "monetary policy" is the preferred tool, then borrowing from the Central Bank is the option used. In recent decades, under pressure from the World Bank and the IMF there has been a shift toward using "monetary policy."

            Monetary policy makes it easier to control interest rates, but leaves spending decisions more to the private sector (primarily financiers)

            Fiscal policy has been viewed as the preferred tool of "centrally planned" economies, and therefore has a "bad" reputation.

            Similar effects can be reached probably by using both policies, though MMT theorists would maintain that monetary policy is a blunt instrument, and even if well constructed, does not work well under all circumstances, while fiscal policy, if well constructed will always work. However, fiscal policy in corrupt hands could potentially ruin a country.

        •  Thank you, clonal (0+ / 0-)

          I had seen the reference you linked recently and lost it. Thanks for posting it here.

          And thanks for the very clear explanation.

          For the first time in human history, we possess both the means for destroying all life on Earth or realizing a paradise on the planet--Michio Kaku.

          by psyched on Fri Aug 05, 2011 at 03:07:19 PM PDT

          [ Parent ]

        •  I agree (1+ / 0-)
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          That's why I want to pay it off. If we do that issue is forever off the table. Out of our politics. It's toxic to pogressives. Let's get rid of it!

    •  Why is it loony? (1+ / 0-)
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      And didn't you read the diary? Would Bachmann or Palin say this:

      “. . . there will be no spending cuts in this budget at all. In fact, I want a) a full payroll tax cut for employers and employees until full employment is reached; b) immediate lifting of the limit on number of weeks someone can get unemployment insurance; c) restoring food stamp program spending to its state before the recent cut; d) immediate revenue sharing for the States in the amount of $1,000 per person to enable State Governments to retain public service jobs; e) A Federal Job Guarantee program with a base wage of $8.00 per hour cost-of-living adjusted from the lowest cost of living SMSA in the nation upward, with full fringe benefits, and including Medicare enrollment for FJG workers; and f) an increase in SS payments by 50% effective immediately. Now, what is it you gentlemen want?”

      If you think so, then you're the one with loony ideas.

      •  It's so simple (0+ / 0-)

        It's just like those proposing the so-called "flat tax". It sounds so good. Therein lies the demons. It's a simple case of unintended consequences. You don't get something for nothing.

        Go ahead. . .try this haribrain scheme and just watch it blow up in your face: just as the teabaggers trying to limit government are about to see it all blow up in their faces. nearly all of the teabag states recieve more money from the federal government than they pay in.

        You can't get something from nothing: if it looks too good to be true, it's because it is.

        •  Well, look (1+ / 0-)
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          I understand there may be unintended consequences. I've tried to explore some of the likely consequences here. What I think we should do is to take the proposal seriously and try, as best we can, to analyze all the possible consequences good and bad.

          But you're not doing that you're just calling the proposal names and saying I'm afraid of something I don't completely understand. Well, I'm afraid to, but I'm a lot more afraid of the Rs are going to do to SS, Medicare, and Medicaid, if we just keep doing what we've doing before. We need to change the terms of the debate. We need to show people that there's no solvency problem so we can start funding programs to solve our problems. Do you have another solution that would change the climate quickly, that the President alone can implement? If so, I'd like to hear about it.

          •  No majic wand (0+ / 0-)

            There isn't oneL there never will be one. We got in this mess by allowing corporations and the wealthy to shirk their patriotic duties. The President should and could call them out on it.

            The President  should point out that corporations used to contribute over 20% of tax receipts: he should point out that it has fallen to just 6 1/2%.

            The President could also point out that an average tax payer making say 178,000 a year paid more in income taxes last year than GE, ExonMobile and Faux "News" combined. The taxpayers simple sence of fairness would be outraged if they knew those facts.

            This President needs to take his case to the people who elected him: it's high time for LEADERSHIP.

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