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By Tim Price, originally published on Next New Deal

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Coins Against Crazies (NYT)

Paul Krugman makes his case for minting the trillion-dollar platinum coin: It might sound like a big joke, but it's better to find a way to laugh off the debt ceiling threat than to allow Republicans to turn the full faith and credit of the United States into a punch line.

Debt Ceiling and Guns: Using Presidential Authority to the Fullest (Robert Reich)

Reich argues that the debt ceiling and mass gun violence both pose a threat to the U.S., and in times like this the president must use every obscure power at his disposal to protect the country. Even Superman had to pull out the super-ventriloquism on occasion.

The Debt Ceiling's Escape Hatch (NYT)

If coins don't cut it for you, Edward Kleinbard suggests the White House could sidestep the debt ceiling by issuing IOUs to the people and institutions to whom it owes money. Better yet, it could make them green and adorn them with the faces of dead presidents.

The debt reduction that's already happened (MSNBC)

Steve Benen notes that if we're going to treat deficit reduction as a priority, we should acknowledge that Obama has already signed $2.4 trillion worth into law, mostly in the form of spending cuts. Or does that make spending cuts socialist by the transitive property?

On Budget Cuts, the Political Gap is Informational, Not Ideological (Yahoo! Finance)

Dean Baker writes that the budget stalemate isn't caused by entitlements, because the Republican base doesn't want to cut them either. In fact, they don't want to cut most things, but they're convinced the deficit is driven by the U.S. equivalent of the Ministry of Silly Walks.

Is Jack Lew a Friend to Wall Street? (National Journal)

Michael Hirsh argues that sending Jack Lew to Treasury will continue what Roosevelt Institute Senior Fellow Rob Johnson calls the "Wall Street trading culture" of the Obama administration, which is often too busy watching out for banks to do much watching over them.

The Reason Republicans Don't Like Jack Lew (Slate)

Matthew Yglesias notes that the GOP's formerly cordial relationship with Jack Lew turned sour during the 2011 debt ceiling negotiations, when he repeatedly foiled their attempts to cut a deal by being that guy who knows things and understands how numbers add up.

Betrayed by Basel (NYT)

Simon Johnson writes that the Basel Committee's decision this week to water down its liquidity requirements for banks illustrates the danger of leaving international regulation in the hands of eurozone countries who have enough trouble regulating themselves.

The Global Domestic Workforce is Enormous—and Very Vulnerable (The Nation)

NND Editor Bryce Covert notes that a new report shows that there were at least 52.6 million domestic workers worldwide as of 2010, but given how poor working conditions are and how slow improvement has been, its best news for them is that misery has company.

Hilda Solis steps down as Labor Secretary. So how did she do? (WaPo)

Hilda Solis announced her resignation this week, and while she might not have cut a Frances Perkins-like profile for herself, Brad Plumer writes that she acquitted herself well for someone competing with the secretary of commerce for most obscure Cabinet position.

Originally posted to Daily Kos Economics on Fri Jan 11, 2013 at 07:10 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Of course Lew is a friend to Wall Street. (0+ / 0-)

    Could be a "serious" choice otherwise?

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Fri Jan 11, 2013 at 10:55:21 AM PST

  •  Scrip (0+ / 0-)

    I was listening to this on the radio last night.  The argument seems to be that since it is an IOU it does not build debt, but since it is backed by the US Government, which constitutionally must ultimately pay all it's debt, it is a secure financial investment.  Therefore a market for these scrips would emerge where investors would be willing to but them at a small discount.  Therefore, for people who need cash, these would be effective cash equivalents.

    While I disagree that the average social security recipient would have the sophistication to make such an exchange at a fair rate, I would imagine that congressional staff and government contractors and suppliers would.   Therefore it would make sense to immediately begin paying all congressional expenses using scrip, including salaries.  All payments made by the US government after a certain day, say Feb 1, to contractors will be paid by scrip.  That will give supplies enough time to decide if they want to continue to supply the US government, of if they wish to go into another line of business.

    For instance, Boeing and KBR may decide that they wish to operate more in the free market and less on the government dole.

    •  Interesting idea, but (2+ / 0-)
      Recommended by:
      JeffW, George Hier

      I don't think issuing scrip is a good idea, even to Congresspersons.

      The old econ adage is that 'bad money drives out good'.  In other words, anyone who gets paid in scrip will scramble immediately to negotiate it - exchange it for cash, goods, and services that are valued at or near the face value of the scrip, if possible.

      But the scrip will either be negotiated at a discount, or not accepted at all in some markets, making it a bad deal for anyone paid by the government in this way.

      Scrip is 'bad money', and I think it's a far worse solution to the debt ceiling issue than even the $1T coin.

  •  Lew = reality check (0+ / 0-)

    Say what you will about his willingness to entertain entitlement cuts, I've always been amused by Republican opposition to Lew.  Apparently they didn't even want to negotiate with him and the only reason seemed to be that he actually knew the details of the budget and spending.

    It is really sad when knowing the details of the budget is somehow a distinguishing characteristic for people involved in budget negotiations.

    What that means is everyone else is just making arbitrary demands that "seem" right without knowing the actual impact of their proposals.  I'd say that goes both ways too.

    There is truth on all sides. The question is how much.

    by slothlax on Fri Jan 11, 2013 at 01:36:57 PM PST

  •  Would it be a silly suggestion for Obama to use (0+ / 0-)

    some of his leftover election war chest (or any other available sources of cash for that matter) to do advertising campaigns selling to the American people all the good things that he has done and put into place that they directly benefit from?  Why not an entire ad campaign that spells out all the great shit people are getting and will get from Obamacare.  And oh by the way, all the bullshit you hear from Faux news that it's paid for by increasing your taxes is, well, bullshit.  And why not an ad campaign that Obama has signed into law $2.4 Trillion in debt reduction, and three-quarters of it is through spending cuts while only one-quarter is via revenue/taxes?  And why not an ad campaign that...oh screw it.  It will never happen.

  •  Don't forget Ezra Klein. (2+ / 0-)
    Recommended by:
    dcnw, George Hier
    The argument against minting the platinum coin is simply this: It makes it harder to solve the actual problem facing our country. 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. Minting the coin doesn’t so much solve that problem as surrender to it.

    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. It is of no solace that many of the intuitive arguments against the platinum coin can be calmly rebutted. It’s the wrong debate to be having.

    Followup column by Klein with further thoughts:

    "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

    by HeyMikey on Fri Jan 11, 2013 at 01:53:14 PM PST

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