What Now?

By Joe Firestone

Today, John Boehner bowed to the inevitable logic of the impending political season and placed a “clean” debt ceiling increase bill on the floor of the House. At this writing, the bill passed with 28 Republican and 193 Democratic votes. Now it moves on to the Senate, where it is expected to pass in time to allow the Treasury to keep issuing debt instruments.

So, now we have had agreement on a budget partially rolling back the sequester, and the Republican leadership appears to have decided not to have another debt ceiling crisis. I wrote a post called “What Happens Now?” just after the Government shutdown ended last October. There I analyzed the political situation and made a number of predictions about the short-term future. Here’s how I answered the question: “Growth and Jobs or Shutdowns and Debt Ceiling Crises?”

I think the answer is neither. We may have shutdown and debt ceiling threats before the 2014 elections; but we will not have either of these types of crises, because the cost in public opinion, if it keeps trending the way it has been, will be too heavy for many Republican candidates, except for those in the reddest gerrymandered districts, to bear in 2014. I believe they know this, and that many of them are increasingly willing to chance getting primaried by tea party candidates in order to avoid probable defeat from Democrats, if they toe the tea party line and then try to run.

So, I think the shutdowns and debt ceiling scares are over until after the elections. That means there will have to be an agreement on a CR for the first part of FY 2015 by next October 1. That will happen because there’s no way the Republicans will chance another hostage-taking taking a month before the next elections.

That’s the good news. The bad news is that there will be very little growth and very few new jobs. If the sequester remains in place for the rest of FY 2014, unemployment is likely to increase, not decrease, because Government will continue to be a fiscal drag on the economy, and the private sector is likely to avoid expansion without increased demand. That demand could be manufactured by a credit bubble; but it doesn’t look like that is in the offing for 2014. So, the shortfall in demand produced by the Government will not be made up from private sector spending.

On the other hand, if the sequester is lifted, then this will make some difference. We will probably see declining unemployment if that happens, but since the deficit was much too small to sustain a vigorous expansion, even before the sequester, the decline in unemployment, increased job creation, and economic growth, will all happen only slowly, and by election time we will still see an unhappy public, but maybe one that is a little more hopeful about the future than we are now seeing.

I don’t know yet whether the falloff in economic activity due to Government austerity or near austerity, will be enough to produce another recession in the middle of this long stagnation period, Richard Eskow has aptly named “the long depression.” But there is some chance that this will happen before the fall elections. If it does, then we will see a messaging war on who bears the blame for the downturn, and the outcome of the elections will hang on the outcome of that war.

So, we are now through or nearly through the most likely crisis points until after the election and most likely until January 2015. Reality has played out as I thought it would in October, with the exception that the sequester was neither repealed nor continued as before, but rather partly repealed, and partly continued.

This leaves us with a situation where there is still substantial fiscal drag from a lack of government spending and what are likely to be much too small deficits to accommodate savings and import desires of people. This has been leading to curtailed consumption, visible in lower than expected sales in retail, housing, and other sectors, which, in turn, is likely to lead to either higher unemployment or more people dropping out of the labor force or both, as we move through the Spring, Summer, and Fall, and as we approach the elections. (Please see Warren Mosler’s recent posts on how the economy is trending for the past quarter, for example, this one.)

This will be more bad news for many Americans, but good news for the Republican Party, since lacking something dramatic like another shutdown they get blamed for, the blame will probably shift to the President and the Democrats for failing to do anything about the down economy and jobs. The Democrats will counter, of course, by trying to pin the economy on the Republicans, but this will be like a mud fight in which the Republicans will have more mud to sling supplied by big money than the Democrats have.

And the end result will be that the public will be very angry at both parties, and their plague on both your houses attitude will probably manifest in the Republicans retaining control of the House by a narrow margin, and perhaps gaining control of the Senate, because the Democrats have the opportunity to lose so many more seats than the Republicans this year. So, what can change this picture?

Well, the Democrats could get lucky if the FIRE sector blows another credit bubble to boost demand and accelerate GDP growth again. Also, the Republicans could get so ham-handed with their attacks on women, minorities, hispanics, undocumented immigrants, voting rights, and all their other tea party targets that these overshadow the economy as an issue.

However, these are unlikely scenarios for saving the Democrats in 2014 and for ensuring that the President will avoid the likely fate of being impeached and perhaps even convicted. There is, however, a way in which the President can both save himself and work with the Democrats to get them a substantial victory in the coming elections.

To see what that way is, imagine the campaign the Republicans will run nationally. They’ll try the jobs appeal again, saying that President Obama’s high taxes, and deficit spending have exacerbated our national debt problem, and also created uncertainty in the business community, which is the reason why the economy can’t fully recover and supply the jobs people need. They’ll also say that the Dodd-Frank Act, government regulations, and Obamacare are causing economic stagnation and killing jobs. They’ll say that the cure for this is to unleash the “job creators” by providing tax incentives, freedom from regulation, and to reduce the uncertainty that comes from deficit spending and increasing public debts by balancing the budget and beginning to pay down the debt.

The Democrats will reply that after the initial stimulus bill, made necessary by the mess left Obama by Bush, the President has steadily reduced deficits to the point where are they now projected by CBO to fall to the 3% of GDP level in this fiscal year, and even lower than that in the next three fiscal years.

They’ll say that the down economy isn’t due to “uncertainty,” but to too little spending by Government creating demand and jobs for the unemployed, and to Republican threats of Government shutdowns, and resulting cuts in Government spending. They’ll add that this, in turn, is due to Republican obstructionism, and to their determination to make the President fail in his job, and to prove that his health care law is a failure. They’ll then say that the Affordable Care Act isn’t a job killer, but just gives people who want to retire a chance to do so without having to give up health insurance.

These Democratic replies are certainly reasonable and will probably prevent the kind of Republican wave election we saw in 2010. However, that doesn’t mean it will prevent the Republicans from taking over both Houses, and the carnage to safety nets, social spending, and the Executve branch under threat of impeachment which is likely to follow such a victory.

Only a Democratic victory can prevent that, and what stands in the way of such a victory is “teh debt.” By the end of this fiscal year CBO projects that the debt subject to the limit will have reached $17.7 Trillon. In the public mind that is an overwhelming number that people can’t grasp and that freezes rational thought. They have no notion of how it can be paid back, and they do think that since it is a debt, it has to be paid back sooner or later.

Democrats can try as they might to explain that the national debt is of little concern, or at least much less important than growing the economy, but they won’t be able to persuade a majority that this is true. So, the result will be that even if Democratic arguments that the Republicans are no good for jobs and the economy are successful, many people will still be bothered by “the debt” problem and will see the Democrats as unwilling to prescribe “the painful medicine” needed to cure this problem. The Republican advantage on the debt will prevent the Democrats from blocking the Republicans in their attempt to take over both Houses, and so the best hope for a Democratic victory is for the Democrats to begin to pay down large quantities of that debt themselves before the 2014 election. And, in the process, to take the debt issue away from the Republicans.

How the Democrats can take this issue away from the Republicans has been known for some time now. The solution is to use High Value Platinum Coin Seigniorage (HVPCS) to fill the public purse with enough reserves to repay the debt subject to the limit as it falls due, and also to implement all deficit spending appropriated by Congress for some time to come without issuing further Treasury Securities.

I’ve proposed that the President order the Treasury Secretary to have the US Mint create and deposit a $60 Trillion coin in its Public Enterprise Fund (PEF) account at the Fed. I’ve described the details of doing this here, along with extensive discussion of various issues related to my proposal, and to using Platinum Coin Seigniorage (PCS) more generally. But, in this post my point is that if the President uses HVPCS and mints that $60 T coin, then he can then pay down close to 40% of the debt subject to the limit by election time, keep score on his efforts, and report to the public on the gradual extinction of “teh debt” every two weeks from now to then.

Doing that is a winner because it’s the one thing that will take that issue away from the Republicans and also make clear to the voters that if they elect Democrats who campaign on jobs and full economic recovery in 2014, the money will be there to pay for the programs involved, without the deficit and the debt coming into play as a rationale for not following through on their promises. Doing that will also make plain to people that the trade-off between incurring less debt and creating more jobs which they are faced with when evaluating Republican campaign appeals isn’t a trade-off they have to take into account.

They can have both job creation by the Government and no national debt. They can also have true universal health care and no national debt. They can also have first class free education, and new infrastructure, and new climate-change and environment friendly new energy foundations, and much else with no debt subject to the limit. When they know these things and when they believe that Democrats, if elected, will provide them with these things, all without needing to raise taxes, then, and perhaps only then, will the Democrats be able to snatch victory from impending defeat.

Finally, yes, yes, I know. . . Both parties are now bought by corporate America, and the difference between the two seems to be that Republican appetites to punish the 99% for their existence and create a plutocracy in the process, are, apparently, much more determined and voracious than Democratic appetites to do this. So, why would I believe that it is any better for the rest of us that the Democrats win in 2014 rather than the Republicans? Isn’t it better to have a short-term disaster that will be so terrible that it finally motvates people to make real changes to our political order?

My answer is that I don’t believe that just any Democratic victory would necessarily be any better for either the short or the long run. However, I also think that if the President has that $60 T coin minted this month, and begins to pay down “teh debt” and the Democrats run on an aggressive job creation program, then there will be tremendous public pressure on them to deliver on their promise, and that pressure might well be irresistible.

Think about it. The three traditional excuses for inaction: the debt, the need for tax increases to fund the new programs, and their not having control of Congress will be gone. So, the Democrats will either have to deliver on their promises about jobs or their mask as the party of the people will be well and truly ripped off for good and all.

Either way, the rest of us are better off. If they deliver, we’ll have full employment, and if they don’t, then everyone will know that the 99% need a real people’s party. And the Greens will be waiting in the wings, with the best cast of characters this side of the New Deal.

61 responses to “What Now?

  1. Joe, I agree that this could save the Obama presidency, but I predict that Obama will not do it because: 1 the heat is now off until 2015, and 2 it’s just too radical for Obama who is certainly no FDR or even LBJ. I think Obama will just try to keep on mud(dling) slinging his way through until its time to open his golden parachute. I wish it weren’t so, but that’s my prediction.

    • I agree, Sun. But, as always, just because he’s not likely to do the right thing doesn’t mean we shouldn’t call for him to do it and keep on pressuring for him to do it. What else do we have to do?

      • You are right that we need to keep the heat on as much as possible. Just yesterday I filled out a survey from Democracy for America asking what executive order President Obama should issue next with the answer: Issue HVPCs. If those of us who understand the stakes and possibilities drop the ball, who will pick it up except the austerians.

  2. financial matters

    This seems like good timing for such a bold move by our legislative and executive branches. With Stiglitz’ recent speech emphasizing that 95 % of growth over the last 5 years (while the Fed has been running the show by the way) has gone to the top 1% and the fact that the most important factor for the success of a young American today is the success of his parents there should be some motivation for bold action.

    http://m.youtube.com/watch?t=31m03s&v=LaRW5jix_ic&desktop_uri=%2Fwatch%3Fv%3DLaRW5jix_ic%26t%3D31m03s

    • The timing for it is right now, since there’s enough time left for the violent reaction to it by the austerians and Republicans. They’d just hate to see their main excuses for continuing to hold down Americans to go away.

  3. I would say that we suffer from three economic imbalances; excess savings, represented by the debt, which are socially mal-invested by self-loving white collar criminals seeking a sure thing with giant pools of money, inequality with respect to the excess savings distribution (trickle up schemes of the 1%), and increasing white collar crime due to lack of enforcement and increasing financial innovation and complexity.

    There was a local murderer-rapist in the DC area who was apprehended a while ago, after a cluster of violent suburban crimes. He started stealing from cars as a teen. He became a cat burglar and voyeur in the neighborhood as a young adult, and finally graduated to robbery, rape and murder for thrills as a deliveryman. He thought the progression was natural because, “Nobody stopped me”. White collar crime will not self-regulate as the rewards, methods, competition, and self-love expand with the money supply.

  4. The people only respond after a disaster. The populist movement grew from the 1893 depression. The progressive movement happened after the corruption between the republicans and business community grew so bad nothing could hide it. Then the great depression brought us Franklin Roosevelt.
    McKinley was the result of the 1893 depression and he mislead the people into thinking he’d do something for them when all he wanted was to start a war to divert people’s attention from domestic issues. Wilson was brought in as a progressive but wasn’t one. All he wanted was to start a war to divert people’s attention from domestic issues. Franklin Roosevelt was the only one brought in who really fought for the people. After McKinley and Wilson the people became apathetic again.

    • What’s wrong with us? We’ve had both the depression and the corruption, and where’s our political movement to take back America? Occupy? The Greens? Not quite there yet, are they?

      • No they aren’t there yet. For better or worse Obama’s small stimulus kept us from sliding off the edge. I’m reading that Scott Walker and Kasich are ahead in their races so Americans haven’t had enough of the right wing. Plus the money they have for distorting issues is incredible. I’m a big fan of New Economic perspectives but how many people read this? The Koch brothers reach a lot more people. Most people get their info from advertisements and their side has a lot more than we do.

        • The Koch brothers do reach a lot more people with their network of supported propaganda organizations than I do. On the other hand, my posts do appear here, and at Correntewire, at Daily Kos, and at FireDogLake. In addition, they are occasionally carried by Naked Capitalism. Global Economic Intersection, and Truthout. Then there’s also my book at Amazon, which a willing and well-coordinated group may be able to spread far and wide.

          • Joe, If this is true, why can’t it be done again?
            On June 4, 1963, Kennedy signed Executive Order 11110, which authorized the US Treasury to issue a new form of silver certificate.
            Kennedy issued $4,292,893,825 of cash money; free of debt and free of interest. It was a sufficient amount to allow the nation to operate without the private Federal Reserve. Almost immediately after Kennedy’s death, the US Notes were pulled out of circulation and destroyed except for samples in the hands of collectors.
            I’ve downloaded your book and it’s convenient to have all that info in one place.

            • Thanks, Bill. I hope you were able to get the 2014 revised edition. On the Silver Certificates Kennedy used, I’m not sure current laws allow that to happen again. I know, however that it is a very strong interpretation of current law that it authorizes the Secretary to order the Mint to create platinum coins with face values chosen by the Secretary and that these coins can be deposited at the Fed. This has already happened with relatively small value coins and their acceptance by the Fed has provided a precedent. There is no legal basis for the Fed to refuse to accept a $60 T coin when it has already accepted smaller denomination coins of the same type.

      • That’s a very good question. The bursting of the housing bubble, the subsequent financial crisis, and the onset of the Great Recession–these events presented a once-in-a-generation, perhaps once-in-a-century opportunity to fundamentally change our economic arrangements. The left was utterly unprepared to capitalize on that opportunity; it failed even to mount much of an effort to do so.

        It’s worth asking why, not least because, whatever the reasons, they are they same ones, surely, that dictate that there will be no HVPCS now, much less (as you say) any recourse to the more direct solution, of persuading a majority outright, that the so-called national debt is not the constraint on our capacity for collective action that it is thought to be.

        • “The left” disappeared as a force when Democrats began to push fiscal responsibility under Jimmy Carter and in opposition to Ronald Reagan. Being “left” on the socioeconomic dimension requires that one run government deficits when you also have trade deficits. But no well-known “left” politicians today have the uts to embrace that position. Until they do, there will be no socioeconomic left of any consequence.

      • Too much moral and intellectual incoherence about the long-term direction forward. There is no unified social vision referred to by the term “progressive”.

        • True. Today the term means anyone who wants to appeal to voters who label themselves “progressives.” The whole thing is “self-referential.”

  5. Why should I care about the Democrats saving themselves? The sequester was their idea to begin with, after all, and if Obama had his way Social Security and Medicare would have been cut years ago. And if the president who launches wars without Congressional approval and has his own citizens assassinated without due process gets impeached, I say “good riddance.”

    • Well, I’m sure many people in places like Wisconsin, Michigan, Florida, and Ohio asked themselves that question in the run-up to the elections of 2010 as well. The women, minorities, government employees and union workers among them, now know that there’s a difference between slowly and rapidly boiling frogs. I prefer slow boiling myself. It gives one time to get out of the pot, or in this case take back the party or build a third one that’s not doing any boiling!

  6. what stands in the way of such a victory is “teh debt.”

    What on God’s green earth is a “teh”?

  7. I doubt the Democrats will choose to fight the next election on the economy. Like the blog correctly points out, lack of demand due to lack of public spending is what is holding back growth. If anything, the Democrats look like they’ve decided to fight the next election through Kulturkampf. Expect to hear incessant blather about gays.

    • Actually, think they’re going to attack the Republicans on jobs and the minimum wage, as well as on trying to shred the safety net. The Rs will reply that the Administration originated the sequester and has also been pushing the chained CPI, but by election time Obama may well be a lame duck that the Dems may well be able to run away from. Hell if I were a Democratic Congressperson I’d be doing it already while accusing him of being Reagan lite as loudly as I could. Of course, that’s just me. On the other hand, if he minted that big, big coin, I’d run n a different way entirely.

  8. This bunch of commenters needs encouragement!….;-)
    I wouldn’t bet on Obama doing anything Bush 43 wouldn’t do…like minting platinum coins, but I’m perfectly willing to be proven wrong.

    Meanwhile, the Greens candidate for Comptroller in California understands MMT and is pushing for a State Bank (Jerry Brown killed funding for a study of such a bank, which shows you where the “lefties” are…)

    Finally, I recommend paying attention to Gar Alperowitz’s movement to make social movements back politics rather than expecting politicians to actually lead (they follow more often). Check out some of his work here for example.

    • Thanks. You mean Ellen Brown running for State Treasurer in California? I like her work very much, and I also like Gar Alperovitz’s writing and follow it from time to time.

  9. You believe that the Democrats will not be able to counter the arguments of the Republicans and convince the public that the national debt is of little concern, but yet you think they will be able to avoid Republican counter arguments and convince the public that platinum coins are the solution?

    I don’t see how the second argument is any more-winnable than the first.

    • The latter doesn’t have to be argued, it can just be implemented and then the results judged by everyone. The problem is getting someone to make the move.

    • Well, it’s the difference between the concrete and the abstract. The abstract: argue the theory of platinum coins with people and try to get them to support you before you do anything. The concrete: Mint a $60 T coin, get the $60 T in reserves from the Fed following depositing in the Mint’s account, and then after transfer of the seigniorage to the Treasury General Account (TGA) use those proceeds to immediately pay off the intra-governmental debt and the Federal Reserve Debt, if the Fed will sell back the bonds it’s holding, and then pay off the rest of the debt subject to the limit as it falls due. Something $6.7 T is held by the Fed and other Government agencies including SS and Medicare. That’s close to 40% that can be paid down the first week. Another $3 T or so in short-term debt will fall due between now and election time. o, the President would be able to show that 55% of the debt was extinguished by then and he can also keep score by the week and ballyhoo the substantial and rapid elimination of the debt week-by-week. When the public sees this happening as a result of a single action of the President, authorized by law, what can they conclude, other that the debt was always a faux problem which politicians n both parties and wealthy interests had been using for decades to block legislation that would have helped them and helped to produce a more democratic America.

  10. To further the discussion, what happens to the economy and inequality when we have a $60T QE III? What type of society are we building, an Austrian Acquisitive society where money is property and property has Rights? Or should we consider a Functional society where transactions have social utility and money serves a utilitarian purpose and if it is not transacted in a utilitarian manner, it is taxed. I am trying to get a handle on the direction debt-free money, and lots of it, is taking us to a better or worse place.

    • Ransome, there’s no $60 T QE III involved. QE is a swap of assets for reserves locked up at the Fed during a short time period. The reserves Treasury would get from the $60 T coin would be used to pay back the debt to the private sector over a much longer time frame than is the case with QE, and it is a swap of assets for reserves that would occur anyway whether the reserves from the $60 T coin were used or whether Treasury received reserve credits in its TT & L accounts after the sale of securities.

      To believe that such a swap is more inflationary than one which occurs in the presence of further sales of debt instruments is to claim that reserves are more inflationary than debt instruments left in the hands of the private sector. But there is little empirical evidence suggesting this, and what exists tends to refute this proposition as Scott Fullwiler has shown in his work. He finds that NFAs in the form of securities are more inflationary than NFAs in the form of reserves because he former can be leveraged multiple times.

      What about the $6.7 T in securities held by Government agencies and the Fed that would be paid off almost immediately in my scenario? Well those reserves would, for the most part stay locked up in Treasury subsidiary accounts earmarked for various agencies — i.e. there might be an actual Trust fund sub-account that within the TGA at the New York Fed. Similarly, there would would be Medicare sub-accounts, and sub-accounts for other agencies replacing the dollar credits called “bond credits” that are there now. This money, close to $5 T would only be spent as SS, Medicare and other payments of these funds would fall due. So, there would only be a slow input in reserves into the private economy which would have occurred anyway under the old arrangements. The remainder of the $6.7 T would go to the Fed. What would the Fed do with it? If it wanted to do more QE, then it would draw down on it. If it didn’t, then t would just hold the reserves.

      Under the old arrangements what would it do? If it wanted to have more QE it would just create the reserves, and if it did not it would not create them. So, what’s the functional difference between the situation under the $60 T coin and the situation now with respect to the Fed’s input of money into the economy? Exactly nothing!

      Moving now to the portion of the $60 T that would not be used to pay debt, about $43 T. Where would that go? It would stay in the TGA, or as I like to call it: the public purse, until it was needed to cover deficit spending, when the spending would add NFAs to the private sector in the form of reserves. Would it all be spent at once and cause inflation? No!

      It would be spent over time as needed to compensate for savings and import desires of the private sector so that full employment could be maintained. That would not be inflationary if the MMT Job Guarantee was used unless the deficit exceeded the amount needed to support full employment. And whether this happens or not isn’t a function of the $43 T sitting in the public purse, but rather of the actions of Congress in providing the Executive with deficit spending appropriations.

      Provided the Congress acts responsibly, the result would be that we would have probably have deficit spending beginning at about $1.7 T in the first year. If this continued year after year without issuing any debt instruments then $17 T would be gone after 10 years and $34 T over 20 years. Allowing for inflation, and for having smaller deficits in years when tax revenues swells, I estimate that the $$60 T coin allow paying off the debt, and also deficit spending for 15 – 25 years. I think that’s enough time to find out how this plays out practically. If it works then another very high value coin can be minted, or alternatively we can quit fooling around we can just place the Fed under supervision of the Secretary unifying the authority to create coins and reserves under the Secretary, which is what we should have been doing all along.

      Finally, please note, using seigniorage-produced reserves to deficit spend isn’t merely QE. To call it that is to mistake asset swaps of debt instruments and other financial assets for locked up reserves, for NFAs in the form of payments of unlocked reserves placed directly into private accounts in return for goods and services provided to the Government, or simply as social safety net payments. Adding those NFAs to the private economic is a Government addition to the economy; not just a mere swap.

  11. Joe, thanks for continuing to keep the HVPCS in the conversations. To me, it appears to be a full solution. Easily viable.

    It still boggles my mind that we have a solution available to us that is so simple, we are afraid to use it. We are afraid of not having govt debt. If feels like we’ve been a hostage to the debt masters for so long we’re literally terrified if it were to go away.

    I’d guess most have seen this one before: “The process by which banks create money is so simple the mind is REPELLED. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith. The intentional avoidance of even discussing the coin seems to justify the statement.

    I think i heard somewhere that Obama threatened to mint the coin during the SOTU, don’t know if anyone can confirm for me the context? The coin threat seems to be a great for shutting down the debt ceiling argument at least…..ha ha.

    • Hey, Jack, I don’t think Obama threatened it. The Administration leaked the news that its lawyers had been looking at the 14th amendment and PCS ways of getting around the debt ceiling. The President then mentioned this too, but he said there were legal questions and also that use of the coin would upset the bond markets, a non-relevant reply, but one that did not deny the legality of the coin solution. And that’s about the last we’ve heard about PCS from this Administration.

      On people afraid of getting rid of the public debt, I think the FIRE sector has a problem with that, but I think the American people are just ignorant of the fact that we could do this if we so choose. If the MSM would inform them about this, I think they’d be livid at all the people telling them that we’re running at of money.

  12. Obama was vilified for even mentioning the use of executive orders. It would be a safe bet to assume that he does not understand the MMT concept, nor do his advisers, and, if he did, would not have the courage to mint the platinum coin. He also doesn’t have a crisis to justify such an extreme measure. If you think the reaction to Obamacare is obsessive – I can see an army of armed tea-baggers invading the Mall. Wray emphatically states, ‘the US government can NEVER run out of money’ but it seems that in reality it can certainly choose to do so. The fly in the MMT ointment is politics. It is almost 120 years since the “Cross of gold” speech – seems pretty relevant today.

  13. Thanks, Paul.

    . . . If you think the reaction to Obamacare is obsessive – I can see an army of armed tea-baggers invading the Mall. . . .

    So what? Does that mean the public won’t approve once they begin to see the President begin paying off the debt the first week out? Even the tea party will subside once they see that debt getting paid off.

  14. One pastime of mine is to listen to the “debates”, the call-in shows where middle-America gets to regurgitate what FOX, Simpson, etc is feeding them. Some of the more civil discussions with right-wing America, such as one can see on Sam Seder’s “The Majority Report”, reveal the deeply rooted illogic and white-knuckled clinging to self-defeating philosophies despite clear evidence to the contrary. So the “once they see” hope is just too risky for a politician to count on – especially because “they” (the tea party and much of the public) are blind. I don’t mean to sound hopeless and cynical, but I think the tactic of cogent arguments just doesn’t work. Maybe if there arose a modern-day Thomas Paine who could repeat what “Common Sense” did for the revolution….but, as I believe Wray himself said, it won’t be until we are again in a state of crisis and maybe even civil violence will things change. I really do hope I am wrong.

    • I’m not calling for cogent arguments or expecting people to support them. I’m calling for action which will demonstrate that there’s no shortage of public money. That’s what will change the polluted minds of the Fox watchers.

  15. Yes, I do understand your argument and, from what I can absorb, the platinum coin seems to be the embodiment of MMT. When the mystique of money is taken out of the equation, one is only left with the politics of who gets to decide the priorities. But if Obama won’t, will Hillary? How does one get from point A to B?

    • Keep pushing? Maybe Hillary will do us a favor and give up the idea of running. I’d much rather see Elizabeth Warren run, I think MMT would have an easier time with her in the WH.

      • “I’d much rather see Elizabeth Warren run, I think MMT would have an easier time with her in the WH.”

        No kidding!

      • Joe,
        I think we need to get MMT speakers out to the general market, beyond Democracy Now, MSNBC, etc. Most of the public doesn’t know you exist. Perhaps we could target some shows and pepper them with emails to have MMT guest speakers.
        I know Stephanie has been on the Chris Hayes show a couple of times but that’s the most exposure I’ve seen.

        • One thing that we as individuals can do is call in to various syndicated talk shows such as NPR’s Diane Rehn and Kojo Nnamdi as well as C-span (I’ve done all three). Even though NPR is seen as left-leaning – the ignorance is pervasive (such deference to Simpson-Bowles). It would only take a persistent regimen of weekly calls to challenge and change the assumptions. What is needed are a set of solid, concise and sharp MMT talking points (which do not exist as far as I can see) I can’t think of a more valuable contribution from the MMT experts.

          • I agree about the talking points. Something we can learn from the right wing is how to get attention from the media. They are very good at it. They flood parts of the media with emails and phone calls and their speakers have come to dominate the shows. They have very precise talking points developed by experts like Luntz and once those points are developed, you hear every republican saying them over and over verbatim. We want to make our talking points the truth. We are different there because they don’t care if it’s true or not.

            Scattered requests such as we are doing won’t have much impact. I was trying to get Stephanie Kelton on the Rachel Maddow show and after 5 emails with no response, gave up.

            • Joe, all good points but much too intellectual to be talking points. Let’s see if Paul and I can work them over a bit to create talking points. Here’s my first go Paul:

              Austerity destroys the private sector by destroying its assets.
              Deficit reduction doesn’t work because at any given time there is a fixed amount of money in the system. It is either in the private or the government sector. If the government is running a surplus, it is in the government sector and not helping the private sector.
              In other words, deficit reduction kills the economy.
              Government spending for the people is real fiscal responsibility.
              End the Grand Bargain which is a sure way to destroy jobs. Better to do nothing.
              Social Security and Medicare can’t run out of money. It’s a phony issue.
              The only crisis in the country is our politicians who want to cut our services by creating phony crises.
              The government can only run out of money if our politicians are stupid enough to make it happen. We print our own money.
              Comparing us to Greece and Ireland is just economic ignorance.

            • From Krugman this morning:
              Remember the “death tax”? The estate tax is quite literally a millionaire’s tax — a tax that affects only a tiny minority of the population, and is mostly paid by a handful of very wealthy heirs. Nonetheless, right-wingers have successfully convinced many voters that the tax is a cruel burden on ordinary Americans — that all across the nation small businesses and family farms are being broken up to pay crushing estate tax liabilities.

              Problem with talking points is that it’s easier to create them against something than for something. To be for something means explaining it and it loses the emotional appeal.

        • Yes, we do. But I’m not sure how we do that. I think MSNBC is moving righter wing with their new lineup, and CNN and Fox are already there. As for the old TV networks, they are hopeless corporatists.

          • I’ve been writing to Charlie Rose requesting he have Joe on to talk about the debt ceiling and HVPCS. Also try BookTV on CSPAN.

          • I agree about MSNBC. I don’t watch it nearly as much anymore. Let’s try Charlie Rose. He prides himself on bringing out new thoughts. I don’t think he does it nearly as much as he thinks he does but we may be able to appeal to that side of him. If all of us suddenly hit his emails with requests to bring Joe Firestone, Stephanie Kelton, Randall Wray onto his show, perhaps he will listen. I know it’s a long shot but one worth playing. He claims to engage America’s best thinkers, well here’s a challenge for him.
            His email is:
            [email protected]
            Let’s organize a campaign.
            Bill

            • I’m in, Bill. I will email Charlie Rose – any others?

              • Thanks Paul, looks like there’s 2 of us.

              • I’d like to see the discussion be on MMT, at least at first, so let’s shoot for Warren, Stephanie or Randy.

              • Paul,
                You and I seem to be the only 2 interested in following through with these ideas. I’m gong to send a few emails to Charlie Rose the next couple of days.
                Bill

                • Bill – This has been my frustration with the MMT site for months. There is such a deep fascination with the revelations on how money actually works (or doesn’t work) that the more mundane tasks of getting the wordout and accessible are just not “interesting”. There is a need for both types – wonks and advocate/activists. MMT is still very much in the wonk stage. I did email Charlie Rose – no reply. I also emailed the producer on Diane Rehm – no reply. I’ve called and gotten on the Kojo Nnambe show – just one lone voice – “next caller”. I don’t think people realize that it does not take much, maybe a few dozen contacts to a given venue, to appear to be a “movement”. Maybe NewEconomicPerspectives.org needs to have an advocacy site with campaigns, petition drives, mailings, etc.

                • I’ve sent several in the past and will add some new ones.

              • How about BookTV on C-SPAN?

            • Thanks, but who has on probably should depend on the focus of his interview. If he’s going to focus on MMT generally the economics of fiscal policy then Warren, Stephanie, Randy, Pavlina, Scott, Mat, Jan Kregel and others are better than I. But, if he focuses more on the political angle and HVPCS specfics, then these areas are my strengths and my credentials, including my Ph.D. in political science fit them.