Daily Archives: January 11, 2013

The Quadrillion Dollar Thought Experiment

By Dan Kervick

Imagine this:  In a burst of manic, public-spirited zeal and budgetary enthusiasm, the US Congress passes, and the President signs, the following law.  (Lawyers, forgive my poor mastery of legalese and feel free to translate the sense of what follows into the appropriate terminology):

L.1  The Secretary of the Treasury shall by a date no later than September 30, 2013 consolidate all United States Treasury accounts into a single account, to be called the “General Account”, and to be held at the Federal Reserve Bank of New York.

L.2  The General Account shall be used to settle and record all payments to and from the US Treasury.

L.3  The Federal Reserve Bank of New York shall on midnight, October 1, 2013 credit the General Account with an initial balance of $1,000,000,000,000,000.00

That’s one quadrillion dollars, about 263 times the current US annual budget, and about 63 times the current US Gross Domestic Product.

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Ezra Klein Chooses Fear Mongering the Big Coin, I Choose Ending Austerity!

By Joe Firestone
(H/t to Lambert Strether for the title!)

Here’s a commentary on Ezra Klein’s recent diatribe against Platinum Coin Seigniorage (PCS).

But there’s nothing benign about the platinum coin. It is a breakdown in the American system of governance, a symbol that we have become a banana republic. And perhaps we have. But the platinum coin is not the first cousin of cleanly raising the debt ceiling. It is the first cousin of defaulting on our debts. As with true default, it proves to the financial markets that we can no longer be trusted to manage our economic affairs predictably and rationally. It’s evidence that American politics has transitioned from dysfunctional to broken and that all manner of once-ludicrous outcomes have muscled their way into the realm of possibility. As with default, it will mean our borrowing costs rise and financial markets gradually lose trust in our system, though perhaps not with the disruptive panic that default would bring.

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Krugman and Obama’s Dangerous Austerity Myths

By William K. Black

Austerity in response to the Great Recession has proven to be an economic weapon of mass destruction.  On January 10, 2013, Paul Krugman (Nobel Laureate in Economics) and President Obama launched the same dangerous austerity myth in remarkably similar language.

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Stephanie Kelton appeared on UP with Chris Hayes

[Revised 1/12/13 @ 13:17]

Stephanie Kelton appeared on UP with Chris Hayes on MSNBC  Saturday January 12, 2013 at 8:00 AM Eastern.

You can view selected segments below.

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NEP’s William Black appears on Democracy Now

NEP’s William K. Black appeared along on Democracy Now. The appearance has been split into two parts and posted below.

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#MintTheCoin T-shirts and Hoodies Now Available!

NEP has T-shirts and Hoodies available for ordering online.

You can place your order here!



And for the Naysayers…

The Delicious Irony of Morris Greenberg’s AIG Suit Against the US Treasury

By Michael Hudson

When the financial bubble burst in September 2008, U.S. and European governments responded by shifting bank losses onto their own balance sheets. The pretense is that real growth cannot resume until the banks and speculators are “made whole.” To cover the cost of bailing out the banks, governments now are trying to run budget surpluses. This adds fiscal deflation to the debt deflation left in the bubble’s wake, shrinking the economy at large. Governments are raise taxes (or simply print new debt to swap for the financial sector’s bad loans and gambles) to reimburse financial institutions whose lending and outright gambling (not to mention the excursion into financial fraud) caused the crisis. Continue reading