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View Diary: Drive a stake in banksters' hearts - MINT THE COIN (18 comments)

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  •  Ridiculous (1+ / 0-)
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    Foreigners lending us money isn't about them lending US dollar bills. It's about them 'lending' us oil, cars, manufactured goods, coffee, cotton, computers, etc etc.

    The deficit is really a deficit of those things, not dollars. Printing money doesn't help with that, quite the opposite in fact. Foreigners aren't idiots like a lot of people here think they are.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Wed Jan 09, 2013 at 10:03:46 PM PST

    [ Parent ]

    •  What? (0+ / 0-)

      Then what are Treasury Auctions? Are you really trying to claim the deficit is not paid for by auctions of US Treasury securities? That the accumulation of deficits is really an accumulation of merchants and service providers, waiting years on the brink of bankruptcy for the US Government to pay up?

      Because... I had the impression that cash from the bonds my grandma got me, the Social Security trust fund, and T Bills sold at auction was used to settle the Government's invoices from its suppliers.

      "The Democratic Party is not our friend: it is the only party we can negotiate with."

      by 2020adam on Thu Jan 10, 2013 at 12:31:56 AM PST

      [ Parent ]

    •  Nope, not ridiculous (1+ / 0-)
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      The trade deficit can be considered that way. The USA as a whole is getting real goods in return for credit, which is represented by dollar bills or Treasury Bonds, which are really "one and the same thing". So we are getting a surplus, not a deficit, of "these things", which may diminish domestic capacity to produce them, true.

      But being able to buy stuff on credit is a GOOD THING.  Trade deficits are essentially a desirable thing.  True, foreigners are not idiots. The US dollars they get in return are not worthless. The losses caused by unemployment usually dwarf the benefits of a trade deficit, the costs of a trade surplus (which fights unemployment by increasing demand, one of the best things about it.)

      So we don't need "help with that". The sensible thing about a trade deficit is to enjoy it while it lasts. If "printing money doesn't help with that" - that is a GOOD THING.  (Quite likely true, if by "printing money" you mean run larger budget deficits, greater government spending, because the economic expansion will increase imports.)

      When one is able to buy stuff on credit, the craziest thing one can do is to quit one's job and live off the credit for a while.  That is precisely what austerity is. The relation of such trade deficits to austerity is that the foreign accumulation of IOUs, dollars, bonds decreases the amount of such running around the US economy, and is highly deflationary, and thus can cause unemployment and austerity if it is not accomodated by running a budget deficit, printing enough new dollars/bonds.  

      The relation with the platinum coin is that it weapon against austerity, deficit terrorism, deficit hawkery. Immediately, by bypassing the debt limit nonsense. Far more importantly, by removing the greatest weapon from the hands of the oppressor - the mind of the oppressed.  It is the same as "printing money" - what of it? What we do now, "printing bonds" is practically the same thing, especially at today's low interest rates. It is a good idea IMHO for left libertarians to study logically sound economics - MMT, Functional Finance, Keynes, Institutional Economics - rather than allow nonsense, no matter how widespread, like post 70s mainstream economics, to guide one into irrational beliefs and fears.

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