Tag Archives: platinum coin seigniorage

Some Platinum Coin Objections from the Mainstream: Part V

This is Part V, and the conclusion, of the series providing my reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model. Continue reading

Some Platinum Coin Objections from the Mainstream: Part IV

This is Part IV of my reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model.

In Part II I continued with a discussion of political legitimacy and usurpation issues and then covered some legal objections to using the $100 T platinum coin option related to the “intent” of the coin law. In Part III I discussed a legal objection based on Wallach’s view of the intent of the coin law, which quickly morphed into a political objection about the desirability of mutual respect and comity among the three branches of government, as well as the threat to political legitimacy arising from the judgment that the platinum coin option is really “weird.”

In this, Part IV, I’ll continue discussing the “weirdness” objection, and also cover Wallach’s views on Inflation and hyper-inflation, and Modern Money Theory. Continue reading

Some Platinum Coin Objections from the Mainstream: Part III

This is Part III of my lengthy reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model. In Part II I continued with a discussion of political legitimacy and usurpation issues and then covered some legal objections to using the $100 T platinum coin option related to the “intent” of the coin law.

In this installment I’ll continue with more discussion of political objections. Continue reading

Some Platinum Coin Objections from the Mainstream: Part II

I began a lengthy critical reply to Philip Wallach’s reply to my earlier analysis of his paper in Part I of this series. There I covered some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model. In this Part II, I’ll cover some conjectures about political legitimacy Wallach offers about the consequences of minting a $100 T, some legal legitimacy issues, and some additional political legitimacy issues. Continue reading

Some Platinum Coin Objections from the Mainstream: Part I

As I was working my way through the series of posts beginning with this one, news was announced that Republican and Democratic Party leaders in Congress, along with the President had come to agreement on the terms of ending the debt ceiling standoff in the context of a new budget deal. Their agreement provides for suspension of the debt ceiling until March of 2017; so the immediate need to turn to unusual solutions to a pending debt ceiling crisis is now gone, and, along with it, crisis-driven discussions about the platinum coin option.

Nevertheless, even though the immediate reason motivating renewed discussions of the platinum coin option is now gone, I still have some unfinished business dealing with the issues surrounding it. Late last week I replied to a paper from Philip Wallach of The Brookings Institution with a post at Naked Capitalism, as well as a number of other sites in the blogosphere. Now, Wallach has replied to my post, which mostly presents new arguments not in his original paper.

These are important to answer for the record, since platinum coin options and debt ceiling issues are likely to return again in the future, especially if we still have divided government in 2017, a very good possibility, I think. Answering them is also important, however, because they are the kinds of arguments that will be offered by the mainstream neoliberals against using the $100 T platinum coin, as well as the trillion dollar version. This series, of which this post is Part I, will present a detailed reply to Wallach’s new paper. Continue reading

The Platinum Coin Returns

Upon my oath, I didn’t intend to bring back the coin proposal until much later in the renewed process of Republican hostage-taking over the debt ceiling. After all, there’s not much chance that the President would ever use the platinum coin option, because his budget policy direction of getting ever closer to a budget surplus, is best served by a “forced” compromise with the Republicans, that results in another few hundred billion in spending cuts for 2016, while allowing him to place the blame on them for that outcome. Using the platinum coin option would not have that result, because it would deliver a clear victory to him.

Of course, he doesn’t want a default due to Republican brinksmanship either, so if the Republicans do drag everyone too close to the cliff, then he may decide to take some extraordinary measures and the coin is one that is available, so it’s conceivable that he might choose this undoubtedly, from his point of view, distasteful option. It is for this reason, I suppose, that the Brookings Institution is warning him off the coin to weight his choice towards some more conventional approach. Continue reading

Podcast: A conversation with Mike Norman

Earlier today, I appeared on Mike Norman’s podcast for a long conversation about how I became interested in MMT, my recent blog series on Bruce Bartlett’s testimony to the Senate Budget Committee, and a discussion of how the history of the platinum coin’s rise to public consciousness. The conversation was a lot of fun, since Mike and I both tend not to mince words. The podcast is posted on his site and is also below.

The “Debt Crisis” According to Bruce Bartlett: Generational Accounting

This is the last post in my analysis and commentary on Bruce Bartlett’s testimony to the Senate Budget Committee. There’s one very significant issue left to discuss, and that is the issue of fiscal gap and generational accounting and whether it should be institutionalized in legislation. I’ll begin this post with that discussion and then end the series with my overall evaluation of his effort.

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Yes We Can Pay for Increasing Social Security Benefits

Some time ago, in the pages of USA Today, Duncan Black, better known to some as Atrios voiced the immediate need for increased Social Security benefits of 20% or more even if it means raising taxes on high incomes, or removing the payroll tax cap on salaries.

Black is right about the need for increased benefits; but legislating that increase doesn’t require increasing taxes. In fact, Congress should both increase benefits and remove the payroll tax entirely.

But how is that possible without greatly increasing “the national debt”? The answer to that one is easy. Don’t tax or borrow to pay for it. Just mint a single one oz. platinum coin at the beginning of each fiscal year with a face value large enough to cover expected the cost of SS payments. Doing it that way will both take care of retirement needs and also provide a huge shot in the arm for employment, since the increase in Social Security benefit payments and the ending of the payroll tax won’t be offset by tax increases elsewhere that will depress aggregate demand. Continue reading

Peterson/CBO Beat for Austerity Goes On!

By Joe Firestone

Recently, I’ve been writing about oligarchs advocating for entitlement cuts and austerity. I’ve discussed attacks on entitlement benefits for the elderly from Abby Huntsman (of MSNBC’s The Cycle) and Catherine Rampell (a Washington Post columnist), both the children of well-off individuals. These posts have come in the context of the English language release of Thomas Piketty’s Capital in the Twenty-First Century, and the more recent pre-publication release of a study by Martin Gilens and Benjamin I. Page using quantitative methods and empirical data to explore the question of whether the US is an oligarchy or a majoritarian democracy. They conclude:

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