By Joe Firestone
Some have responded to the recent boomlet for using Platinum Coin Seigniorage (PCS) as a solution to the debt ceiling problem, by reacting to the ridicule visited upon PCS advocates by know-nothings like Heidi Moore of the Guardian and Matt O’Brien of the Atlantic, by proposing “smaller ball” PCS than the clearly inadequate Trillion Dollar Coin (TDC) itself. This post will focus on J. D. Alt’s interesting post which makes five points about the TDC debate as it was addressed on a recent Chris Hayes show.
By Michael Hoexter
An Adjustable Liquidity Source and Liquidity Sink
While it may seem obvious and a tautology to treat money as a “liquidity source”, sometimes, especially in an area of life where there are many unexamined assumptions, it makes sense to rehearse the obvious. “High-powered” state-issued money is treated within accounting as an individual’s or a businesses “most liquid” asset but anything that functions as money confers “liquidity” on any individual who possesses that instrument or thing. Liquidity means that that object or instrument can be readily traded for wished-for goods and services. This liquidity can extend to “money-objects” other than state issued currency but the latter is in most contexts the most liquid money technology that we have.