Tag Archives: 14th Amendment

Some Platinum Coin Objections from the Mainstream: Part IV

Posted on November 14, 2015 by Joe Firestone | 5 comments

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 →

5 Comments

Posted in Joe Firestone

Tagged $100 Trillion coin, 14th Amendment, Brookings Institution, Conservatism, debt ceiling crisis, debt limit, fiscal myths, Mike Castle, Philip A. Wallach, Philip N. Diehl, platinum coin seigniorage, Political legitimacy, Trillion Dollar Coin, weirdness

Some Platinum Coin Objections from the Mainstream: Part III

Posted on November 13, 2015 by Joe Firestone | 13 comments

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 →

13 Comments

Posted in Joe Firestone

Tagged $100 Trillion coin, 14th Amendment, beowulf, Brookings Institution, Carlos Mucha, Conservatism, debt ceiling crisis, debt limit, fiscal myths, Mike Castle, Philip A. Wallach, Philip N. Diehl, platinum coin seigniorage, Trillion Dollar Coin

Some Platinum Coin Objections from the Mainstream: Part II

Posted on November 11, 2015 by Joe Firestone | 17 comments

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 →

17 Comments

Posted in Joe Firestone

Some Platinum Coin Objections from the Mainstream: Part I

Posted on November 11, 2015 by Joe Firestone | 10 comments

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 →

10 Comments

Posted in Joe Firestone

Tagged $100 Trillion coin, 14th Amendment, Brookings Institution, Conservatism, debt ceiling crisis, debt limit, fiscal myths, Philip A. Wallach, platinum coin seigniorage, sectoral financial balances model, SFB model, Trillion Dollar Coin

The Platinum Coin Returns

Posted on October 22, 2015 by Joe Firestone | 22 comments

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 →

22 Comments

Posted in Joe Firestone

Tagged $100 Trillion coin, 14th Amendment, Brookings Institution, debt ceiling crisis, debt limit, fiscal myths, Philip A. Wallach, platinum coin seigniorage, Trillion Dollar Coin

Rationalization and Obligation, Part VI: What He Ought to Do, What He Probably Will Do

Posted on October 15, 2013 by Joe Firestone | 19 comments

By Joe Firestone

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.

Continue reading →

19 Comments

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

Rationalization and Obligation, Part V: Differences Are Everything

Posted on October 14, 2013 by Joe Firestone | 13 comments

By Joe Firestone

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.

Continue reading →

13 Comments

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

Rationalization and Obligation, Part IV: Differences Among Options

Posted on October 14, 2013 by Joe Firestone | 18 comments

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).

Continue reading →

18 Comments

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

Rationalization and Obligation, Part II: Coins, the 14th, and Consols

Posted on October 12, 2013 by Joe Firestone | 18 comments

By Joe Firestone

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.

Continue reading →

18 Comments

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

Rationalization, Obligation, Part I: No Magic Bullets?

Posted on October 11, 2013 by Joe Firestone | 24 comments

By Joe Firestone

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.

Continue reading →