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By Tim Price, originally posted on Next New Deal

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The Post-Crisis Crises (Project Syndicate)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that policymakers shouldn't let short-term conflicts like the fiscal cliff distract them from long-term problems like adapting to climate change. They'll regret wasting their breath when everything's underwater.

Calling McConnell's Bluff (Prospect)

Robert Kuttner writes that while Republicans are talking a good game about the upcoming debt ceiling battle and the possibility of a government shutdown, there's no reason for President Obama to fold this hand when he's got the Fourteenth Amendment card to play.

Be Ready to Mint That Coin (NYT)

Assuming that the Constitution alone can't make the GOP back down, Paul Krugman thinks the White House should exploit the loophole that allows it to mint a $1 trillion platinum coin. Or in the words of George Costanza, "You wanna get nuts? Come on, let's get nuts!"

Why Platinum Coin Opponents Are All Wrong (Bloomberg)

If you think the platinum coin idea seems a little ... weird, like an internet meme that escaped into the wild and went feral, Josh Barro provides four counter-arguments. After all, what sounds more insane: paying our debts with novelty coins, or defaulting for no reason?

Democrats signal intention to tackle the 'submerged state' (MSNBC)

Ned Resnikoff notes that Democrats are targeting tax credits and deductions that benefit the rich and make up part of what Suzanne Mettler calls "the submerged state" -- the kind of aid that the government disguises like it's trying to trick its dog into swallowing a pill.

The Cliff Game (NYT)

Nancy Folbre writes that Washington's budget battles have turned into a high-stakes game of chicken between the two major political parties, but the Democrats have more incentive to swerve in order to avoid leaving tire tracks on the backs of their constituents.

We don't have a spending problem, we have a military spending problem (WaPo)

Ezra Klein argues that if Republicans like Paul Ryan want to be taken seriously when they complain about excessive government spending, they need to admit America won't exactly be fighting blindfolded with Nerf bats if we trim down the $530 billion defense budget.

Women on Corporate Boards Bring More Aggressive Action (Forbes)

NND Editor Bryce Covert highlights a report that shows the presence of women doesn't cause corporate boards to spend more time crocheting and talking about Downton Abbey. They tend to focus on other things, like making sure the company is actually run well.

Inside the Radical Plan to Fight Foreclosures With Eminent Domain (MoJo)

Josh Harkinson talks to Steven Gluckstern, who advocates using cities' power of eminent domain to seize loans from lenders and help prevent foreclosures. Critics find his motives suspect, unlike the very straightforward desire of banks to throw people out on the street.

Rescued by a Bailout, A.I.G. May Sue Its Savior (NYT)

Ben Protess and Michael De La Merced report that after launching its "Thank you America" ad campaign, AIG may express the depths of its gratitude by joining a shareholder lawsuit alleging that the terms of the bailout were too harsh. Really? The building's still standing.


Originally posted to Daily Kos Economics on Tue Jan 08, 2013 at 07:04 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Can we use Platinum coins to fully fund things? (1+ / 0-)
    Recommended by:
    Words In Action

    Especially when the Congress fails to?

    Happy little moron, Lucky little man.
    I wish I was a moron, MY GOD, Perhaps I am!
    —Spike Milligan

    by polecat on Tue Jan 08, 2013 at 07:57:40 AM PST

    •  No - that's not the point (2+ / 0-)
      Recommended by:
      glorificus, DRo

      The point is that through a fully Constitutional process, the Congress (as elected) has agreed to fund/pay for programs at the levels it voted for them -

      the 14th Amendment compels the Executive Branch to make good on the debts and obligations of the U.S.

      Hence, the Executive can coin money to pay what Congress has already agreed to pay for.  It can't go back and add money to programs not fully funded by Congress.

      The object of persecution is persecution. The object of torture is torture. The object of power is power. --George Orwell

      by jgkojak on Tue Jan 08, 2013 at 11:46:44 AM PST

      [ Parent ]

    •  all coins are currency by fiat (1+ / 0-)
      Recommended by:
      DRo

      they do not have inherent value.

  •  Can we figure out a way to use a platinum coin (2+ / 0-)
    Recommended by:
    WheninRome, glorificus

    to buy out the contracts of Republican Senators and Congressmen?

    I would support funding that program in a heartbeat. I'm sure it would have a great ROI.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Tue Jan 08, 2013 at 08:12:42 AM PST

  •  If the govt can mint platinum coins (2+ / 0-)
    Recommended by:
    glorificus, George Hier

    Why do we have to pay any taxes at all? If money can be pulled out of thin air then there's no point in extracting it from the productive labor of the general public.

    Just mint as many trillion dollar coins as you need to run the govt. every year and be done with it.

    Maybe some Nobel prize winning economist can explain this.

    •  Do some research (2+ / 0-)
      Recommended by:
      glorificus, Involuntary Exile

      It creates demand for said fiat currency and remains a tool for regulating the amount of money currently in use in the system.

      It is a mistake to think you can solve any major problems just with potatoes. ~~ Douglas Adams

      by Remillard on Tue Jan 08, 2013 at 11:46:42 AM PST

      [ Parent ]

    •  True to a point... (1+ / 0-)
      Recommended by:
      glorificus

      Sure, you can print as much money as you want.

      The impact will be, eventually, serious inflation.

      Its why in 3rd world countries someone does just that and milk costs 1 million (units of currency).

      I would argue that we are a long long way from inflationary pressures and that we have about 4-5 trillion to go before that happens - but you are playing with fire.

      What does inflation do?
      1) In small doses, it decreases value of debt, increases things like home equity, etc

      2) The bad - it decreases value of savings and

      3) The bad - everything costs more (duh)

      Pick your poison.  

      In the end - a couple trillion dollar coins used as leverage to not be bullied by Congress won't hurt - but you can't do that forever.

      The object of persecution is persecution. The object of torture is torture. The object of power is power. --George Orwell

      by jgkojak on Tue Jan 08, 2013 at 11:50:26 AM PST

      [ Parent ]

      •  If the Fed is run by rational human beings (1+ / 0-)
        Recommended by:
        Remillard

        they can pretty much stop inflation in its tracks if they catch it soon enough before it gets out of hand.  Of course that will substantially slow down the economy.  By the way, I do not count the likes of Alan Greenspan as rational human beings.

        "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

        by SueDe on Tue Jan 08, 2013 at 12:13:23 PM PST

        [ Parent ]

        •  They would raise interest rates (0+ / 0-)

          And yeah- they're too low- but that hurts and pretty much halts the economy in its tracks

          So again, you can do a little of that in the mix, but too much and you end up with what we had in the 80s

          13% interest rates AND inflation

          The object of persecution is persecution. The object of torture is torture. The object of power is power. --George Orwell

          by jgkojak on Tue Jan 08, 2013 at 01:16:22 PM PST

          [ Parent ]

  •  The deal was a TAX CUT for the wealthy (1+ / 0-)
    Recommended by:
    George Hier

    At midnight on the morning of January 1st, the tax rates reverted to the 1990s rates. The law that passed later that day lowered those rates permanently.

    The "fiscal cliff" deal was a tax cut for the rich.

    Government and laws are the agreement we all make to secure everyone's freedom.

    by Simplify on Tue Jan 08, 2013 at 11:46:51 AM PST

  •  Put Ronald Reagan's face on it (3+ / 0-)
    Recommended by:
    glorificus, 714day, Bronx59

    Republicans are always wanting to put Reagan's name and face on stuff, so let's put his face on the trillion dollar coin.  First time I heard of debt into the trillions was during his administration, so a trillion dollar coin would be a fitting tribute to Reagan's legacy.

  •  Krugman has come up with an alternative (2+ / 0-)
    Recommended by:
    winsock, glorificus

    scenario:  Moral Obligation Coupons.  Here is his blog entry on the idea.

    Don’t like the platinum coin option? Here’s a functionally equivalent alternative: have the Treasury sell pieces of paper labeled “moral obligation coupons”, which declare the intention of the government to redeem these coupons at face value in one year.

    It should be clearly stated on the coupons that the government has no, repeat no, legal obligation to pay anything at all; you see, they’re not debt, and therefore don’t count against the debt limit. But that shouldn’t keep them from having substantial market value.
    ...
    So the government should have no problem raising a lot of money by selling MOC's.

    If for some reason someone might have a legal objection,
    And maybe the coupons wouldn’t have to be sold on the open market; why not just have the Fed buy them? Bear in mind that the Fed doesn’t always buy safe assets; it’s buying a lot of mortgage-backed securities (from Fannie and Freddie; see above), and during the worst of the financial crisis it bought lots of commercial paper. So why not slightly speculative pieces of paper sold by the Treasury?
    I like it.  The Fed could hold the coupons forever and it would never represent a federal debt.

    "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

    by SueDe on Tue Jan 08, 2013 at 11:49:13 AM PST

    •  Can't the Treasury (1+ / 0-)
      Recommended by:
      glorificus

      just hold a bake sale?  Maybe a "fix the debt" telethon.  I hear Jerry Lewis is available.

      I hadn't seen Krugman's idea.  Why isn't Obama nominating him to Treasury?

      Things work out best for those who make the best of the way things work out.

      by winsock on Tue Jan 08, 2013 at 11:58:12 AM PST

      [ Parent ]

      •  He doesn't want the job and confesses (1+ / 0-)
        Recommended by:
        winsock

        he wouldn't be any good at it.  He also addresses this suggestion in a blog entry.  He's a policy wonk, not a manager or administrator.  And he doesn't want to suffer the indignity of no one else in the cabinet paying any attention to him.

        "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

        by SueDe on Tue Jan 08, 2013 at 12:18:21 PM PST

        [ Parent ]

        •  Thanks (0+ / 0-)

          At least a job on the CEA where he may have some inside influence, if he toned things down a bit.  On the other hand, Krugman may be right that he would have as much or even more sway staying at the NYT.

          Things work out best for those who make the best of the way things work out.

          by winsock on Tue Jan 08, 2013 at 12:28:30 PM PST

          [ Parent ]

  •  AIG: biting the hand that fed it. (3+ / 0-)
    Recommended by:
    winsock, glorificus, Bronx59

    Why am I not shocked????????

    If you don't stand for something, you will fall for anything - unknown

    by incognita on Tue Jan 08, 2013 at 11:55:15 AM PST

  •  Thin Mint Coin (0+ / 0-)
    Coined money circulates therefore in the internal sphere of circulation of commodities, which is circumscribed by the boundaries of a given community and separated from the universal circulation of the world of commodities.....But a thing cannot be its own symbol. Painted grapes are no symbol of real grapes, but are imaginary grapes. Even less is it possible for a light-weight sovereign to be the symbol of a standard-weight sovereign, just as an emaciated horse cannot be the symbol of a fat horse.

    “If someone has a gun and is trying to kill you, it would be reasonable to shoot back with your own gun.” - Dalai Lama XIV (-9.50; -7.03)‽ Warning - some snark above‽

    by annieli on Tue Jan 08, 2013 at 11:57:51 AM PST

  •  Why be cheap? (0+ / 0-)

    Why use platinum?

    Rhenium and Gadolinium - the rare stable isotope of the latter - come to mind.

    I agree there are machining and casting issues, but otherwise Plutonium -- the nuclear option -- comes immediately to mind.  It's really expensive.  We have large stocks of it, not doing much.

    If you are in the right special interest, the obvious face for a Plutonium coin is a mushroom cloud, with the motto

    Waging Peace!

    Through Superior Firepower!

    We can have change for the better.

    by phillies on Tue Jan 08, 2013 at 11:58:56 AM PST

  •  I realize this call to violence may violate (1+ / 0-)
    Recommended by:
    Bronx59

    site norms, but:

    Re AIG: Bring on the torches and pitchforks!!!

    **Your beliefs don't make you a better person, your behavior does** h/t Clytemnestra/Victoria Jackson

    by glorificus on Tue Jan 08, 2013 at 12:05:17 PM PST

  •  Ezra Klein mentions the $530 billion (1+ / 0-)
    Recommended by:
    Bronx59

    defense budget, but that number doesn't include all the intelligence agencies, the military spending done through the CIA, the Homeland Security apparatus, or the VA - not to mention all the classified spending that goes on in the name of "defense."  By the time it's all added up, the amount is more like a trillion dollars.

    One of the problems with defense spending is that in order to keep spending the same amount of money, congress has seen fit to run many defense programs "off the books," or has cut the defense budget only to create new agencies and fund them at the same level as the cuts.

    "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

    by SueDe on Tue Jan 08, 2013 at 12:07:48 PM PST

  •  The best thing about this subject (1+ / 0-)
    Recommended by:
    Bronx59

    is seeing how it has made a rash of web generated coin ads suddenly appear everywhere on the internet. The algorithms are going nuts.

  •  Why not decimate spending in Red states/districts? (0+ / 0-)

    The Coin is fun to banter about, and banter can serve a purpose, but in the end Obama won't do it (for good reasons).

    Instead, why doesn't the Administration simply engage in traditional hardball politics, identify those areas of funding it can control or influence, and if the House GOP won't raise the debt limit, then engage in truly draconian spending cuts that affect Red states and Congressional Districts? All those red states who take in more federal funds than they pay out in taxes, bring them back down well below the 1:1 ratio, maybe to 0.8, essentially overnight? Start with the most-Red districts within them. Red districts in blue states, cut them as well. Make it hurt -- cut not only the spending, but eliminate that section of the Federal unit that has overseen the spending, if possible. "Your Representative won't vote to fund the spending he authorized? Sorry, you are ultimately responsible for electing him, he has spoken as your Representative." Start the process now, before any Congressional votes (or lack thereof), set up a few districts as examples for the others, and immediately cut them off at every single possible point of Federal funding, across the board, without exception.

    This is hardball politics -- but the GOP is playing politics with America's entire economic recovery. Cutting off Red districts *is* speaking for all Americans -- because the GOP is trying to hold the economy hostage to its ideological right-wing. That ain't right.

    When Bush Jr closed some military bases in 2005, Blue States lost 27,138 jobs, whereas Red States lost only half that number: 14,710 jobs. Reverse that trend, nay, make it even more pointed.

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