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Memes are a strange thing. One never can really predict what will catch on and what will die with a mingy wimper. Still, economist Stephanie Kelton has to be pretty thrilled that #MintTheCoin has gained traction. She, and the entire rest of the Modern Monetary Theory (MMT) community of economists, have certainly been waiting long enough. #MintTheCoin is Dr. Kelton's (@deficitowl) current contribution to Twitter and it's an important one but I'll bet you don't know why.

Hint: the answer isn't "debt ceiling."

Hop below the fold for more.

The meme has caught fire and is being promoted by the likes of both Paul Krugman and Salon (...'nuff said) as a solution to the debt ceiling via the hastily lashed together vehicles of the 14th Amendment to the US Constitution and Title 31 of the United States Code Subtitle IV, Chapter 51, Subchapter II, Section 5112. I am not going to repeat the basics of the meme because they are splashed all over the web. If you have been dead for the last couple of weeks and somehow missed them you can catch up here, here, and here. There is also, of course, the idiotic GOP response codified, for the moment, the bill being introduced by Congressman Greg Walden (R-OR) to prevent the President and Secretary of the Treasury from taking the option of the now infamous platinum coin. My favorite part of this legislation is that it tacitly acknowledges that the Secretary of the Treasury really does have the right to mint the coin making any argument to the contrary just that much more difficult. Derp. The part of this legislation that makes me want to put my face through glass is when the Congressman drops his pail down into the my-small-business-can't-print-money-well to which I respond,

Listen up, Dimwit, the US Federal Government is NOT a business or family and it CAN and SHOULD print money.
Now, I'll grant you that the world is a big place and some of you thought you had better things to do than to read my post on Modern Monetary Theory vs the Fiscal Cliff (this link is to the Daily Kos cross-post because the discussion thread was excellent there) but if you do not understand the statement above, stop now and read the older post. I'm not kidding. Stop. Now. Thump!

For everyone who did not stop I am going to go forward with the assumption that you fully understand the following things:

The budget of the Federal government is in no way, shape or form like that of your family or of any business and likening the Federal budget to the budget of a small business is the same as likening kittens to helicopters. (Ok, both look pretty funny when they are flying through the air but other than that....)
The Federal government is not balancing a budget, it is balancing an economy and the delimiters of that balance are unemployment, exchange rates and inflation. Period. End of story.
Deficits mean NOTHING. Debt means very, VERY little.
The US economy has nothing what-so-ever in common with any country which uses the Euro so comparisons to Spain or Greece or Italy are, again, kittens to helicopters.
Again, if there are any of the above which are unclear to you, go back to the older post. I mean it. glare

What has to be thrilling the MMT community to the tips of their pointy little heads is the fact that the platinum coin is breaking into consciousness at all because they have been talking about it for a long time for a whole different reason.

Zeroing Out the US Debt

News Flash: the platinum coin could be used to zero out the entire US debt held by the Fed. Done. Gone. I'm going to nibble on some hay while you think about that. ... ... ... ... ... ... Done? I didn't think so but no one has ever credited me with patience.

There are, of course, two things to know about this approach and the most important is that it is totally unnecessary because given the current (stronger than you realize) position of the US economy and the fact that we have a fiat currency, debt actually means very, VERY little. It is, essentially, a matter of an internal balance sheet adjustment and if someone wants to make a pretty little coin or two or fifty to make it more real, well isn't that just precious. What this would do instead is allow the funds which are being spent in service of our current debt to be pumped back into the private sector, in a controlled fashion, until we have reached full employment, at which point the spigot would be reduced to a normal flow.

What's that? I can hear the anguished screams all the way from here. No, inflation is not a factor. Inflation is caused when demand exceeds supply and our economy is no where close to that margin. There is huge room for growth and capacity utilization rates remain exceedingly low. There, there. pat, pat I know. It's a shock because those GOP bullies have been pushing the Debt-bad/Inflation-nigh meme for so long and you actually had started to believe it. If you need more solace on this issue, go to Bill Mitchell at his Billy Blog, for an excellent explanation.

Snipe Hunting

The real truth is that debt isn't bad. At least, not at our current levels and in our current financial position. Still, we have listened to the GOP and the Tea-baggers rail on it for so long that it is as if we, as a nation, have been on a snipe hunt and we actually believe there are real snipes out there. Let me do you this favor and smack you upside the head, SMACK! Wake up!!!

There are not now and there never were actual snipes and because it does not serve our nation and economy for the private sector (all US individuals and businesses) to be in the red and because we will absolutely have a trade deficit for the foreseeable future (which is the international sector), the laws of accounting (if confused, refer to both my previous post on MMT and my previous glare) say that the public sector (the Federal budget) MUST be running a deficit. If we just can't make ourselves comfortable with that than let's pretend otherwise by zeroing out the debt with a magical coin. Here's the bottom line. The debt means NOTHING and the coin means NOTHING and using them to cancel each other out so that we feel better is silly but not necessarily a bad thing. Plus, of course, it frees up all the money necessary to get everyone who wants to work back to work... oh, and to invest in the changes necessary to address climate change, invest in education, rebuild our national infrastructure, solve the long-term healthcare crisis...among a few other little things.

The IMF's Giant Facepalm

...and then there's the International Monetary Fund (IMF.) These genius' have been at the head of the austerity bandwagon for years as they have dutifully strong-armed (and worse) economy after economy into the ground with their iron-clad commitment to austerity. ...except they were wrong. Totally and completely, absolutely and irrevocably (in some cases) wrong. Now, it's one thing for me to say this. What is one rabbit against the all-powerful genius of the IMF? So I had to laugh (and cry a little) when they finally acknowledged they have been wrong all along. As it turns out, when an economy is struggling and it implements austerity, things get worse. Conversely, when countries, like Germany, Austria and the US (thank you, President Obama), use stimulus, they experience improvement. Why? Because (and here I apologize for repeating myself) a country is not balancing a budget, it is balancing an economy. WHO CARES what a ledger says! What matters is that people are working, the temperature of inflation is cold and the exchange rate is reasonable. Those are the only three things that matter. Everything else is just a snipe no matter what the Tea Party or the GOP or the IMF has to say.

In Closing

The Giant Platinum Coin IS an interesting concept. It IS worth thinking about but it is wasted on an imaginary "problem" like the debt ceiling. Oh, it's not that it can't or shouldn't be used there. It's just that if we really want to get the GOP to shut the thump up and we really want to change the future of our country and the lives of our citizens, we won't just stop there. But that is, of course, just one rabbit's opinion.

Cross posted from WordPress.

Arliss' Bio: I am a 13 year old lop rabbit who graduated from the University at All-Bunny (SBUNY) with a degree in Disapproval and I  started out blogging at arlissbunny.wordpress.com. I had already garnered fame with my selection for the Disapproving Rabbits website but I began blogging and tweeting (arlissbunny) when I was relegated, by my staff, to live in Just to the Right of Nowhere (southeastern Indiana, or IN-06 to all of you) for an entire year. While said staff was rudely frolicking in Ireland without me I became significantly more media savvy. I decided that holding my tongue about the insanity of human politics was a thing of the past. I have generously opted to allow my secretarial staff to post comments as herself but all blogs will be from me. I'm the brains of the operation. My suggestion to all those of you who lack a sense of humor about blogging rabbits would be to remove the carrot from your posterior. Thump!

Originally posted to Arliss Bunny on Tue Jan 08, 2013 at 03:00 AM PST.

Also republished by Money and Public Purpose.

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Comment Preferences

  •  Tip Jar (7+ / 0-)

    "When in doubt, do the brave thing." - Jan Smuts

    by bunnygirl60 on Tue Jan 08, 2013 at 03:00:06 AM PST

  •  Is part of the equation "moral hazard"? (3+ / 0-)
    Recommended by:
    bunnygirl60, DRo, Old Surgeon

    Are "the powers that be" worried about the average Joe finding out that money, the be-all and end-all of most people's lives; is just a chimera?

    Another idea that keeps rattling around in my skull is a "secret jubilee". Whereas the world leaders get together at Davos or G20 or wherever and agree to "retire" 25% or so of national debt through a little creative bookkeeping. In other words, just shred it. Who would know?

    We're fools whether we dance or not, so we might as well dance.

    by PowWowPollock on Tue Jan 08, 2013 at 03:41:22 AM PST

    •  It is only a chimera when it isn't in circulation. (4+ / 0-)
      Recommended by:
      mwm341, hestal, offgrid, katiec

      The collective belief nature of fiat currency is oft a subject of discussion but once currency is in circulation, it is participating in the borader act of economic creation. When it is just sitting on ledgers at the Fed and the Department of the Treasury, it is truly imaginary. So platinum coin seigniorage starts to sound slightly less insane and just a tiny bit more like a really good idea.

      "When in doubt, do the brave thing." - Jan Smuts

      by bunnygirl60 on Tue Jan 08, 2013 at 04:00:14 AM PST

      [ Parent ]

      •  Philip Diehl's comments (0+ / 0-)

        on how the platinum coin works

        Diehl was also the Chief of Staff to Senator Lloyd Bentson of TX

        From The Razor’s Edge, John Carney and The Trillion Dollar Coin

        From Philip Diehl, Mint director who wrote the platinum coin law:

        The claim that minting a trillion dollar platinum coin is unconstitutional was no basis whatsoever. Congress has given Treasury broad discretion in minting coins since the founding of the republic, and its power to do so is rooted in the Constitution (Article 1, Section 8). Moreover, the accounting treatment of the coin would be identical to other coins produced by the Mint–no different from a quarter.

        Here’s a brief on the subject:

        I’m the former Mint director and Treasury chief of staff who, with Rep. Mike Castle, wrote the platinum coin law and produced the original coin authorized by the law. Therefore, I’m in a unique position to address some confusion I’ve seen in the media about the $1 trillion platinum coin proposal.

        * In minting the $1 trillion platinum coin, the Treasury Secretary would be exercising authority which Congress has granted routinely for more than 220 years. The Secretary’s authority is derived from an Act of Congress (in fact, a GOP Congress) under power expressly granted to Congress in the Constitution (Article 1, Section 8).

        * What is unusual about the law (Sec. 5112 of title 31, United States Code) is that it gives the Secretary complete discretion regarding all specifications of the coin, including denominations.

        * Moreover, the accounting treatment of the coin is identical to the treatment of all other coins. The Mint strikes the coin, ships it to the Fed, books $1 trillion, and transfers $1 trillion to the treasury’s general fund where it is available to finance government operations just like with proceeds of bond sales or additional tax revenues. The same applies for a quarter dollar.

        * Once the debt limit is raised, the Fed ships the coin back to the Mint, the accounting treatment is reversed, and the coin is melted. The coin would never be “issued” or circulated and bonds would not be needed to back the coin.

        * There are no negative macroeconomic effects. This works just like additional tax revenue or borrowing under a higher debt limit. In fact, when the debt limit is raised, Treasury would sell more bonds, the $1 trillion dollars would be taken off the books, and the coin would be melted.

        * This does not raise the debt limit so it can’t be characterized as circumventing congressional authority over the debt limit. Rather, it delays when the debt limit is reached.

        * This preserves congressional authority over the debt limit in a way that reliance on the 14th Amendment would not. It also avoids the protracted court battles the 14th Amendment option would entail and avoids another confrontation with the Roberts Court.

        * Any court challenge is likely to be quickly dismissed since (1) authority to mint the coin is firmly rooted in law that itself is grounded in the expressed constitutional powers of Congress, (2) Treasury has routinely exercised this authority since the birth of the republic, and (3) the accounting treatment of the coin is entirely routine.

        * Yes, this is an unintended consequence of the platinum coin bill, but how many other pieces of legislation have had unintended consequences? Most, I’d guess.

        Philip N. Diehl

        35th Director

        United States Mint

        en.wikipedia.org/wiki/Philip_N._Diehl

        A similar comment was posted at PragCap
        •  I'll let the master, letsgetitdone, answer via his (0+ / 0-)

          post at http://www.dailykos.com/.... Constitutional lawyers have been looking at this option for some time and seem to be in relative agreement that Mr. Deihl is wrong. It doesn't matter what he thinks the law was designed to do, how it is written is the test. Letsgetitdone has much more detail.

          "When in doubt, do the brave thing." - Jan Smuts

          by bunnygirl60 on Tue Jan 08, 2013 at 12:33:04 PM PST

          [ Parent ]

          •  Amy (1+ / 0-)
            Recommended by:
            bunnygirl60

            I think you are misreading what Diehl is saying. He agrees with Joe. In fact according to Kos, Diehl says

            You've written the best article I've seen yet on the trillion dollar platinum coin idea. [Those kudos are for Letsgetitdone/Joe Firestone-- kos.]
            •  Umm - yep. *facepalm* (0+ / 0-)

              I couldn't understand why most of the post sounded like it agreed but the beginning sounded like it didn't. I misread the first paragraph. Derp. That's what I get for trying to read so much, too fast in too many different places. I think I'll have some tea and slow down.

              "When in doubt, do the brave thing." - Jan Smuts

              by bunnygirl60 on Tue Jan 08, 2013 at 01:43:05 PM PST

              [ Parent ]

    •  I think you are confused. (0+ / 0-)

      And it is understandable. We have been laboring under a bad economic model for more than two centuries. Under the current model cancellation of debt is of benefit to the debtor and a detriment to the creditor. Under the MMT model, we can, if we wish, erase the debtors debt, but keep the creditors assets. Both sides of the equation are unharmed. True, the debtor gets a larger benefit, but the creditor is not harmed.

      Now, this might make one think that such an arrangement would be inflationary, but that it is not the case. Right now we have many creditors with lots and lots of cash and other assets which they are just sitting on. Cash can only go so far. So let the creditor keep his assets. He will continue to do what he does today--sit on them.

      But if new goods and services are created by the billions of people who now are free to use their brains and their energies productively, then the creditor with lots of cash will be enticed to spend some of it on the new things. This is not inflationary, it is expansionary and the world economy will grow immensely. Life will be beautiful.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Tue Jan 08, 2013 at 05:55:11 AM PST

      [ Parent ]

      •  The readiness of the government to provide (0+ / 0-)

        risk-free asset storage and pay interest to boot is one hell of an expensive service provided by We the People. We have to create $360B per year in new money to provide that service to savers - why not tell savers to find another place to keep their dough and put the $360B into jobs? Same money, much better economy. And with a better economy there will be other great places for people to store their savings.

  •  Good diary, thanks. However... (2+ / 0-)
    Recommended by:
    Old Surgeon, offgrid

    I think that the family economic model has much to recommend it. It has things that our current model does not have. So, to guide us going forward I recommend that we produce a new model which is the family model with the fiat currency added to it and replacing the old "I've got to have a job," current model.

    In this new model we will find that we can use the fiat money to make plans across generations and for one hundred years, just as families do today, only they may not all realize it.

    Like families, our national financial plans should include specific features for four generations: 0-25, 26-50, 51-75, and 76+. This budget would cover 100 years of fiat currency expenditures. So, America will then move forward a century at a time. Think about it a little, it works. Each generation has different needs and different capabilities, most of which are biologically dependent.

    Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

    by hestal on Tue Jan 08, 2013 at 05:47:00 AM PST

    •  Please take note, because this is important. (0+ / 0-)

      When anyone uses "small business" or "family" as the narrative, no matter what we add into the story, it takes the gentle reader into the wrong framework in their head because (and this is why Arliss was so insistant that those reading this diary have read her previous diary on the subject) there is nothing in the family or business reference system to account for the ability to create money from thin air. The more people hear "family" the more deeply they become sorely misinformed and a serious disservice is done to their ability to grasp the true nature of the questions before us. If people come away from any introduction of MMT that they read, rabbit endorsed or otherwise, this key difference is an essential, critical, baseline one. ;-)

      "When in doubt, do the brave thing." - Jan Smuts

      by bunnygirl60 on Tue Jan 08, 2013 at 11:00:26 AM PST

      [ Parent ]

      •  I have no idea why you made this comment. (0+ / 0-)

        I can only conclude that you did not read, or did not understand my comment.

        This happens a lot to people who are sure that they are smarter than everyone else, they just ignore what the others say. These people who think they are so smart are in such a rush to correct everyone else that they miss much of what is going on around them. Have you ever known anyone like that?

        I hope you will read and reread these three comments, because it is important. ;-)

        Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

        by hestal on Tue Jan 08, 2013 at 11:49:35 AM PST

        [ Parent ]

        •  Ok, you are rude but I will try to respond in (0+ / 0-)

          another way because perhaps I did not make myself as clear as I intended.

          When the concept of family finance in brought to mind, everyone thinks of the same thing, they think of balancing their own checkbook. It is a huge paradigm and widely shared across our society. One of the things the GOP does well, sadly, really well, is to tap into emotional narratives. The concept of "family" finances is one of these narratives. If we use the same term and tap the same paradigm, we have to make the massive effort to shift the paradigm. It is easier, much, much easier, to tell a different story. I am not the person for that job, perhaps you are. Perhaps you can think of a new way to convey the MMT parameters that people will be able to easily grab on to and understand without having to change what they already think they know to be true.

          PS - Arliss is smart. I'm just an idiot who takes dictation from a rabbit.

          "When in doubt, do the brave thing." - Jan Smuts

          by bunnygirl60 on Tue Jan 08, 2013 at 12:44:08 PM PST

          [ Parent ]

          •  I think I can do a better job than you based (0+ / 0-)

            on your comments in this thread.

            In this last comment you simply repeat what you said in the first one. Repeating the same thing and expecting different results usually is not a smart thing to do.

            And in both cases you failed to comprehend what I wrote in my first comment.

            In your mind, you seem to think that the MMT approach will necessarily be inserted into the current economic model. That model makes no plans, sets no goals for our population. It does not have a way to define the common good. This is a great part of the problem because the few people who grab control of the current government do what they please and leave the rest of us out.

            But families go another way. They make plans and they care about each member of the family. What is more, they make generational plans, they are not limited to the here and now (although the current system often forces that on them).

            Perhaps you should consider that the reason the family model persists for most humans is that it works. These humans, when they say that government should be run like a family, really mean it. They are thinking of the things I just listed above. So stop trying to manipulate people because you think they misunderstand. You are the one who misunderstands.

            Let me add, that I can see far down the road as to where MMT can take us, and I have been waiting for you and the other MMT'ers to catch up. You will, I am sure, but I wish to hell you would do it soon.

            Time is wasting and lives are at risk.

            So, leave me alone, and try to think that just because some idea is new to you does not mean that it is new to me, and just because you cannot think of a way to do something does not mean that I can't.

            In the aftermath of WWII I heard veterans talk about government funding of national projects to build a better America, and these men could not see why the government could not just print the money. This is after all, what MMT is proposing. And even before that Keynes wrote that the primary goal of government should be to make lives easier for its citizens, including full employment paid for by printing money. So the MMT idea is not new. I repeat it is not new. And neither is the family model.

            Also, in my working life I designed large scale systems for large scale enterprises. In order to be successful I had to devise ways to convince my customers to buy my systems. The best way to to do this was to explain things in the terms that mattered to them. That is what you should do. I have watched the MMT'ers on video, I have read their papers and some of their books, and they do a pretty poor job of selling their ideas. But letsgetitdone had done a great job and he is getting better.

            Have a nice day.

            Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

            by hestal on Tue Jan 08, 2013 at 01:14:18 PM PST

            [ Parent ]

            •  I'm going to try one more time. (0+ / 0-)

              First of all I did make a mistake in responding to one person and when someone else pointed it out I saw what I had done and corrected myself, which I am more than happy to do. If you read the thread from my previous post on this subject, which included a very long and really interesting thread, you will see that I am happy to learn from others and to be corrected. I simply do not agree with you and neither does the MMT community.

              You said;

              In your mind, you seem to think that the MMT approach will necessarily be inserted into the current economic model. That model makes no plans, sets no goals for our population. It does not have a way to define the common good. This is a great part of the problem because the few people who grab control of the current government do what they please and leave the rest of us out.
              This is factually incorrect. MMT is not an insert into a "current economic model," it IS an economic model. Additionally, like all economic models, it is not policy it is a model. It is the model that has emerged since Bretton Woods, plain and simple.

              Your philosophy about families is fine and it is all very cuddly but it is not economics. You sound like all those in the GOP who deny science because they are telling themselves some other story. The earth is more than 6000 years old and MMT is how our economy has been running ever since the Nixon Shock. That economic policies have changed and that MMT has not been well understood by those who received their training in economics prior to the elimination of the gold/silver standard is not a surprise. It is a process. That PCS is currently under discussion is an indicator that the principles of MMT are becoming more widely understood, disseminated and that the policy space within the model is better understood than it once was.

              Let me add, that I can see far down the road as to where MMT can take us, and I have been waiting for you and the other MMT'ers to catch up. You will, I am sure, but I wish to hell you would do it soon.
              Oooooo - we are all very impressed.

              LetsGetItDone IS doing an amazing job as are Dr. Kelton and Bill Mitchell and many, many others. I fall at their feet but that doesn't mean I don't have something to add. When I posted this, LGID had not yet posted the first of his "small ball" posts. If someone, not you because you clearly have problems, reads those (and they are awesome) and they also read this, it is easy to see that this post is the much, much, MUCH simplified version of what LGID is doing. A huge percentage of people will struggle trying to get through LGID's posts. They are GREAT but they are dense. Without introducing any narrative at all I am just providing a "Small Ball for Dummies" version. Period. That's my only goal. I'm not trying to be LGID because he has that covered.

              I am repeating what LGID and everyone else in the MMT community has been saying when I say (again, because you really, really, REALLY don't get it) the federal government is nothing, nothing, NOTHING at ALL like your beloved family and if you can't see beyond that box than I am sorry but those limitations are your own.

              The MMT community is, progressively, developing a narrative. The reason Arliss' last post was copied around the world to so many of the major MMT blogs and sites was precisely because it is considered the, as they (not I) said,"MMT for Dummies" overview. MMT economists have spent a long time just talking amongst themselves and very, very little time trying to explain themselves to non-economists. I am willing to wait while they develop a public narrative that is simple yet still encompass' the ground truths of the model.

              BTW - my background in engineering, manufacturing,  computing and international marketing is pretty massive - likely trumping the one you are trying to use to intimidate me but I write under the auspices of a rabbit for a reason and I'm going to elect to stay that way. Oh - and the manufacturing company I own grew more than 50% last year...in a down economy, so don't give me the marketing crap either. You are trapped in long ago times and the world is moving forward with or without you. Hang on.

              "When in doubt, do the brave thing." - Jan Smuts

              by bunnygirl60 on Tue Jan 08, 2013 at 02:23:24 PM PST

              [ Parent ]

              •  Go away, kid you are beginning to annoy me. (0+ / 0-)

                Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                by hestal on Tue Jan 08, 2013 at 02:33:30 PM PST

                [ Parent ]

                •  Right back at 'cha. (0+ / 0-)

                  "When in doubt, do the brave thing." - Jan Smuts

                  by bunnygirl60 on Tue Jan 08, 2013 at 03:35:21 PM PST

                  [ Parent ]

                  •  Hestal (1+ / 0-)
                    Recommended by:
                    Calgacus

                    was born before WW-II and has a slightly longer perspective than you or me, who are "boomers" - so do look at it from his perspective.

                    •  Sorry I got hear late (1+ / 0-)
                      Recommended by:
                      Calgacus

                      MMTers are understandably skittish about doing anything but debunk the family model However, it is used from time to time. I've seen Warren do it at talks where he asks people to think about a mother and father who have control over a fiat currency, and also children who must work at household chores to earn the fiat currency so they can get goodies. So, MMTers will use a household analogy from time to time when it's properly modified.

                      Also, Randy Wray recently had a reframing post which adopted Bruce Springsteen's meme "we take care of our own." That is a family-based meme. I've used it also in this post.

                      •  It all depends on who your customers are... (1+ / 0-)
                        Recommended by:
                        Calgacus

                        If you want to sell MMT to ordinary citizens then use the family model. I can't say what to use if you want to sell it to other schools of economic thought, but I can say that such an effort is largely a waste of time.

                        I guess I would like to know just what you MMTers are after. Is this simply an intramural argument between economists? If it is, then color me "gone."

                        But if you are trying to change the world then go straight to the People.

                        Right now this whole kerfuffle feels like a purely academic argument. I got sick and tired of those in graduate school fifty years ago. I was at the board explaining a proof of a theorem in Ring and Group Theory class when I was seized with an overpowering urge to go water skiing. I turned to my professor, thanked him for his time, and went straight to the administration building. I withdrew from school and within two hours I was on the lake. It was a beautiful day, the water was like glass, the sun was warm, and the girl driving my boat was a knockout. Best decision I ever made.

                        My father, who had the outlook of a philosopher, used to say that there are three eternal questions which engage mankind: Where did I come from? Where am I going? What should I do while I am here?

                        My mother, who had the outlook of an engineer, would counter with her four eternal questions: Where do we stand? How did we get here? Where do we want to go? How do we get there from here?

                        I would often talk to my father about the myriad answers to his questions, and it was lots of fun. But he always closed the discussion with a reminder that I should answer his third eternal question, What should I do while I am here? by trying to answer Mother's four eternal questions. They were wise.

                        Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                        by hestal on Wed Jan 09, 2013 at 04:34:11 AM PST

                        [ Parent ]

  •  Great exposition of the issue (2+ / 0-)
    Recommended by:
    bunnygirl60, offgrid

    I personally like the Quadrillion dollar coin because in a fiat system the nation's treasure in money is infinite. A $10^15 coin would push exhaustion of the current purse so far into the future that by the time we got there the whole narrative will have changed and the need for the second $10^15 coin should be overcome by a general decrease in our silliness quotient. Because the only way for bad old ideas to really die is for those who hold them to do the same. Tincture of time.

  •  Just make 16 coins, pay off the National Debt. (1+ / 0-)
    Recommended by:
    offgrid

    Leaving us $16 Trillion in "credit limit" on the charge card. Then push for multiTrillions in stimulus to rebuild our infrastructure, build an interplanetary transport/research spaceship, a new bigger Space Shuttle, multiple robot ion-drive ships to neighboring star systems, Clean Coal, Fusion reactors, cure all disease.... all the while putting tens of millions of Americans to work in high paying jobs.

    The 10's of Trillions in expanded economy will more than make up for the magic coins in as little as 10 years. Grow the GDP to 20 trillion to 50 trillion, and the entire world follows us.

    Meanwhile implement 1 child per family world wide for 2 generations to get the population down to 2 Billion permanently and everyone will have a high standard of living, on a sustainable planet.

    •  I don't know about implementing one child per (0+ / 0-)

      family. As I understand it, the birth rate is in a rather steep decline among all groups in the States with the exception of Latinos. Perhaps, essentially, it is self-regulating?

      The rest of your suggestion is in keeping with MMT principles with the exception of the fact that once full employment is reached the other end of the balance, inflation, has to be watched less the economy become over-heated. This, of course, would be done through mechanisms which are already available to the Fed.

      "When in doubt, do the brave thing." - Jan Smuts

      by bunnygirl60 on Tue Jan 08, 2013 at 10:53:33 AM PST

      [ Parent ]

    •  First (1+ / 0-)
      Recommended by:
      bunnygirl60

      we need only one coin for $16 T. Second, why do any deficit spending with debt financing? Just use PCS for that, and get rid of debt financing entirely.

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