Skip to main content

I'm not sure if this has been diaried yet, but I wanted to make sure it was, because I think Ezra Klein is exactly right, and the pro-coin arguments have gotten much press here  Klein's take is that we shouldn't mint the coin, but instead, we should fight this battle out in the public arena.  

His argument, in a nutshell:

The platinum coin is an attempt to delay a reckoning that we unfortunately need to have. It takes a debate that will properly focus on the GOP’s reckless threat to force the United States into default and refocuses it on a seemingly absurd power grab by the executive branch.
A little more from his argument over the tangerine squiggle. . . .

Klein notes that the coin is a problematic signal in terms of our Government's commitment to fiscal responsibility:

It is the first cousin of defaulting on our debts. As with true default, it proves to the financial markets that we can no longer be trusted to manage our economic affairs predictably and rationally. It’s evidence that American politics has transitioned from dysfunctional to broken and that all manner of once-ludicrous outcomes have muscled their way into the realm of possibility.
But to me, this isn't the most convincing part of his case.  I'm much more convinced by his central point, that the debt-cieling fight is a manifestation of a big problem in the Republican party--and that our country (with its two-party system) can't function if one of the parties behaves recklessly.  Klein writes:
That problem is not the debt ceiling, per se, though it manifests itself most dangerously through the debt ceiling. It’s a Republican Party that has grown extreme enough to persuade itself that stratagems like threatening default are reasonable. It’s that our two-party political system breaks down when one of the two parties comes unmoored.
Like many here, I want to see the President fight against the blind, ugly partisanship that characterizes many Republicans in Congress.  At first blush, the coin seems like an excellent way to do that, a sort of flipping off of their brinksman-partisanship . . . maybe something equal to the flipping off they are always giving us.  I enjoy a good "#($&@ you!" as much as anyone.

But that's not the way to fight this battle.  The way to fight this is to stand tough without gimmicks, tricks, or loopholes.  The President should look the Republican Party straight in the proverbial eye and say (and he has said): "No, I'm not going to negotiate on this, and you're not going to blow up the economy, and that's the end of the discussion.  You do what's right, period."  This case needs to be made clearly and loudly, so the whole of the country (including Wall Street) can pressure those elements in the Republican Party not inclined to act rationally.

Any other action will make this into a kind of game, a fray which the President wants, I think, to stay above.  Let this matter have full seriousness.  

Klein concludes:

There are two ways to truly resolve the debt-ceiling standoff. One is that the Republican Party needs to break, proving to itself and to the country that the adults remain in charge. The other is that America is pushed into default and voters — and the world — reckon with what we’ve become, and what needs to be done about it.
On this issue, the Republicans are clearly, manifestly wrong.  It's as likely an issue as any for them to break on.  I don't think it makes any sense for the President to do anything--issuing coins, included--which will distract Republicans or the country from that process.

Klein's article: http://www.washingtonpost.com/...

Tags

Poll

Mint the coin?

44%60 votes
47%64 votes
8%12 votes

| 136 votes | Vote | Results

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

    •  a recipe for "mint pie" (3+ / 0-)
      Recommended by:
      rja, nuclear winter solstice, winsock

      http://www.verybestbaking.com/...

      (It's probably bad form to post a recipe in your own diary.)

      •  yasureyoubetcha! that's the recipe alright! And I (2+ / 0-)
        Recommended by:
        claytonben, Odysseus

        didn't want to be the one to post one in yours, either.  But I can't even begin to fathom that serious people are talking about minting a coin, when waste and fraud and flat-out crime is all around us in the financial world and we can't even look directly at that at all? The Rule of Law has been fundamentally broken this new century in so many ways that anyone could go insane trying to fight just one of them.
             But I will start with two things: Let us have a reasonable transaction tax on every single vibration of the high frequency trading. If you had to do that by hand you couldn't, so if we can't make it illegal, make it taxed.            
           Then address MERS. This has been illegal from the get-go and they knew it then and they know it now. Any foreclosure or other transaction using this is suspect. Somebody ask Michael Lewis about this.
             

        MERS does not keep digital or hard copies of documents that formalize a loan’s change of beneficial ownership interest, which makes tracking fraud and errors through their record system extremely difficult.
            On beyond "difficult"- I should say it would be fraudulent.

        So Obama, if we can't prosecute the Bush administration for war crimes and profiteering, can we at least keep the paperwork straight?

  •  I don't understand why we cannot do (14+ / 0-)

    both.  In any event, I'd keep "all options on the table."

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Fri Jan 11, 2013 at 09:37:16 AM PST

  •  I thought Klein was pretty lucid, usually. (3+ / 0-)
    Recommended by:
    claytonben, miracle11, mikejay611

    Preparing for the Mayan doomsday prophecy by hastily trying to get in the good graces of snake-bird god Q’uq’umatz

    by dov12348 on Fri Jan 11, 2013 at 09:41:22 AM PST

  •  You know... (2+ / 0-)
    Recommended by:
    claytonben, mightymouse

    people accuse other people of being extremists, not pragmatists.

    Who are the 'purity trolls' here?

  •  The platinum coin is not a gimmick. (10+ / 0-)

    What it is is an option - an option that potentially defangs the rabid Republican offensive that could and might take down the world economy if they were to force this country to default on debt.

    Ezra, as usual, approaches these confrontations without full comprehension of just how irrational the Republican Party is.  He projects his own "rationality" onto them, but they are not rational people.  They aren't reasonable people who would refrain from throwing tantrums that would only serve to make any given situation worse.  They are not children either.  This isn't a parent-child relationship we are dealing with.  

    In any case, whether anything ever comes of the platinum coin idea or not, the fact that there may be an alternative to default in the event that the Republican Congress does act to force the US to default on debt is a good thing.

    How anyone "feels" about it being actually used at this point is sort of irrelevant - except to say that the Republicans would LOVE for the American public to reject the idea so that their debt ceiling threat could be more potent.

    •  ezra is over rated, way (3+ / 0-)
      Recommended by:
      inclusiveheart, katiec, RenMin

      over rated. To stay in good graces of his "contacts" he has to vomit what they have fed him. I'll go with Krugman on this. And it is a nice "in your face to GOP".

    •  I'm not convinced (1+ / 0-)
      Recommended by:
      claytonben

      that Ezra is overrating GOP rationality.  He acknowledges that the GOP is placing politics and obstruction before the good of the nation and he acknowledges that the GOP may very well force the nation into default.  But his point - and it is a very good one - is this:  Are we still committed to the ideal of three co-equal branches of government, or are we not? If we acknowledge that the legislative branch is broken, then how do we respond?  By letting it conspicuously fail and forcing it to change, or by coming up with a solution that effectively absolves the GOP House of responsibility and accountability, and deferring the reckoning for another day?

      Obama will be confronted with two choices - either consciously bend the law far beyond any imaginable intent of the legislation (Platinum coin), or jump into uncharted legal territory when determining which debts to pay and which not. My guess is, given Pres Obama's legal background and temperment, he will do the latter.  

      We are most likely going to default in one way or another.  Ultimately, the platinum coin is simply a different form of default.  We either default on our debt, or on our system of government.  I'd rather default on the debt and let the resulting mess force the legislative branch to function, than pay off the debt and jump into the deep waters of even more Presidential authority and even greater imbalance between dysfunctional branches of government.  

      And practically speaking, what happens if the President mints this "coin"?  The solution is as absurd as the situation that placed us in this dilemma in the first place.  Immediately, the question will be whether Obama can mint such a coin and how the President is grabbing power... instead of what the question should be - can a political party manipulate Congress to hold the economy hostage in order to extract concessions?  As painful as default would be, there should be no hostage negotiations and no platinum coins.  We have to deal with this directly.  

       

      “If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.” Charles Darwin

      by ivorybill on Fri Jan 11, 2013 at 11:07:22 AM PST

      [ Parent ]

    •  And by acknowledging the possibility (1+ / 0-)
      Recommended by:
      claytonben

      of miniting the coin, I think Obama undercuts his negotiating position.  The GOP would love for Obama to issue the coin.  By leaving it on the table, he actually makes it more likely to occur... it would be the best possible outcome from the GOP perspective.

      There can be only one position in all this, and that is an inflexible resolve to hold Congress accountable before the American people.  Obama needs to say" "Force the nation into default, and I go to the American people directly".  

      “If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.” Charles Darwin

      by ivorybill on Fri Jan 11, 2013 at 11:28:00 AM PST

      [ Parent ]

  •  I'll take "Don't collapse the world economy" (8+ / 0-)

    for $200 Alex.

    The Republicans are sociopaths, and WILL let us default.

    Mint the coin.

    "The future of man is not one billion of us fighting over limited resources on a soon-to-be dead planet. . .I won't go back into the cave for anyone."

    by Whimsical on Fri Jan 11, 2013 at 09:52:22 AM PST

    •  If they are determined to (0+ / 0-)

      then they will find a way to.

      Better to take the fight and expose them now, then do it in slow dribbles over the next decade, at the cost of our social safety net.  (They WILL demand that as the price for keeping us solvent, if not now, then soon.)

      •  Then Id rather fight them over the coin. (0+ / 0-)

        Because at least the coin mitigates the incredible damage they can do.

        Make no mistake, they WILL plunge us into default, and while we're in default and having this fight, millions, if not billions will suffer.

        IMO, the coin avoids that, which makes it the preferable option.

        "The future of man is not one billion of us fighting over limited resources on a soon-to-be dead planet. . .I won't go back into the cave for anyone."

        by Whimsical on Fri Jan 11, 2013 at 02:22:42 PM PST

        [ Parent ]

  •  Agree 100% (3+ / 0-)
    Recommended by:
    claytonben, Sylv, Odysseus

    If you want to look at this from a purely political strategy, the fiscal cliff started a crack in the Republican Party and the debt ceiling could complete it.  If we can put together the same coalition which passed the cliff bill - and really that should be easier with the ceiling bill - then for that band of "reasonable" Republicans in the House there will be no going back.  They are accepting the Tea Party crazy-wing challenge in their next primary so they might as well go all the way and become the governing wing of the Party, the people who actually do something.  They become the Republicans who help deliver immigration reform, gun reform, and other issues aimed at the country as a whole, not the sliver of their extreme base.  It could be a very good thing for the country.

  •  Your solution supposes that the Reps (5+ / 0-)
    Recommended by:
    inclusiveheart, ferg, raatz, RichM, RenMin

    will ultimately behave responsibly.

    I have no idea what empirical evidence you have to support that supposition.

    "Who is John Galt?" A two dimensional character in a third rate novel.

    by Inventor on Fri Jan 11, 2013 at 09:54:42 AM PST

    •  Dollar Signs (1+ / 0-)
      Recommended by:
      Aspe4

      and shame.

      Between Wall Street and some awful publicity, I DO think they will act responsibly.  And it would make certain necessary limits clear.  

      •  The problem is that they don't care. (2+ / 0-)
        Recommended by:
        RenMin, llywrch

        These are the people who are promoting the policies that voters resoundingly rejected in the last election.

        They've brought back anti-abortion legislation in the House.

        They've embraced guns after several tragedies involving gun violence.

        They're more than content to use the victims of Superstorm Sandy to extract further cuts to much needed domestic spending.

        These are not rational people. They don't care about the publicity. They care about turning the middle class and working poor into serfs.

        It's not wise to play games with sociopaths like them. It's wise to mint the coin and neutralize any leverage they perceive themselves as having.

        Ezra Klein has a problem with seeing the big picture. You do not treat monsters as reasonable people. He'd be well-advised to follow that mantra when dealing with Republicans.

        The Grand Bargain must be stopped at all costs to protect the 99%.

        by cybrestrike on Fri Jan 11, 2013 at 12:45:31 PM PST

        [ Parent ]

        •  +1 (0+ / 0-)

          Well said sir.  Consider yourself tipped, because due to site hypocrisy, I currently can't.

          "The future of man is not one billion of us fighting over limited resources on a soon-to-be dead planet. . .I won't go back into the cave for anyone."

          by Whimsical on Fri Jan 11, 2013 at 02:23:36 PM PST

          [ Parent ]

  •  Krugman (6+ / 0-)

    discussed Klein's take in his blog a day or two ago. While acknowledging the truth that the GOP will have to be broken at some point soon, his concern is that they won't back down because they really are that crazy. In that case he thinks opting for default over the coin is too risky.

    I tend to agree that if the choices are in fact default or coin, I'd go for the coin and break the GOP another day. Even though I have concerns about how the media would report the coin, and thus how it would affect public opinion.

    Republicans...think the American standard of living is a fine thing--so long as it doesn't spread to all the people. And they admire the Government of the United States so much that they would like to buy it. Harry S. Truman

    by fenway49 on Fri Jan 11, 2013 at 09:58:25 AM PST

    •  I think that the public would see an (4+ / 0-)
      Recommended by:
      RichM, pdx kirk, Aspe4, RenMin

      intransigent House Republican caucus as having forced the Executive Branch to resort to an unusual, but legal option to defaulting on the US debt and tanking the world economy.

      But the mere fact that there could be an option that the Executive Branch could turn to if the House were to force a debt crisis is probably enough to keep them from pushing us over the edge of what is probably a real cliff.  If that option is removed from the equation, Ezra is likely to get the fist fight he wants and market destabilization, too - even if we don't default.

      The truth is that Ezra is basically advocating for the erratic and unstable Banana Republic style of governing in some ways more than the platinum coin advocates are.

      •  Resorting to a gimmick more likely (0+ / 0-)

        And what about the Chinese and financial markets?  I predict minting the coin would destabilize our standing and currency -- effectively sending us over the cliff anyway.

        Even Democrats can be asses. Look at Rahm Emanuel.

        by Helpless on Fri Jan 11, 2013 at 10:21:52 AM PST

        [ Parent ]

        •  They won't care as long as they know (3+ / 0-)
          Recommended by:
          pdx kirk, Odysseus, RenMin

          we will and do pay our bills.

          The Chinese and the financial markets are more sophisticated in their understanding of monetary policy than Klein is.

          Anyway, you've inadvertently made my point.  The financiers aren't worried about how we organize payment of debt as long as they get paid.  

          What they do care a lot about, though, is the failure to pay.  That's the threatening scenario for them - minting a coin - selling the White House - whatever it takes to get them paid isn't that relevant to them as long as they get their cash, they're happy.

          •  I agree with you (1+ / 0-)
            Recommended by:
            inclusiveheart

            but, as concerns the public, it's like proving a negative. Similar to the stimulus bill. If the press treats it as a gimmick he can say, look, not paying our creditors would be much, much worse. But how do you prove it? These stories get pretty well set in stone in a couple of news cycles. And there will always be people to buy the GOP line: It wasn't this or default, he could have accepted our bill with cuts.

            Republicans...think the American standard of living is a fine thing--so long as it doesn't spread to all the people. And they admire the Government of the United States so much that they would like to buy it. Harry S. Truman

            by fenway49 on Fri Jan 11, 2013 at 12:07:33 PM PST

            [ Parent ]

            •  Based on the level of angst (1+ / 0-)
              Recommended by:
              fenway49

              that I witnessed in the run-up to the so-called fiscal cliff, I think that people will be far more fearful of the failure to pay debt than they will be concerned with the alternative of possibly minting of a coin to avoid the default.

              •  Could be (2+ / 0-)
                Recommended by:
                inclusiveheart, RenMin

                I hope so.

                My concern is the potential for plausible-sounding misrepresentations with such a novel solution. "In an unprecedented and flagrant move, the President has used a law designed for commemorative coins to avoid coming to terms with this nation's spending problem." The issue is complex enough that a fair amount of people would fall for that.

                Republicans...think the American standard of living is a fine thing--so long as it doesn't spread to all the people. And they admire the Government of the United States so much that they would like to buy it. Harry S. Truman

                by fenway49 on Fri Jan 11, 2013 at 12:44:51 PM PST

                [ Parent ]

                •  I am still trying to dig out of my 90's (1+ / 0-)
                  Recommended by:
                  llywrch

                  political memory a similar moment that Clinton faced during his tenure - not the shut down - but in the same timeframe where he expanded Executive Branch power - which I still think was a bad thing - but the American people were so fucking fed up with the intransigence of the Republican House at that time that pretty much no one except for Republicans and some Constitutional scholars got pissed off at Clinton for doing what he did.  Bush did plenty of things that people ignored because they were too focused on other things to worry about the real consequences.

                  In any case, this platinum coin option was written by and passed in Congress - so Obama isn't unilaterally making it up as he goes along like both Clinton and Bush did at certain points - and were they to take advantage of it as an option, I am sure that there would be a lot of misinformation put out there, but still I think most people would ultimately simply say, "It beats the alternative."

        •  How? (0+ / 0-)

          "[W]e shall see the reign of witches pass over . . . and the people, recovering their true spirit, restore their government to its true principles." Jefferson

          by RenMin on Fri Jan 11, 2013 at 02:32:13 PM PST

          [ Parent ]

    •  If... (3+ / 0-)
      Recommended by:
      kaminpdx, RenMin, llywrch

      The time comes when the coin must be minted - then the GOP will be broken at that point.  Obama could simply say - 'They shot the hostage, I did all I could to keep the global economy from collapsing'.

      'Goodwill' between the GOP and the President is as abundant as unicorn farts - Me'

      by RichM on Fri Jan 11, 2013 at 10:27:19 AM PST

      [ Parent ]

    •  Nobel Prize Winner (2+ / 0-)
      Recommended by:
      fenway49, RenMin

      I go with Krugman over Ezra Klein any day of the week.  

      Klein is right from a rational point of view.  But that is just wishful thinking.  And where has that gotten us with the GOP'ers in the recent past?

  •  The coin option should not be ruled out (9+ / 0-)

    I don't think the President should telegraph absolutely everything he can or might do in the event Congress fails to raise the debt ceiling, but I completely agree with this:

    The President should look the Republican Party straight in the proverbial eye and say (and he has said): "No, I'm not going to negotiate on this, and you're not going to blow up the economy, and that's the end of the discussion.  You do what's right, period."  This case needs to be made clearly and loudly, so the whole of the country (including Wall Street) can pressure those elements in the Republican Party not inclined to act rationally.
    However, betting on the Republican party to act rationally is very risky.

    If they ultimately do end up acting responsibly, then great, problem solved and let's move on.

    However, if they do not and the government has to start not paying certain bills, then I think the coin option could be used at that point with a minimum of backlash.  

    Once there is enough outcry from those groups or constituents who aren't getting funds, then announcing the minting of a platinum coin of sufficient denomination to cover those costs would be seen as a viable alternative to continuing to let the obstructionists in Congress hold their hostages.  Hopefully, it never comes to that but given what we know about the GOP, I would not want to take the option off the table.

    "Why do we see the same old Republicans all over the news all the time when they were kicked out for screwing everything up?" - socratic's grandma

    by Michael James on Fri Jan 11, 2013 at 10:06:13 AM PST

  •  The question is... (6+ / 0-)
    Recommended by:
    winsock, kaminpdx, pdx kirk, Aspe4, Sylv, fenway49

    Are we, as a nation, willing to let the GOP shoot the hostage in order to prove a point?  Ezra is a little misguided here.  The coin isn't an alternative to the debt limit, the coin is an emergency CPR measure if the GOP decides to shoot the hostage.  I think the Obama admin SHOULD hold that answer close to the chest.  It is an option of last resort, not the answer to negotiation.

    'Goodwill' between the GOP and the President is as abundant as unicorn farts - Me'

    by RichM on Fri Jan 11, 2013 at 10:19:24 AM PST

  •  Minting coins (1+ / 0-)
    Recommended by:
    claytonben

    will not avoid a confrontation with Republicans.  It may even have the unintended effect of unifying them.  The coin, if it is minted at all, should be produced only after we've gone through the ceiling as a possible last resort -- not done or even threatened preemptively.  I'm a bit surprised that Obama has already signaled ruling out a 14th Amendment challenge.  As others have noted, it seems premature to be taking options off the table.  But I suppose it does serve to force action with the ball more firmly in Congress's court.

    Things work out best for those who make the best of the way things work out.

    by winsock on Fri Jan 11, 2013 at 10:31:54 AM PST

    •  so what if they are unified? (2+ / 0-)
      Recommended by:
      winsock, wombat

      The more that act like idiots the better. Do the coin AND fight it out.  Crush them like roaches on the airwaves for their irresponsible behavior.

      •  I'm not saying (0+ / 0-)

        Obama should or should not mint a coin for the purpose of damaging the GOP.  They're damaged either way and yes, if the coin happens, there is plenty of fighting left that the GOP will lose.

        Things work out best for those who make the best of the way things work out.

        by winsock on Fri Jan 11, 2013 at 10:55:05 AM PST

        [ Parent ]

  •  All one needs is the credible threat (1+ / 0-)
    Recommended by:
    Aspe4

    of minting the coin to induce doubt in the ever-declining non-wingnut contingent of the Republican party (see, "Wall Street Republican")  That, together with the President's tough "no negotiation" stance should be enough for the President to force the GOP to back down on the debt-limit threat -- hopefully for good.

    The coin needs to be on the table as a very-last-resort, emergency-parachute kind of option in order for the credible threat to work.  If Obama were to say right now that he is not willing to do it, that would be a negotiating mistake in my opinion.  Ezra's a smart guy, but I think he fell asleep in his econ classes when game theory was being discussed.
     

    You wanna f*%^ with Big Bird? You gotta come through me.

    by DaveV on Fri Jan 11, 2013 at 10:42:45 AM PST

  •  Ez erred at least twice . . . (0+ / 0-)

    1) The Republicans never persuaded anyone of anything.  It merely pulls the wool over the eyes of its followers which isn't all that hard to do since they never object to anything their party does.  Persuasion would involve making a reasoned argument when all we've heard is "Obama spending."  Ezra and others should have asked how it's Obama's spending when all of it was approved by the GOP majority in the House for the last two years.  And he should have asked why the GOP postponed the sequestration cuts passed with 174 Republican votes in the House.
    2) There are more than two ways to deal with the situation. When any caucus in Congress uses its power to inflict damage on the nation, it should face consequences.

    "Democracy is a life; and involves continual struggle." ---'Fighting Bob' LaFollette

    by leftreborn on Fri Jan 11, 2013 at 10:44:53 AM PST

  •  Coin = kick the can (2+ / 0-)
    Recommended by:
    claytonben, Aspe4

    If the coin option is used, I think Congress will simply not raise the debt ceiling and a year or so from now when the money runs out again we'll have the same fight, except with an extra trillion of consequences.  I have no reason to believe that Congress will be any more functional in a year from now than it will be a month from now, and so it's likely that you could get a SECOND coin minted.

    Once you mint the second coin I think the argument that money markets won't be affected because of the temporary nature of the coin will be undermined pretty hard, and the result could be inflation.

    •  Debt ceiling is an artificial target (1+ / 0-)
      Recommended by:
      RenMin

      Roundhead ... just repeat... "it's not real...it's not real".  The battle is being won by passing Obamacare and the defense cuts that will follow ending the wars (they called this the "peace divident" in the 90's).  The coin(s) just eliminate a stupid and ineffectual process.  

    •  What is the transmission mechanism? (0+ / 0-)

      As bonddad says, "Put another way, if the Fed prints the money and then the banks don't lend it and consumers don't spend it, the devaluation of the currency can't occur.  That lack of transmission of the Fed's policy is exactly what is occurring right now."

      This editorial at Forbes also makes some good points.
      Forbes.com: John Harvey: Money Growth Does Not Cause Inflation!

      There’s no reason to throw the baby out with the bath water, so let’s retain the equation. However, we need new assumptions with respect to M, V, P, and y:

          M: A precise definition and identification of money is elusive in a modern, credit-money economy, and its volume can change either with or without direct central bank intervention. In addition, the monetary authority cannot raise the supply of money without the cooperation of the private sector. Because central banks almost always target interest rates (the price of holding cash) rather than the quantity of money, they tend to simply accommodate demands from banks. When private banks communicate that they need more reserves for loans and offer government debt to the Fed, the Fed buys it. It’s the private sector that is in the driver’s seat in this respect, not the central bank. The central bank’s impact is indirect and heavily dependent on what the rest of the economy is willing to do (which is, incidentally, why all the QE and QE II money is just sitting in bank vaults).

          V: The velocity of money is, indeed, related to people’s behavior and the structure of the financial system, but there are discernable patterns. It is not constant even over the short run.

          P: While it is true that factors like production bottlenecks can be a source of price movements, the economy is not so competitive that there are not firms or workers who find themselves able to manipulate the prices and wages they charge. The most important inflationary episode in recent history was the direct result of a cartel, i.e., OPEC, flexing its muscle. Asset price bubbles can also cause price increases (as they are now). The key here, however, is that P CAN be the initiating factor–in fact, it has to be, since M can’t.

          y: The economy can and does come to rest at less-than-full employment. Hence, while it is possible for y to be at its maximum, it most certainly does not have to be.

      -7.75 -4.67

      "Freedom's just another word for nothing left to lose."

      There are no Christians in foxholes.

      by Odysseus on Fri Jan 11, 2013 at 12:21:20 PM PST

      [ Parent ]

      •  Confidence (1+ / 0-)
        Recommended by:
        Odysseus

        The key thing here I think is confidence: how confident is the market that printed (or coined) money won't actually be put into circulation?  The mere existence of it could be seen as a potential threat, especially when it's so clear that Congress is ignorant and dysfunctional.

        At the very least it can create some uncertainty, and uncertainty makes borrowing more expensive.

    •  Make it a $60 trillion coin (0+ / 0-)

      Then the debt ceiling is irrelevant for the next 20-30 years.

      And there is no need for austerity because there can be no argument that we're "running out of money" or "getting to be like Greece."

      "[W]e shall see the reign of witches pass over . . . and the people, recovering their true spirit, restore their government to its true principles." Jefferson

      by RenMin on Fri Jan 11, 2013 at 02:37:30 PM PST

      [ Parent ]

  •  the problem is (1+ / 0-)
    Recommended by:
    Aspe4

    That Republicans will pass a debt ceiling increase and attached to it will be something that Democrats can't vote for.  So The Senate and the President will be forced to accept it or vote it down, or veto it.

    At that point the issue may become muddled in the eyes of the people as to who is causing default.

    Republicans will stand pat and say they did pass the increase.

    The President will say, yes, but they also gutted Obamacare.

    So then, the President will have to defend himself over protecting his signature legislation vs averting fiscal chaos.

    The idea that the GOP will somehow find enough sane members to vote with Democrats on a clean bill strains credulity.  They can't even have a clean bill for Hurricane Sandy relief, despite being completely trashed by members of their own party for it.

  •  Minting the coin is the ultimate gimmick. (0+ / 0-)

    It's gratifying in many ways but I have come to the personal decision that it's the opposite of what we should be doing, which is to force the plutocratic elite itself to bring about change in its Republican Party, and only default can do that.  

    You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

    by Rich in PA on Fri Jan 11, 2013 at 11:59:26 AM PST

  •  I'll settle for a Budget. Hi'ya Harry?? n/t (0+ / 0-)

    "When you're wounded and left on Afghanistan's plains, And the women come out to cut up what remains, Jest roll to your rifle and blow out your brains An' go to your Gawd like a soldier." Rudyard Kipling

    by EdMass on Fri Jan 11, 2013 at 12:04:22 PM PST

    •  Waste of time and effort (1+ / 0-)
      Recommended by:
      RenMin

      There is about as much chance of a budget through normal procedures being passsed as it that the moon is made of cheese.  In the process the Republicans will simply take things that Democrats offer and try to bash them over the head in the court of public opinion.  So why even bother?

      •  umm, it's the law? n/t (1+ / 0-)
        Recommended by:
        RenMin

        "When you're wounded and left on Afghanistan's plains, And the women come out to cut up what remains, Jest roll to your rifle and blow out your brains An' go to your Gawd like a soldier." Rudyard Kipling

        by EdMass on Fri Jan 11, 2013 at 01:37:08 PM PST

        [ Parent ]

  •  So Ezra has two things that we all have (1+ / 0-)
    Recommended by:
    RenMin

    One being an opinion...



    Perpetual crisis means never having to say you're sorry.

    by chuckvw on Fri Jan 11, 2013 at 02:08:51 PM PST

  •  Klein is dead wrong (1+ / 0-)
    Recommended by:
    RenMin

    He long ago embraced neoliberal economics and is one of the deficit doves promoting austerity lite. I would never consider him a champion of progressive causes. The MMT community supports PCS because it can be game changing. Klein is arguing for a continuation of the status quo.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site