Provided that the Senate and House follow through on the scenario now on the table, it looks like the game of chicken worked for the Democrats this time. We’re off the hook on default and Government shutdown for now, and Washington village pundits are in full-throated cries of celebration.
Congress is off the hook too. They don’t have to offer any solutions to real, rather than manufactured, problems.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, asset sales, austerity, consols, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, MMT, modern money theory, President Obama, public debt
This is Part VI of a six part series replying to a claim by the President at his recent White House News Conference. Part I covered the News Conference and the first two (the selective default, and the exploding option) of seven options the President might use to try save the US from defaulting in the face of continued deadlock in the Congress on raising the debt limit or repealing the law enabling it in its entirety. Part II discussed Platinum Coin Seigniorage, invoking the 14th amendment to justify continuing to issue conventional Treasury debt instruments, and consols. Part III discussed premium bonds, and Treasury sales of the Government’s material and cultural assets to the Federal Reserve. Part IV, then evaluated all seven options in light of variations among them in likely degree of legal difficulties they might face, and also the likely impact of each on confidence in the bond markets, if used. Part V then summarized my evaluation of the seven options. This part will end the series by saying first, what the President ought to do, and then by saying what I think he is most likely to do.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, asset sales, austerity, bill black, Bruce McF, consols, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, Jack Lew, MMT, modern money theory, President Obama, public debt
This is Part V of a six part series replying to a claim by the President at his recent White House News Conference. Part I covered the News Conference and the first two (the selective default, and the exploding option) of seven options the President might use to try save the US from defaulting in the face of continued deadlock in the Congress on raising the debt limit or repealing the law enabling it in its entirety. Part II discussed Platinum Coin Seigniorage, invoking the 14th amendment to justify continuing to issue conventional Treasury debt instruments, and consols. Part III discussed premium bonds, and Treasury sales of the Government’s material and cultural assets to the Federal Reserve. Part IV, then evaluated all seven options in light of variations among them in likely degree of legal difficulties they might face, and also the likely impact of each on confidence in the bond markets, if used.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, Ezra Klein, great betrayal, High Value Platinum Coin Seigniorage, kabuki, Matt Kevin Drum, MMT, modern money theory, President Obama, public debt
In Part I, Part II, and Part III, I listed and analyzed seven options, analyzed them and also pointed out that the President’s 14th amendment option, actually makes turning to the 14th as a justification for continuing to issue debt beyond the ceiling, a last resort, and also places an obligation on the President to exhaust other available options, whose legality is probable, but not finally determined by the Supreme Court. But, in his recent Press Conference, the President also failed to recognize any differences among the options in relation to his main point: that loss of public confidence caused by legal challenges would affect sales of debt instruments and other options including Platinum Coin Seigniorage (PCS).
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, Ezra Klein, great betrayal, High Value Platinum Coin Seigniorage, Kevin Drum, Matt Levine, Matthew Yglesias, MMT, modern money theory, President Obama, public debt, wigwam
In Part I of this six-part series I presented the President’s explanation of why he can’t use alternative options for coping with the default threat arising out of refusal to raise the debt ceiling, a summary of the kinds of difficulties characterizing it, and discussed two of seven options, selective default, and the exploding option, the President has to deal with it, apart from the way he seems to have chosen. In Part II I discussed the next three options, platinum coins, 14th amendment, and consols, and commented on the legal issues related to them. Here, in Part III, I’ll cover two options which have started getting attention most recently.
Posted in Joe Firestone
Tagged austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, great betrayal, Jack Balkin, Kevin Drum, L. Randall Wray, Matt Levine, MMT, modern money theory, President Obama, public debt, warren mosler, wigwam
This six-part series is a reply to the President’s glossing over the options open to him apart from playing “chicken” with the Republicans over the debt ceiling. Part I, presented the President’s explanation, a summary of the kinds of difficulties characterizing it, and discussed two of seven options, selective default, and the exploding option, the President has to deal with it, apart from the way he seems to have chosen. Part II will discuss his platinum coin, 14th amendment, and consols.
Platinum Coins, the 14th amendment, and Consols
3. Using the authority of a 1996 law to mint proof platinum coins with arbitrary face values in the trillions of dollars to fill the Treasury General Account (TGA) with enough money to cease issuing debt instruments, and even enough to pay off the existing debt. This option, originating with beowulf (Carlos Mucha)in its Trillion Dollar Coin (TDC) form has gotten a lot of attention. But a variation of it in its High Value Platinum Coin Seigniorage (HVPCS) form, requiring a coin with face value of $60 Trillion for example, has received much less attention, except in my own writing.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, austerity, bill black, chris cook, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, MMT, modern money theory, President Obama, public debt
The media and politicians in both parties are still largely echoing the Administration’s framing of the fiscal situation and absolving the President of his share of the blame for the debt limit crisis. They’re reinforcing his message They’re also preparing the way for a compromise, that will, almost certainly, result in hurtful cuts to Government spending including renewed consideration of “the Great Betrayal,” also known as “the Grand Bargain,” including passage of the chained CPI cuts to Social Security over the objections of a large majority of the American people.
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Tagged #PCS, 14th Amendment, austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, MMT, modern money theory, President Obama, public debt
It now looks like the big media and leaders in both parties are no longer focusing on the Government Shutdown crisis, but are now moving on to the notion that the shutdown is melding with the upcoming probable breaching of the debt limit to create a combined mother of all fiscal crises. Along with this, the media and many politicians, encouraged by the President’s standing “strong, strong, strong,” are now directing attention away from whether ObamaCare will be delayed or compromised, to other types of ransom the Administration might pay in return for both re-opening the Government and also providing an increase of an undetermined amount in the debt limit. Meanwhile there are reports that under increasing Wall Street pressure John Boehner is preparing to negotiate with House Democrats and allow a vote to pass a CR and a clean debt limit increase bill, in return for concessions he can take back to his caucus.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, Ezra Klein, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, jamie galbraith, kabuki, Mark Patterson, MMT, modern money theory, President Obama, public debt, Richard J. Eskow, WaPo, Yves Smith
By
Joseph M. Firestone and Lambert Strether
(Cross-posted from Naked Capitalism. Our thanks To Yves Smith of Naked Capitalism for permission to Cross-post.)
Many people, and especially Obama supporters, characterize the ACA (ObamaCare) as just starting or a work in progress and then go on to urge that the program will have glitches, needs to be tweaked, isn’t yet fully implemented, and so forth. We think it’s a mistake to see the ACA as just starting. We also think it’s a mistake not to weigh the costs of ObamaCare’s stately three-year progress toward partial coverage for the the American people, and just as important to weigh the opportunity costs.
The ACA was passed in March 2010, incorporating many features designed to meet Republican objections to the Bill. Yet, in the end, Democrats never put Medicare for All on the table, abandoned the public option and many other features, and did not get a single Republican vote in either chamber. Continue reading
Posted in Joe Firestone
Tagged ACA, Affordable Care Act, annual fatalities, HR 676, medicare for all, obama administration, opportunity cost
MSNBC continues on with its campaign to cast the Tea Party Republicans in the role of principal villains in the imminent Government budget/ government shutdown crisis and the likely coming debt ceiling crisis. The teabots, you see, are using the Republican majority in the House to demand more austerity in government and defunding of the Affordable Care Act (ACA). They’re using their bloc of votes in the House, along with the Hastert rule requiring a majority of the majority Republican caucus to veto any possible compromise vote of the whole House on a budget or a continuing resolution that would get bipartisan majority support keeping the government open past October 1.
Posted in Joe Firestone
Tagged #PCS, $60 Trillion Coin, 14th Amendment, austerity, bill black, debt ceiling, debt limit, debt limit crisis options, debt-subject-to-the-limit, default, deficit spending, grand bargain, great betrayal, High Value Platinum Coin Seigniorage, kabuki, MMT, modern money theory, President Obama, public debt, Yves Smith
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