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I have a petition to President Obama up at: http://signon.org/... It's about minting that $60 T coin and ending austerity. The wording of the petition is:

”A 1996 law gives the Executive Authority to mint coins w/arbitrarily large face values and deposit them at the Fed. The President should immediately mint a $60 Trillion coin, and use the proceeds to pay off the national debt completely, cover all likely deficit spending by Congress over the next 15 years, and take the issue of spending cuts in programs that benefit the 99% off the table! Google "$60 Trillion coin" for background!”
The purpose is:
“Ending the emphasis in Congress on deficit reduction rather than the merits of policy proposals to create full employment, Medicare for All, & rebuilding education, US infrastructure, & energy foundations.”
A $60 Trillion Proof Platinum Coin could close the spending/revenue gap entirely in any fiscal year, and technically end deficit spending, while still retaining the gap between tax revenues and spending that can produce full employment. In addition, profits from the coin could be used to pay off the “national debt,” and would also remove the need to issue any more public debt in coordination with deficit spending for at least 15 years.

However, a $60 T coin is not only a solution for ending public debt, it also has the potential to take off the legislative/fiscal table the whole austerity mind set that bedevils our current budgetary process and provides it with a constraining conservative cast focused on narrow monetary costs considerations, rather than a broader progressive framework that weighs the real costs and benefits of proposed fiscal activities of the Federal Government.

The $60 T coin can free the Government from narrow green eye shade concerns and force both Congress and the Executive to evaluate the substance of legislative proposals based on their likely direct impacts and side effects on the lives of Americans, rather than their impact on Federal deficits and surpluses.

For example, currently we see before us proposals to drastically reduce the USPS in size after years of reduction in service and personnel and also proposals to cut already austere, by modern industrial nation standards, Social Security and Medicare programs, as well as massive spending cuts in other entitlement and discretionary programs. Why are we seeing these proposals? Would we be seeing these proposals if we were rapidly paying off the debt and we also had $ 44 Trillion in the Treasury General Account to be used for future deficit spending?

We're seeing them now because of the effectiveness of a 35 year propaganda effort by deficit and debt hawks who have persuaded many Americans that the government is like a household which has enormous debt that will be burdensome to pay back. This view is false. But we can't educate people about this in the near term. We can't counter the deficit hawk propaganda with our own messages about the complex facts of government finance.

On the other hand, if we mint that $60 T coin, pay off the debt, and still have $44 T left in the TGA, then all the effects of the 35 year propaganda campaign will immediately go away. The debt will just no longer be an issue. Then the issues will be about what people need, and what improvements we can make by working together through our Federal Government.

That gets to be the fulcrum of the new politics, not debt. I think that's where we want it to be. If you agree, you'll follow the link above and sign my petition!

If you need more background to make a decision see here and here. But please consider this. I have only 5 signatures so far and I need 50 to get to the next stage of the petition process. So, if you really want to end austerity, then let's get this over the first hurdle and let's see how far we can take it into the public's consciousness.

(Cross-posted from Correntewire.com.

Updated by psyched 5:10pm PDT: We're up to 20 signers of the 50 needed! Please sign now: http://signon.org/...

Update number 2:
We're over halfway there! 29 signers already. Tell your friends to sign the petition. Many thanks!

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Comment Preferences

  •  Actually a good idea (4+ / 0-)

    Coincidentally, a mainstream writer in financial press (Caroline Baum at Bloomberg News) is starting to see the same thing.  http://www.bloomberg.com/...

    Once we get over the unfounded fear of inflation, it's easier to see that more money is a faster fix than trying to tweak interest rates that can't be tweaked past zero.

    Our cause: a More Perfect Union.

    by Roby NJ on Sun Aug 05, 2012 at 03:35:38 PM PDT

  •  Maybe he could mint 330 million (1+ / 0-)
    Recommended by:
    OleHippieChick

    $182,000 coins and give each of us one for Christmas.

    I've read about this before and still can't quite see why it's just another useless gimmick from a common sense point of view.

    Moderation in most things.

    by billmosby on Sun Aug 05, 2012 at 03:58:02 PM PDT

  •  The problem I see is this... (0+ / 0-)

    The reason why the debt is so high in the first place is because during the Bush-Cheney administration they had a Sopranos-like policy of borrowing money that the taxpayer would be on the hook for, and then didn't do anything with it but pass it out to their friends.  Oh sure, they had the manufactured excuse of  a couple of wars, but they neither spent money on the troops nor had any plan for fighting/winning the wars.  The money went  to the military industrial complex, and from there a lot of it went to those offshore bank accounts now estimated to be worth some $21 -35 trillion dollars.

    We have a Republican House, something that is unlikely to change, what with the gerrymandering and voter suppression laws now on the books - and we could even end up with a Republican Senate too.  If they know there is an extra $44 trillion dollars laying around waiting to be spent, what's going to stop them from simply - in effect - transferring that to offshore bank accounts as well?  

    The problem isn't that there is no money.  It's that certain people took that money, offshored it, and consequently are so rich and powerful that no justice system can stop them.  We live in an oligarchy, not a democracy, and the oligarchs despise ordinary people and their craven need for infrastructure - roads, schools, hospitals, and the like.

    •  What you're saying, Miss Jones, (2+ / 0-)
      Recommended by:
      OleHippieChick, Roby NJ

      seems to add up to "there's nothing we can do; we are just screwed."

      If the "money is there", it can be spent on both good and evil. If it is not there, it cannot be spent on either. First, we need the money to be there, and then we need to work to see that Congress spends it on more good than evil. The president does have veto power and we have the power of the vote. (Or at least some power of the vote.)

      Please sign the petition. Thank you. Trust the diarist to have our best interests in mind.


      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 Sun Aug 05, 2012 at 04:41:38 PM PDT

      [ Parent ]

      •  Thanks (3+ / 0-)
        Recommended by:
        psyched, Roby NJ, Ian S

        Ed, nicely done. But Miss Jones, there's no need to trust me. the money can only be spent to pay down the debt and for Congressional Appropriations. So the question to ask is how have we been doing getting appropriations to the 99% with a context where the public debt number is very large and the voters have been persuaded that we have no money? Not very well, right? Defense always comes first. That's why people can be fooled. But what if money isn't scarce? What if there's plenty in the public purse for both the vital needs of this country and our perceived defense needs? Then it's much harder for the hawks to make their case against safety net expansions and all the very important things we have to do to rebuild our country.

        We do have to tax much more, even if we have plenty of money, because taxation isn't about the money it's about redistributing wealth to defeat and prevent plutocratic threats to democracy of the kind we have now.

  •  I.e., a tax, and not focused on the wealthy. (0+ / 0-)

    This would of course cause inflation and increase interest rates.

    It is, effectively, a flat tax. That tax being the inflation caused by it -- in aggregate, simplistically, $60T worth of inflation (about four years worth of US GDP) which transfers to the US treasury. This tax is inescapable and will hit the poor more than the wealthy.

    When inflation rises excessively, it wipes out savings of unsophisticated and small savers. Wages usually lag inflation in times of high inflation. While food, fuel, transportation, and rent (all necessities that the less wealthy spend a substantial portion of their income on) all increase at X% a year, do you think employers are going to make sure to increase wages by X% a year? It's more likely they will move the labor offshore to a country w/o high inflation.

    The wealthy would weather the storm more successfully. The enough money to pay for it to be managed creatively to avert, and perhaps even benefit, from such inflation. They also are in a position to take long term risks with large potential benefits since they are not relying on that money to pay rent or buy food. Generally the wealthy do better in times of economic chaos such as this proposal would cause. Note that this is similar to one thing that is forestalling the completion of the real estate collapse for a while -- wealthy investors with cash are buying thousands of properties in foreclosure and renting them out to those who don't have cash to buy or are too risk adverse to do so due to their limited resources.

    Inflation isn't something to fear in all cases. In fact, a modest degree of inflation can be healthy. When caused by demand slightly outstripping supply, it's a sign of a healthy economy with room for sustained growth. However when high inflation arises from monetary manipulation such as this, it's not a sign of health but rather a sign of a sick economy.

    Such manipulation would dramatically impact the ability of the US to borrow money at reasonable interest rates (inflation plus a bit) in the future (I know, "we wouldn't have to for 15 years, who cares, it's our kids' problem to deal with") as people recall loaning the US $10M via a two year treasury instrument in 2012 and getting back something worth 1/2 that in real dollars in 2014 after the coin was minted. It would be the end of US debt being considered one of the most secure instruments in the world as such manipulation shakes the confidence of the market and the market assumes the US would do it again whenever they wanted to shirk their debt.

    It's interesting that you have increased the proposal from $30T last year to $60T this year.

    Why not mint a coin for $1E1000 - that would easily finance all human activity in the world until the sun turns into a black hole. Every atom in the observable universe could be a billionaire and we would have only dented the pile of money (we would have about $1E910 left to deal with contingencies such as finding additional "observable" portions of the universe whose atoms demand their $1,000,000,000 each). Truly, that makes just as much sense as $30T or $60T (and probably more). Just think, no one would ever have to work again -- they could rely on the effectively infinite resources of the federal government to supply all their needs and wants.

    Seriously, this may not be a bad idea in a more limited fashion -- just print more money as needed to finance the federal government and get rid of the IRS. It's an inescapable and very easily administered tax for most people, black market and cash transactions don't escape it.

    •  Of course (3+ / 0-)
      Recommended by:
      psyched, clonal antibody, Roby NJ

      you don't have the vaguest idea of what you're talking about. This:

      "This would of course cause inflation and increase interest rates.
      "

      is baloney.

      Show us the causal mechanism connecting the minting of the $60 T coin to inflation, or stop BSing. Repayment of debt can't be inflationary because it doesn't add Net Financial Assets (NFA) to the economy except for the interest costs upon repayment. The rest of the $44 Billion can only be spent when Congress appropriates the money. As long as Congress doesn't appropriate more deficit spending than is needed to create full employment, then there won't be any demand-pull inflation.

      As for cost-push inflation, that's not due to Government spending anyway, and has to be controlled by increased production, regulation, anti-trust prosecutions, price controls, and rationing.

    •  Read Izabell Kaminska (3+ / 0-)
      Recommended by:
      Roby NJ, psyched, whenwego

      at FT/Alphaville - The Fed’s 1.6 trillion ‘somethings’

      So what’s at issue?

      It all revolves around Ben Bernanke’s quantitative easing — and especially with regards to the traditional understanding of how an economy works via tax and spend.

      That is, ordinarily wealth is produced, taxed and then re-distributed back into the economy.

      The tax is only the means by which that wealth, which has already been created, is redistributed.

      But as Cook notes:
         

      The tax and spend myth is that “tax-payers’ money” is first collected by the Fed and then spent, or lent.

          Bernanke blew that one away when he told the committee that taxpayers’ money was not involved when the Fed was busy easing quantitatively. The Fed created 1.6 trillion somethings, which banks accepted, either for their own account or a customer’s account, in exchange for the Treasury Bills they owned, and these somethings were, and still are, deposited with the Federal Reserve Bank as a custodian of … “reserves”.

          ——

          Bernanke confirmed the staggeringly simple reality that not a single taxpayers’ dollar is actually spent or lent when the Fed follows the Treasury’s instructions to credit any account, anywhere, for anything. This is because the Fed is creating – as an agent on behalf of the Treasury – an exact “look-alike” of a Treasury IOU or promissory note. ie the Fed is simply pledging the Treasury’s credit by creating tax credits.

      The point here is that based on the tax and spend model, paying a tax of $1 is the equivalent of seeing $1′s worth of tax canceled by the Fed as agent for the Treasury. The national debt goes down by $1.
      .
      .
      .
      .
      The same applies on a national level — meaning the US debt may not exist at all. It’s actually a fiction.

      As Cook explains:

         …it is a national equity, the greater part of which is interest-bearing either as claims over public or private revenues.

          At least two-thirds of the quasi tax credits created by banks came into existence as mortgage loans, and are therefore backed by claims over the productive value of the US land and buildings which they fund. Much of the rest consists of claims over the value of US assets which fund the productive capacity of US corporations. The remainder – which provides the credit necessary to finance the circulation of goods and services in the US – is based upon the magnificent productive capacity of the US people.  Only by liquidating US Incorporated could this National Equity ever be redeemed.

      Given that, the debt ceiling could arguably be considered a myth as well.

      After all the dilution of the “share” doesn’t impact the overall market capitalisation. It just means more people can make use of the wealth of the nation. The credit units (or outstanding shares) are just a facilitator for the distribution of that wealth.

      In which case the way out of the debt conundrum is not by restricting the creation of more shares, as is being debated, but by focusing on collectively building up the equity instead.

      As Cook concludes:

         President Barack Obama and his government should get busy creating national equity by instructing the Fed to create and issue the necessary finance for the creation of a new generation of US infrastructure; the transition to a low carbon future which the US can, and should, be leading; and in increasing the capacity of the US people to do so.
      •  Great comment (0+ / 0-)

        CA, as usual.

      •  But this . . . (1+ / 0-)
        Recommended by:
        psyched
        "President Barack Obama and his government should get busy creating national equity by instructing the Fed to create and issue the necessary finance for the creation of a new generation of US infrastructure; the transition to a low carbon future which the US can, and should, be leading; and in increasing the capacity of the US people to do so."
        Can't be done by the President alone. He needs Congress to appropriate, and he needs the mythical debt ceiling to be lifted or challenged in some way. The coin, I think, is the best way to challenge it, because paying off the debt, would change that all important context within which politics happens.

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