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Cross posted at Voices on the Square and the Stars Hollow Gazette
That’s right. It’s now undeniably pathetic or immoral assuming this is what they want and it probably is. The Trillion Dollar Coin and a 14th amendment challenge have now been rejected. What do we have instead? Insulting fake pseudo macho posturing from the President about what he will or will not negotiate on as if there has ever been anything this POTUS won’t negotiate on. It’s already happening as we speak.

Besides, he just got done with negotiating away his “iron clad” promise to raise income taxes on the rich above $250,000. But this time we are supposed to believe the same fairy tale? Or maybe when I say negotiate when I really mean “negotiate.” Yeah, this is actually what he and John Boehner wanted as in to show us “extremists” who care about people instead of idiotic deficit terrorism on the backs of the poor a thing or two.

Conspiracy of Two

“I’m the President of the United States,” Obama told Boehner [in 2011]. “You’re the Speaker of the House. We’re the two most responsible leaders right now.” And so they began to talk about the truly epic possibility of using the threat, the genuine danger of default, to freeze out their respective extremists and make the kind of historic deal that no one really thought possible anymore — bigger than when Reagan and Tip O’Neill overhauled the tax code in 1986 or when Bill Clinton and Newt Gingrich passed welfare reform a decade later. It would include deeper cuts in spending, the elimination of all kinds of tax loopholes and lower income tax rates for all. “Come on, you and I,” Boehner admitted telling Obama. “Let’s lock arms, and we’ll jump out of the boat together.”
It’s too late to spin tales of the intrepid politician that stands up to Congress. You know, as Stephen Colbert says regarding journalists, fiction. Debt ceilings were never negotiated until this POTUS put his full faith in crediting John Boehner for NOT using the debt ceiling as a hostage as part of the Obama/Bush tax cut deal in 2010. Oops. I predicted this. Others deluded themselves thinking this mess happening right now extended from back then was somehow an abstract form of 11th dimensional chess again and again. When will they learn?

I put the blame at the top because debt negotiations are always there between the House and the Treasury in the executive branch so there no putting it all on just Congress or Republicans in Congress. The many backroom deals are always negotiated with Congress from the top; the kind with the massive political and human damage that result from the people having little voice or a choice. This was an embarrassing and unprecedented result ensuing from 2010 to 2011 to now which humiliated everyone in the Democratic Party.

And yet now we are supposed to believe the White House’s tough talk BS as if SS cuts they put on the table with Chained CPI won’t be part of the stupid sequestration grand bargain coming up as they plead to raise the debt ceiling with Republicans who are fine with the consequences.  As if there is a credible reason that the same type of harsh austerity offered up last time won’t be considered again given the real non arbitrary consequences. We know this thanks to Bob Woodward and the memo he released from the new Wall St Treasury Jack Lew back when he was head of Obama’s OMB.

I know reality bothers some people when their fragile oh so fragile illusions are shattered, but by now one either understands this or one needs to at least show some intellectual curiosity and do some reading and pontificating.  Our President and future Democratic Presidents along with this do nothing Congress cannot be trusted to truly end wars, fight for any steps towards Medicare for All, enact real financial reform, or handle what was once routine when it comes to the debt ceiling or the fiscal and monetary systems they need remedial help understanding. Or perhaps they do understand and are just ethically challenged instead as they look to exploit the 99% by lying about these operations and what is possible within the framework of our money system.

The President’s ignorant villager “wonks” are truly challenged when it comes to law and the monetary operations between the Treasury and the Fed. Case in point, what’s written into law already renders Ezra Klein’s pathetic ignorant excuses rather dead as Letsgetitdone said.

Disconnect: High Value Platinum Coin Vs. Austerity!

Yesterday, Ezra Klein reported in the Washington Post that:
The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.

That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today.

“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,”
he said.

The inclusion of the Federal Reserve is significant. For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.


Fed Independence?

First,  here are a some quotes from the US Code and comments.

"…banks, when required by the Secretary of the Treasury, shall act as fiscal agents of the United States; and the revenues of the Government or any part thereof may be deposited in such banks, and disbursements may be made by checks drawn against such deposits."12 USC 391

The coins are legal tender, and disbursements can't be made unless a deposit is credited. So, both imply that all banks that receive such deposits must credit them, and that the Bank officers at the New York Fed cannot refuse to credit the face values of a deposit of coins by the US Mint in its Public Enterprise Fund (PEF) Account. As for the Board of Governors, including the Fed Chair, forbidding the New York Fed from crediting the deposit, there is this part of the USC:

". . . wherever any power vested by this chapter in the Board of Governors of the Federal Reserve System or the Federal reserve agent appears to conflict with the powers of the Secretary of the Treasury, such powers shall be exercised subject to the supervision and control of the Secretary." 12 USC 246
The US code says that the Secretary has supervision and control, not the Fed Chair, or the bank officers at any of the banks, however exalted, within the Fed system. So, if anyone in the Fed system wants to go to Court about this; it's hard to see that they could get standing even to file an injunction.

Poor Ezra. I guess he better go ask Michael Lewis what to think again as he did about the financial crisis he also got wrong, because he just doesn't get it. That Goldman Sachs Treasury Spokesman is wrong.

Bottom line: the Trillion Dollar Coin is definitively legal and more than just a way out of this mess; it was a game changer changing the national conversation to a different way to fund debt payments without prioritizing the 1% bond holders at private banks over the 99%. The use of high value platinum coins as legal tender is scalable, wouldn’t cause inflation, and perfectly legal. They could replace the use of Treasury debt sales which are only interest rate setting tools which are irrelevant in the age of impotent monetary policy at the zero bound.   Nothing would change except the Treasury would be credited by the Federal Reserve for the sale of interest-free high value Platinum coins instead of interest-bearing Treasury bonds.

The gold standard died with the end of Bretton Woods in August 1971 and good riddance. We have the ability to create interest free bonds and money from the Fed as the Treasury’s fiscal agent. Private commercial banks have access to the free money from the Fed’s discount window. We learned from the 80s that Monetarism is a fiction. Milton Friedman’s whole philosophy (Quantity of Money) was discredited in the attempts to control the money supply because private banks have the same power to create money as the Fed does and it can destroy it the same way taxation destroys the money supply to regulate demand pull inflation by destroying loans.

Private commercial banks create loans and deposits; a debit and a credit legally tenderized bound for reserves (that don’t’ chase goods unless allowed) credited from the Fed easily marked up on a computer as well. They earn interest on these cash reserves meaning they don’t need interest bearing Treasury securities. However, they buy them once we issue them because it is a good deal.

Government debt that pays interest is bought with the free non interest money these banks and other member bank bond holders have direct access to. Therefore there is no need to issue new debt or pair it with money typed into a spread sheet at the Fed. High value Platinum Coin Seigniorage can change this system that is being politically exploited across the board to exploit people. PCS can change the conversation. PCS can end the lies behind austerity we are being told right now in the fake insulting posturing we are hearing from the WH and Congress.

It’s sad that during their vacation time (we don’t get that time) they cannot even take the time to learn even the most basic rudimentary concepts that govern our whole modern money system. We can appropriate and allocate where wealth is concentrated and at what time minting coins to make debt payments and printing money in order to create the deficits we need for the private sector as far as Wynne Godley's sectoral balances are concerned.

Everyone is taking bigger steps on this path than Congress or the White House. I was proud to see Markos feature a FP story on the absolute relevance of the TDC referencing Philip Diehl whom was the coauthor of the law. I was proud that the TDC got attention across the blogosphere and the White House had to answer questions on it, even if their final answer is one big fail. Regardless of what they or their villagers say, the idea will stay because of having to go through these ridiculous debt ceiling negotiations every few years thanks to what happened in 2010. Sooner or later enough people will wake up to monetary reality instead of the austerity pushed by fear that induces tears for families everywhere and not just this year.

This isn’t just a wonky conversation on a blog. This is about getting resources to those that need them by creating the means for their efficient distribution. We create money, and are ultimately not revenue, debt, or deficit constrained; we are only politically constrained because politicians just don’t seem to care enough about people. We can be appropriate human beings and Congress can either get educated and/or gain a moral compass by appropriating the spending on what human beings need with the means to get them.

As activists we can demand the truth about all of this from our Representatives in all branches of government, because these lies being spun by all of them waste lives and we only get one.

What a waste.

I'm now in the angry and cynical camp, but regardless, please sign this petition:

End austerity: Mint the 60 trillion dollar coin

Originally posted to The Amateur Left on Wed Jan 16, 2013 at 08:20 AM PST.

Also republished by Money and Public Purpose.

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Comment Preferences

  •  Boehner approves (0+ / 0-)

    Mint that damn coin, it would solve all his troubles.

    •  Um No. (7+ / 0-)

      his party tried to pass a law against it.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 09:12:34 AM PST

      [ Parent ]

      •  Dumb argument (1+ / 0-)
        Recommended by:
        Deep Texan

        his party also voted against his position on Sandy relief and the debt ceiling deal. And naturally, his party can't actually pass such a law.
        Make no mistake, Boehner would love nothing more than to turn the debate from "default or no default" to attacking Obama for an action that even Jon Stewart ridicules.
        You think Republicans actually care about policy?

      •  priceman - You know that you and I are on (3+ / 0-)
        Recommended by:
        priceman, TheMomCat, Wolf10

        the same side in the larger argument and that I'm all about HVPCS but I do thing Theston has a point here. Politically, this was too radical for Boehner to move on is such a short time but  I do think there were huge advantages for him and I don't think he is stupid (corrupt and evil but not stupid).

        The idea of the PC has now entered the zeitgeist (thanks in no small part to several of the people here at dKos who have been blogging and tweeting and talking their hearts out on this issue since long before I even knew MMT existed.) The conversation WILL continue. I, for one, would love to see a panel on it at the upcoming NN 13. I think HVPCS has the ability to open policy space for progressives that is unprecedented in our lifetimes and we need to get informed and organized quickly around this fact. Here's why - now that the possibility is known, our opponents, and here I am talking about bankers and the 1% execs and the mega-corporations - now that the possibility is known they are already paying attention. They can already taste the profits that would result from their efforts to shape the HVPCS to their advantage. Once I realized this I suddenly understood that HVPCS IS going to happen. It IS. Bohener IS going to be a HUGE proponent of it...for all the wrong reasons. It will be up to us to make the counter argument and because there is still air around this issue and because the GOP is not yet in lock step - our time to shape this conversation is right now.

        One small framing point, we need to realize that, for once, we are out in front of an issue THEY are going to support and time is of the essence in terms of framing the meme prior to THEM taking hold of it. Just remember how much the framing of "right to life" has cost us. The meme is ALL and we need to focus in tightly and fiercely.

        OH - and one last thing - if anyone else is interested in thinking about proposing a panel for NN 13 on this subject, please contact me ( I can at least facilitate setting up an organizing conversation so that we can figure out our best options.

        "When in doubt, do the brave thing." - Jan Smuts

        by bunnygirl60 on Wed Jan 16, 2013 at 11:30:00 AM PST

        [ Parent ]

        •  I appreciate you weighing in (2+ / 0-)
          Recommended by:
          TheMomCat, ek hornbeck

          and would love to see a panel on it at the upcoming NN 13, though I don't agree about that. I think the 1% bond holders are happy with their interest earning issued bonds issued mainly for their benefit as they are not much use now as a practical monetary policy tool.

          I don't believe Boehner has any interest in this or will ever, though we are mostly in agreement.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Jan 16, 2013 at 12:12:05 PM PST

          [ Parent ]

          •  You don't think the defense contractors and (1+ / 0-)
            Recommended by:

            and big oil and all their friends and cohorts don't have designs on TRILLIONS of dollars? You don't think banks want the business that would be derived from that activity? I think those guys would sell the souls of their children for a piece of this pie. (So we need to make sure they don't get it.)

            "When in doubt, do the brave thing." - Jan Smuts

            by bunnygirl60 on Wed Jan 16, 2013 at 05:58:13 PM PST

            [ Parent ]

            •  Well they can't get it by design (0+ / 0-)

              It has to be appropriated by Congress to be released by the TGA though I'm sure they would want a trillion dollars. It's still about passing a trillion dollar appropriation through Congress and John Boehner himself and Boehner's constituency still rails about the 787 billion in the stimulus.

              They have their footing in the bond market where we create money to be lent back to us while paying all of them interest on the bonds we don't have to issue. They would have to find other dollars assets with PCS which is mainly for public debt appropriations yet safe. I'm sure defense contractors would also love all the reserves parked at the accounts at the Fed but don't have direct access to them. Banks would love that activity if Congress passed another trillion dollar appropriation as they did for the Iraq and Afghanistan wars which are above 5 trillion but they would have to convince Congress to pass those appropriations and the public is war weary.

              Democrats are more up with the TDC(what I saw merely as a starting point) and Jerold Nadler even had it in his proposal. So I think Republicans would rather keep using the debt as a fear mongering tool rather than change their rhetoric and go for high value PCS which they don't understand given their rhetoric about the amount of platinum in the coin. This is why I am saying I don't see that point and am more angry none of this is being considered as debt will continue to be used like the debt ceiling and what is based on the sequestration.

              I don't negotiate grand bargains with deficit terrorists!

              by priceman on Wed Jan 16, 2013 at 10:48:42 PM PST

              [ Parent ]

  •  I think that the POTUS himself (6+ / 0-)

    White House Counsel, DoJ, Treasury Dept, and the Fed all thought that the 14th Amendment challenge and the Trillion Dollar Coin plan were not legally viable options. These are the groups who would have been involved in the legal defense of these approaches if they had been used. The WH likely received opinions from these entities stating that they did not think these positions could be successfully defended. As a constitutional lawyer himself President Obama was in a good position to evaluate these options and he ultimately rejected them on legal grounds.

    "let's talk about that"

    by VClib on Wed Jan 16, 2013 at 08:31:48 AM PST

    •  You'll forgive me if I don't agree (15+ / 0-)

      since their laughable interpretatations of many things including due process. I laid the law out so therefore since no rebuttal has been offered people can feel all they want, but the POTUS and his legal counsel have to answer many other credible analysts including Harvard Law Professor Laurence Tribe and others. Sorry. It's legal. Gotta find a better excuse.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 08:37:18 AM PST

      [ Parent ]

      •  apparently actual debate is not necessary (9+ / 0-)

        snickering and ad-hom attacks with a heaping helping of "No, we aren't going to do that" is all that's required.

        if necessary for years; if necessary, alone

        by SouthernLiberalinMD on Wed Jan 16, 2013 at 09:01:55 AM PST

        [ Parent ]

      •  priceman - even if Laurence Tribe thinks it's (3+ / 0-)
        Recommended by:
        Deep Texan, uffdalib, notrouble

        legal that does not make it so. There is certainly no overwhelming consensus on these approaches. None of us will know if it is legal unless one of these approaches is implemented and then litigated and decided by the courts. It is the opinion of those within the Administration who would have to defend these actions that counts. If in their collective view they didn't feel comfortable defending them then that's what counts. The views of those of us on the sidelines, including luminaries like Lawrence Tribe, don't count when making these decisions. We don't have to defend the actions.

        "let's talk about that"

        by VClib on Wed Jan 16, 2013 at 09:12:45 AM PST

        [ Parent ]

        •  Regardless of the adminsitration's view of the (7+ / 0-)

          legal status, why reject the idea at all? All they had to say was that all options were on the table when asked about it - let the other side waste time and oxygen on it.

          •  Elected Dems rarely want a strong hand. (2+ / 0-)
            Recommended by:
            priceman, Nada Lemming

            And even if they have a strong hand, they don't play it that way.

            Obama rejected the tools that would have strengthened his hand in negotiations. On purpose. They are always doing this kind of stuff.

            Continually throwing life lines to the Repubs. Validating their "expertise" by nominating them for Sec Def, etc.

        •  VClib this is not a strong argument at all (3+ / 0-)
          Recommended by:
          Cassiodorus, aliasalias, ek hornbeck

          Because this WH wants to sell out and make cuts to SS doesn't make Laurence Tribe's opinion less valid. Neither does anyone's lazyness in citing the law in this diary make it any less valid.

          "If the President does it or decides not to do it, it's not legal."
          yeah. OK.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Jan 16, 2013 at 09:22:42 AM PST

          [ Parent ]

          •  I never stated that they aren't legal (1+ / 0-)
            Recommended by:

            All I wrote was that in the view of the WH these were not approaches they were willing to defend. They have a lot of company in the legal community. This is a judgement call they get to make. A different administration might try using one of these options.

            "let's talk about that"

            by VClib on Wed Jan 16, 2013 at 09:35:27 AM PST

            [ Parent ]

        •  VClib - here's how we know HVPCS is likely to (2+ / 0-)
          Recommended by:
          priceman, ek hornbeck

          be ruled legal, the liberals on the SCOTUS would probably not rule against Obama, were his administration to take it to court, and the subject of broad Presidential authority is something Roberts might be persuaded to support but - here's the kicker - it is a pet project of Scalia. Anything, let me repeat, ANYTHING that is likely to get support from liberals AND SCALIA is as sure as a bet can be.

          "When in doubt, do the brave thing." - Jan Smuts

          by bunnygirl60 on Wed Jan 16, 2013 at 11:38:45 AM PST

          [ Parent ]

        •  Not just Tribe (4+ / 0-)

          1. Tribe

          2. Jack Balkin, Yale Constitutional Law Professor

          3. Probably Jonathan Turley GWO Con Law Professor who publish a favorable blog post on his site back in summer 2011

          4. Beowulf (Carlos Mucha) the brilliant lawyer who discovered PCS in the law

          5. Philip Diehl, Clinton's Director of the Mint who co-wrote the Law

          6. Me a Ph.D. political scientist with a bit of background in Con Law

          7. The general consensus of people who've written about the coin. The illegality of PCS is contended by a minority. Most, even those who are against using the coin, acknowledge its legality, while often ridiculing for other, not very good, reasons.

          The Administration didn't try to contest the legality of the coin. The Treasury Secretary just said they wouldn't use and joined with the Fed in saying they didn't think it was appropriate for the debt ceiling. Their response really didn't take the coin off the table. What it was intended to do was to short circuit the coin discussion before people realized that it provided a way to get rid of debt instrument-based creation of money.

          The Administration, which has sold out to Wall Street and the Fed, Wall Street creature that it is, didn't want that. They like their interest payments and their risk-free investments.

        •  If we actually believed (3+ / 0-)
          Recommended by:
          ek hornbeck, Nada Lemming, priceman

          that Obama was acting in good faith this might seem plausible.  But Obama has one and only one goal in sight, and that is the Grand Bargain.  He lives and breaths Simpson Bowles.  The Grand Bargain is his legacy--as "the adult in the room."  He honest-to-God believes we have run out of money and that the Financial Sector takes preference in all matters.  So he needs to be stopped.  The $60T "coin" is currenty the best defense against his Grand Bargain goal.  We should be stampeding the streets in support of it, not laughing along with the totally deluded Jon Stewart.  As Priceman points out, its time we fessed up to Obama's deluded ambitions.  It's not the Republicans we should fear most, it's the Democrats that embrace austerity who pose the most long term danger.

      •  Even if legal IMO it is not politcally saleable (4+ / 0-)

        It looks like an end run around the Congress (well, more than looks like: it is). And try explaining the trillion-dollar coin to the average voter, that it's just an accounting maneuver, etc. Fox has been feeding paranoia about Obama usurping the Constitution, burying the nation in debt etc. for years. Minting the coin only reinforces these, sensible as it might otherwise be.

        •  Doesn't the average voter read Krugman's blog? (0+ / 0-)
        •  Like offering cuts to raise the debt ceiling? Yeah (8+ / 0-)

          Try explaining to them why their SS is cut too. So what, the POTUS has emergency powers to invoke and exploits legal loopholes all the time but for something important, NO. And it's only a temporary runaround of Congress until the do nothing Congress gets its act together without austerity. See, I don't support failures that lead up to austerity and I support legal monetary reality .

          Yeah, because normal people don't understand things we should give up. let's not do anything about climate change while we are at it. hey will never understand unless a better effort is made as explaining the trillion dollar coin and beyond would start the conversation towards monetary reality and that is very valuable.

          preaching deficit hysteria thanks to the political fail this POTUS caused putting us here is what's politically dangerous.

          Sorry, you're wrong. the political argument for this is staggering, against it is self defeating. This is the mess that was made it should be cleaned up this way and for good.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Jan 16, 2013 at 09:53:18 AM PST

          [ Parent ]

        •  so what ? Congress said he couldn't go to war in (3+ / 0-)
          Recommended by:
          priceman, limpidglass, David Futurama

          Libya, so he didn't, technically,... but tens of thousands of bombing sorties later, a Country in shambles and chaos from a "kinetic action", ( the 'disposition matrix' on steroids), the results were the same as if a war had been waged 'officially'.

          Obama also has the biggest microphone available and he can explain to the American public the difference between doing it vs NOT doing it. Then he can send forth all his people to be on all the talking head shows, in the meantime it works and nothing Faux Noise said happened, Y2K passed uneventfully folks.

          without the ants the rainforest dies

          by aliasalias on Wed Jan 16, 2013 at 10:28:55 AM PST

          [ Parent ]

        •  Duh!!! (3+ / 0-)
          Recommended by:
          priceman, Calgacus, ek hornbeck

          Congress passed the PCS law; so how is this going around them? And how does a minority of the House, which is a majority of the Republican members, get to be equated to "the Congress?" What the President would doing is avoiding breaching, the debt ceiling law, while paying the bills of the United States; so how is that "going around the Congress?"

          Also, the things the President has been usurping, and there are many, aren't the things that Fox is excited about. It's our rights to exercise our basic first amendment freedoms he's usurping.

          Finally, if Obama minted the $60 T coin and began to quickly pay down the debt, then Fox would shut up about he's burying the nation in debt.

  •  I support a lot of what you write (9+ / 0-)

    but this time I don't think you are reading the tea leaves correctly.

    This president is enough of a liberal, he is no economic populist,  but he really isn't taking this particular stance on the debt ceiling as the path to austerity.  This time he is right, congress just needs to do its job.   Debt ceiling increases need to return to business as usual.  Not become an ever widening cess pool of games and countermeasures pushing the limits of the Constitution or the law.

    Congress voted to spend the money, now it needs to be paid for.   This should never be an issue.   It is not an excuse.   Obama will continue to cut spending and take aim at programs we want him to leave alone, he doesn't even need a fig leaf for that, let alone some complicated ruse.

    •  OK, hope you're right, often like your (9+ / 0-)

      comments--but believe you're dead wrong. All the signs since 2010 show that priceman's analysis of Obama is pretty much spot-on.

      if necessary for years; if necessary, alone

      by SouthernLiberalinMD on Wed Jan 16, 2013 at 08:57:52 AM PST

      [ Parent ]

    •  He turned the debt ceiling into the political tool (5+ / 0-)

      You can either repeat what eh said and make excuses for that fact but I said it was going to happen and it did. the debt ceiling will not turn to business as usual. Sorry, this POTUs made it this way. This was unprecedented; this isn't me wishing the POTUS was an economic populist or anything else.

      I'm pretty underwhelmed that you ignored everything in the diary and just repeated the POTUS  press conference. the dent ceiling is now a hostage and this is the way out. It's a better way to fund appropriation already rung up without SS cuts or medicare cuts and it defeats the moves towards austerity when this comes up again.

      Politicians always use times of self induced crisis to make the cuts they pretend they don't want a la Shock Doctrine.

      It doesn't make it OK and it doesn't mean you have to believe all the lies they say.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 09:02:37 AM PST

      [ Parent ]

      •  "unprecedented" (5+ / 0-)

        Well, except for that time during the Clinton administration...

        And I must confess I'm fairly mystified about why you are determined to blame Obama for the way the Republicans are acting.  Unless, of course, you are operating on the "everything is Obama's fault" line of reasoning.

        Then this diary makes perfect sense, in that genre.

        •  Clinton handled it well. Not like this (5+ / 0-)

          so this is unprecedented. Clinton didn't spend his entire first and second terms on BS like this.

          So yeah, like I said, unprecedented.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Jan 16, 2013 at 09:18:59 AM PST

          [ Parent ]

          •  You are right (1+ / 0-)
            Recommended by:
            Deep Texan

            Clinton gave up on health care reform and gave up on gays serving in the military openly. Obama fixed those things, and quite a few more things, besides.

            Clinton did cooperate with Republicans to "reform" welfare. Oh, and he did have a school uniform initiative.

            •  I don't like everything Clinton did, BUT (3+ / 0-)
              Recommended by:
              aliasalias, limpidglass, ek hornbeck

              he knew how to handle a debt ceiling fight which is the point I actually made and in the process he created SCHIP.

              I don't like how Obama hired Clinton's Rubinites that caused the crash. Maybe you do, I don't know.

              Obama didn't fix those things, it was the activists that chained themselves to the WH fence. Oh and it's really Dolecare, not even Hillary's old plan.

              I don't negotiate grand bargains with deficit terrorists!

              by priceman on Wed Jan 16, 2013 at 10:09:44 AM PST

              [ Parent ]

          •  from your own cited article (3+ / 0-)
            Recommended by:
            Deep Texan, uffdalib, Calgacus
            THE MOST CRUCIAL difference between Clinton’s debt limit battle and the current crisis is that, in 1996, the Republicans were bluffing. No Republican seriously considered defaulting on the debt to be a viable option. “It was essentially unthinkable,”Alice Rivlin, director of the Office of Management and Budget under Clinton, told me. “There was nobody in the Congress who really contemplated forcing a default.” Larry Haas, communications director for the OMB from 1994 to 1997, agreed. “Everybody in the White House and on Capitol Hill knew that the conflict had to end at some point,” Hass told me.

            This time around, default seems like a real possibility. Some Republicans, such as Michele Bachmann, have argued that default would be a form of “tough love,” necessary for the country to get its finances in order. Other Republicans simply don’t believe that the government will default if the debt ceiling is not raised. “Even a Clinton, I think, would have had a very difficult time during this current crop of Republicans,” Brookings senior fellowIsabel Sawhill told me.

            The second big difference is that in 1995, the economy was roaring.

            The hate for Clinton was intense, but it still lacked the racism of today's GOP for Obama.  There was no tea party caucus of absolute batshit crazy.  There have been close to 20 more years of economic insanity, the country moving right, in no small part helped by Clinton's concessions.   This is not about Bill Clinton was GOD who made no mistakes and Obama is a wussy sell out.

            And even if Obama was wrong in 2011 and I believe he was,  and I wrote some ill tempered letters to the White House pointing out the stupidity of giving into hostage taking as it only encourages that kind of behavior,  he can and should stand up this time and refuse to deal.      And not by some slight of hand, but plain out "NO".  Simple, two letters, doesn't allow much room for argument.

            This time, in my opinion, he is right to just say no.   I also don't trust him, I think he still seeks a grand bargain, that he will continue to look at cutting the social safety net, but not over this.  

            •  The government still shut down back then (2+ / 0-)
              Recommended by:
              ek hornbeck, lostinamerica

              Kind of defeats that in reality(and was expensive) and hasn't shut down today.

              I never said this:

              This is not about Bill Clinton was GOD who made no mistakes and Obama is a wussy sell out.
              He can't say no this time because no one believes him and why should they?

              I stand by what I said in this diary. Once you open up Pandora's Box there is no going back.

              I don't negotiate grand bargains with deficit terrorists!

              by priceman on Wed Jan 16, 2013 at 10:13:44 AM PST

              [ Parent ]

              •  by that reasoning (1+ / 0-)
                Recommended by:
                Deep Texan

                there would never be a chance to correct policy, change course, enact new regulations, and I just don't believe that.  Such an absolutist view that there is only ever one chance to do something and then all opportunity is lost forever doesn't comport with the history of the world.  There are second chances, and fresh starts and better luck the next time around.  The first attempt is rarely the only ever possible attempt.

                •  You should read the Shock Doctrine (5+ / 0-)

                  and this diary. Just a suggestion. The evidence is quite strong.

                  I don't negotiate grand bargains with deficit terrorists!

                  by priceman on Wed Jan 16, 2013 at 10:27:24 AM PST

                  [ Parent ]

                  •  you should stop deflecting (0+ / 0-)

                    by implying I simply don't understand or need to read more and you need to engage when your own cites don't back up your version of history.

                    There is more going on in this fight than just the debt ceiling, and the debt ceiling is a self imposed technicality from an old statute, it isn't about monetary theory or austerity or really the heart of the current battle.

                    And things have changed, Obama never used the hostage argument before, we did, he just caved.   Twice now, Boehner has ignored the Hastert rule and allowed law to pass with Democratic votes, changing the power and momentum.  It won't make Obama give up on the grand bargain,  but my very strong feeling is that you all are going for the feint, the debt ceiling, which will pass without a whimper.  The real fight is elsewhere.  Obama has picked his battlefield and it isn't the one you think it is.  We both have strong opinions, time will tell.

                    •  You have to take the time to explain how (2+ / 0-)
                      Recommended by:
                      ek hornbeck, jellyyork

                      Nothing has changed and everything is how I have written it. You have to do the work to explain why you think things are different but you didn't. I deflected nothing.

                      Ignoring the Hastert rule means nothing.

                      I don't negotiate grand bargains with deficit terrorists!

                      by priceman on Wed Jan 16, 2013 at 10:45:36 AM PST

                      [ Parent ]

                      •  actually the Hastert (0+ / 0-)

                        ruling falling twice in the last two weeks is meaningful.

                        It means a change in the political dynamic, it means the existence of a working and workable congress.   It means the bat shit crazy contingent just lost its absolute veto power over every action.    It isn't the end,  there are plenty of things Obama will still compromise away.   But it is a huge change in the balance of power.  

                        That the power still lies with the 1% still hasn't changed, but nobody really expected they were going away that easily, did they?     This is a long war, lots of battles,  and it isn't just about creating austerity.

                        Plenty has started to change there as well.    Sufficient issues are pushing a new aspect into the game, too much austerity does kill the golden goose.  Enough so that the official arms of the 1% are rethinking their own game plans.   You don't think the IMF blinking means something?  I do.   They didn't change their goals, but they realize they may be heading down a dead alley.  They are more dangerous if they moderate,   its hard to punch holes in jello.

                        •  The only reason Boehner didn't invoke (6+ / 0-)

                          the Hastert rule was because of the bad publicity over Hurricane Sandy aid bill and split with the Northeast Republicans. It made Boehner and the Tea Party look bad. It put Boehner's position in jeopardy. Power is everything to these people

                          I doubt highly that the Hastert rule will be suspended over the debt, sequestration or any legislation in the future that is passed by the Senate.

                          These radical feral children of the House are determined to have their way at any cost and the President, who wants to link Social Security to the chained CPI and cut Medicare, will give in to them.

                          I don't foresee any clean bill raising the debt ceiling.

                          As for an agreement about the manufactured crisis over the sequester, there will be no cuts to military spending, no new revenue and no jobs created.

                          Just my prediction based on past history of the last 4 years.

                          "There is but one evil party with two names, and it will be elected despite all I can do or say." W.E.B. Dubois, 1956

                          by TheMomCat on Wed Jan 16, 2013 at 01:48:25 PM PST

                          [ Parent ]

            •  The Gov Shutdown (6+ / 0-)

              was in November 1995; it ended in early 1996. Public Law 104-208, the platinum coin legislation didn't get promulgated until 1996.

        •  The PCS law (4+ / 0-)

          wasn't in place at the time of the R-induced Gov shutdown. Also the legislation was co-authored by Like Castle (R-DE) and Philip Diehl Clinton's Director of the Mint in 1995, and passed in 1996. Diehl may be responsible for the drafting of the platinum coin provision, and it may have been drafted just that way to give Clinton a weapon against the Republicans if they tried the kinds of tactics they are using now.

    •  Hahahaha! (6+ / 0-)
      This president is enough of a liberal

      "I've seen the flame of hope among the hopeless/ And that was truly the biggest heartbreak of all" -- Bruce Cockburn

      by Cassiodorus on Wed Jan 16, 2013 at 09:57:34 AM PST

      [ Parent ]

    •  Except that this diary isn't addressing the debt (2+ / 0-)
      Recommended by:
      priceman, gooderservice

      ceiling, it's about austerity and the high value PCS. The $1T PC (TDC) is, politically, an entirely different matter. Congress does need to do his job and we do need to keep pressure on Obama, who may very well be getting ready to sell us out. All that being said, HCPCS remains a realistic game-changer for the future and we need to keep talking about it.

      "When in doubt, do the brave thing." - Jan Smuts

      by bunnygirl60 on Wed Jan 16, 2013 at 11:45:15 AM PST

      [ Parent ]

    •  He should do his job too (6+ / 0-)

      As a constitutional officer he is sworn to uphold the 14th amendment to the Constitution; but he's allowing the Rs to question the validity of US debts every day in the week. He has an obligation to end this damage to the full faith and credit of the United States. And one way he can do that almost overnight is to mint that $60 T coin and use the proceeds to immediately pay off large chunks of debt, he can probably have 60% of the debt-subject-to-limit paid off in a year, and with visible ease if he does that. Then no one will question the validity of the US debt ever again.

    •  I really, really (1+ / 0-)
      Recommended by:

      wish you were right.  But Obama wants his Grand Bargain first and foremost, I'm afraid.  Not because he wants austerity from a libertarian point of view, but because he does not understand how money works.  So, I'm afraid if you want to predict which way Obama will go, follow the bread crumbs to the Grand Bargain.

      I truly hope you can some day tell me I'm wrong here.  But he's already shown his cards pretty strongly.

  •  You call yourself (3+ / 1-)
    Recommended by:
    FG, Theston, sviscusi
    Hidden by:

    a progressive?  What a piker. 60 Trillion dollar coin? Get out....we need a 600,000 Trillion dollar coin,with a check to each american for at least 100,000 dollars in the mail tomorrow.
    Now thats progressive!

  •  solutions? (11+ / 0-)

    these gimmicks let republicans defer their responsibility and give them ammo to use against us.

    and it's just more can kicking, whether you agree with the debt problem or not.

    congress, specifically republicans, need to do their job. they have backed themselves into a corner.

    -You want to change the system, run for office.

    by Deep Texan on Wed Jan 16, 2013 at 08:43:02 AM PST

  •  ... (1+ / 0-)
    Recommended by:

    It's still nice to know that you personally know better than the folks who deals with this stuff as a career.

    The greatest trick the Devil ever pulled was convincing online commenters that they have anything to say.-- B.F.

    by lcj98 on Wed Jan 16, 2013 at 08:43:29 AM PST

  •  it's all just a coin trick anyway (6+ / 0-)

    You know how misdirection works in magic tricks work, right? You direct the mark to look at the wrong thing with one hand while you steal their wallet with your other hand.

    The Hastert Rule has been trashed - the debt ceiling will be raised with bipartaisan votes and token opposition from the teabaggers. The coin and the 14th are non-issues now. Instead, look to the sequester showdown for the grand bargain and austerity.

    "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

    by quill on Wed Jan 16, 2013 at 08:51:43 AM PST

    •  Factually wrong (5+ / 0-)

      It's how our system already works, just tweaked. No matgic unless the US  and the USD is Narnia.

      It will be raised but with cuts to SS and Medicare among other things. the debt ceiling is coming up with the sequester. Gotta get with the program. this is basic stuff.

      PCS and the 14th aren't dead because you say they are. The laws are still on the books.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 09:10:39 AM PST

      [ Parent ]

      •  I meant: they're dead, politically speaking (2+ / 0-)
        Recommended by:
        uffdalib, Ian S

        I personally think the coin idea is pretty cool, but you can sense, just looking at the latest House vote on Sandy aid, that the Republican leadership has given up on using the debt ceiling for hostage demands. I think that breaking the Hastert Rule was a clear signal to the GOP crazies to back down or be isolated. Various GOP leaders have hinted in news interviews that they are going to put their effort into the sequester battle instead. Obama is acting the same way, with all of his tough talk about not negotiating. You get the feeling that there is some kind of quid pro quo in the upper levels (by Beltway osmosis, not claiming a CT).

        Think about it: this makes a lot of sense for all parties, except the diehard teabaggers and economic terrorists. The Wallstreet bankers, big corps, and even Koch bros, who buy everyone's lunches in DC aren't happy about the prospect of another shutdown. It's bad for business, and what's bad for them is very bad for your average politician. Also, the Republican leaders have got to be thinking about how badly they were spanked the last time they caused a shutdown and Obama's acting like he might just let them do it.

        OTOH, the sequester negotiations are much better ground politically for Republicans. The biggest challenge for them will be to get enough Repubs on board to vote with a coalition of turncoat Dems to make "reasonable" and "acceptable" cuts to social safety net programs when the time comes (that would be after much political posturing and bluffing, followed by McConnell, Boehner and Obama making a fait-accompli deal behind closed doors). I think it may still not happen: a lot of the GOP would rather shoot themselves in the head than negotiate with Democrats, even if it furthers their goals of damaging the New Deal programs and would do great strategic harm to Democrats leading up to 2014.

        "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

        by quill on Wed Jan 16, 2013 at 11:25:57 AM PST

        [ Parent ]

    •  I agree with you on that prognosis (3+ / 0-)
      Recommended by:
      ratcityreprobate, Deep Texan, quill

      and have since the Republicans' collapse on the fiscal cliff negotiations.

      But I suspect this diarist isn't going to give up on his unified theory of Obama's perfidy even after a clean debt ceiling bill passes Congress. He has too much emotionally invested in it.

      •  Well, (2+ / 0-)
        Recommended by:
        TheMomCat, priceman

        let's see where this all comes out. We'll know then, won't we? If he insists on damaging cuts to entitlements and discretionary spending when he knows he can mint a $60 T and cut the political ground from under the austerity mongers, then we'll know what his intentions are. But I put it to you that we'd be safer assuming we can't trust him and do what we need to do to persuade him to use a very big coin to avoid the Rs having any political justification for austerity.

    •  agreed insofar as the Republicans (2+ / 0-)
      Recommended by:
      PhilJD, quill

      will not use the debt ceiling as a weapon in the short term. That much is clear from Obama's speech and Boehner's public remarks that the GOP may get more leverage from the sequester than the debt ceiling.

      Probably the deal that Obama proposes will go like this: stripping the defense cuts from the sequester in exchange for the GOP agreeing to no longer threatening to default.

      Then the GOP will be free to threaten to impose the sequester on the country, because it cuts domestic spending (which they hate) and not military (which they love). And Obama will say, in order to avoid this, we must cut SS/Medicare.

      In this sense, you're correct, the trillion dollar coin is a non-issue.

      I am glad, however, that the diarist is using it as an opportunity to discuss an important issue: who has the power to create money?

      "In America, the law is king." --Thomas Paine

      by limpidglass on Wed Jan 16, 2013 at 09:29:22 AM PST

      [ Parent ]

      •  it isn't enough to create money (2+ / 0-)
        Recommended by:
        PhilJD, kalmoth

        it is giving money value that is the psychological trick that controls the masses.   Right now, the masses don't believe in the trillion dollar coin having a trillion dollars of value.  The fact that we can throw around numbers without any real sense of what those numbers represent in buying power in real goods and services.

        It went from a trillion dollar coin to a 60 trillion dollar coin.  One of the most salient features of tne MBS fraud was values of securities many times the real world production of goods and services, that the enormity of the disparity made ordinary people question who could have believed once they heard the numbers.   It isn't enough that money is fiat, it has to have the faith of people that it has value, as amorphous and irrational as the value assignment may be.  And we may want to bring down the system, change the system, but we will get nowhere if we leave millions or billions of people, businesses all staring at us like we're crazy.   They have to believe first.

        If Jon Stewart says the idea is fucking crazy, it is a bridge too far right now.  Not because Stewart is an expert on the law or monetary theory, but like all good comedians, he is an expert on the fine line between belief and disbelief in people.  It is how you get laughs.  He knows his business and we need to do our homework.

        •  LOFL (2+ / 0-)
          Recommended by:
          priceman, ek hornbeck

          John Stewart says it it must be true.

          Just a few suggestions... Put down the remote, back away from the teevee slowly, google the address of the local library, inform yourself and make your own decisions.

          There are no sacred cows.

          by LaEscapee on Wed Jan 16, 2013 at 11:06:58 AM PST

          [ Parent ]

          •  just a really stupid comment (2+ / 0-)
            Recommended by:
            kalmoth, sviscusi

            on your part, I don't have cable, I don't watch tv, I read things.  Like articles on the Krugman/Stewart arguments.   And clearly, you didn't address what I said, at all, not on facts, not on my inferences.  You just made a smart ass comment that betrayed your need to do more reading, more thinking, and more analysis before you criticize me.

            Mostly, you'll notice I didn't say Stewart (who doesn't spell his name "John" by the way) was right on the law or monetary theory, I pointed out he didn't know either.   I made one claim about what he does understand.  Try addressing that if you think you know so much about the subject.

            •  Yes by all means (2+ / 0-)
              Recommended by:
              ek hornbeck, Calgacus

              check my spelling.

              Here is a thought maybe "Jon" doesn't understand it because the main objective by the ruling class has been to quash even the thought that there is a simple way out. Or possibly he was looking for a laugh because you know that is his job and all.

              There are no sacred cows.

              by LaEscapee on Wed Jan 16, 2013 at 11:23:00 AM PST

              [ Parent ]

              •  and maybe (1+ / 0-)
                Recommended by:

                because the idea hasn't yet gained sufficient acceptance to pass the laugh test is the reason Stewart played it for laughs.  Gandhi, an incredibly effective activist, had something to say about the process that included laughter.

                Ideas win not just because they are right, but when the time is right.   They win because the groundwork is laid.  The right idea at the wrong time just dies.

                •  I agree (2+ / 0-)
                  Recommended by:
                  ek hornbeck, Calgacus
                  Ideas win not just because they are right, but when the time is right.   They win because the groundwork is laid.  The right idea at the wrong time just dies.
                  Would you agree that just a little help from "our elected leaders" in laying that "groundwork" might affect the debate? Instead what we get is the ssdd telling "the people" they just don't understand. Very pragmatic/bi-partisan of them wouldn't you agree. No thinking outside the box for this crew, we wouldn't want to upset the real base.

                  There are no sacred cows.

                  by LaEscapee on Wed Jan 16, 2013 at 11:51:33 AM PST

                  [ Parent ]

                  •  I would agree (1+ / 0-)
                    Recommended by:

                    that a long drawn out court battle, especially with this Supreme Court, over the law, would create uncertainty, economic downturn into the medium term, and would keep alive the debt ceiling battle longer than just demanding that Congress pass a clean bill, especially since we appear to have a window for just such a passage.

                    The downturn in the economy at the last debt ceiling debacle was real.   So,  this is an idea that needs to filter out from the academics and into the popular consciousness, and needs someone who isn't Obama to be the proponent.  He may not be everything I want in a President, but I am more than aware of the racist crazy that floats around his every move.   He isn't going to be able to be the protagonist for this.    If we want to rewrite our entire monetary underpinings, we need someone else.

        •  I think a lot of Jon Stewart's segments (4+ / 0-)
          Recommended by:
          priceman, LaEscapee, quill, TheMomCat

          are brilliant.  They cover a topic with comedy but most importantly with facts.

          I wasn't impressed at all with Stewart's segment answering Krugman.  Krugman is the expert, Jon is not, their show was on hiatus for three weeks and so many things to cover when they got back and this is a complicated issue, and what Krugman said wasn't that bad against Jon, but yet Jon had to show his ignorance again because Krugman said something about him.

          That was childish on Jon's part to do that.

          Jon could have least invited Krugman on the show after Jon educated himself on the issue.  i.e., that stock guy from Fox, can't remember his name.

          Instead, Jon answered with juvenile potshots.

          If Jon Stewart says the idea is fucking crazy, it is a bridge too far right now.  Not because Stewart is an expert on the law or monetary theory, but like all good comedians, he is an expert on the fine line between belief and disbelief in people.  It is how you get laughs.  He knows his business and we need to do our homework.
          •  what people at DKOS (0+ / 0-)

            tend to know and what people in general, including a large part of Jon Stewart's audience know, don't tend to be the same.  And then remember how much more informed and liberal Jon's regular audience is compared to the population at large of the United States.

            And then remember that the audience for the plantinum coin isn't just the United States but a marketplace around the world.    Do the Chinese and the EU believe we have a 60 trillion dollar coin worth 60 trillion.   Theory is great, writing a law is great.   Action, belief, acceptance, all those things don't happen because a handful of people say so.

            That the powers that hold sway are generally allied against the idea of the coin,  creating value out of nothing hurts those powers, means that it is an idea that won't get a fair hearing.  Again, you want to change the world, the world has to be prepared for the changes you want.

            •  Sorry, I'm not a fan of a lot of excuses, one (2+ / 0-)
              Recommended by:
              priceman, LaEscapee

              after another, after another.  But go right ahead.

              •  I haven't heard (0+ / 0-)

                anything in this long conversation that wasn't excuses from the various people that responded.   No facts,  no policy histories that show why this will work now, nothing but assertions that things must happen one way, because.

                I haven't listed excuses, I have discussed how things work in the real world, how ideas are changed over time, that beliefs change before long term constructive changes in actions and laws come about, etc.   Those processes are not just my opinion, that aren't excuses, they are what really happens when people work to change the world, look at any big battle, the labor unions, women's suffereage,  civil rights battles in mid 20th century America,  big changes anywhere.

            •  Platinum coin is business as usual (1+ / 0-)
              Recommended by:
              ek hornbeck

              Do the Chinese and the EU believe we have a 60 trillion dollar coin worth 60 trillion.

              Well, they believe we have million dollar bonds or whatever denomination we sell them in. They believe we have whatever amount of reserves we want to create - and are sometimes desperate for them (the Asian Financial Crisis (not China though), the Global Financial Crisis (many Euro banks & CBs desparately needed and got swap lines from the Fed).

              That the powers that hold sway are generally allied against the idea of the coin,  creating value out of nothing hurts those powers, means that it is an idea that won't get a fair hearing.

              "Creating value out of nothing" doesn't hurt these powers. They need the process to go on for them to have power. They just don't want anyone else to understand how simple it all is, so they remain in control. The Treasury creates giant bonds and mints coins ex nihilo. The Fed creates reserves ex nihilo in return for other financial assets, usually.  

              The platinum coin is no different at all. The platinum coin is business as usual, sensible, tried-and-true business as usual. The opponents, the debt-limiters are saboteurs who want to throw yet another monkey wrench into the workings of a sputtering machine that we all live off.  Because this poor sputtering machine works so well it needs constant sabotage to prevent it from working for the purpose it was designed for - the general welfare.

          •  Love Stewart, but in the end he's just a comedian (4+ / 0-)

            I've noticed that Stewart is like so many liberal political comedians and talk show hosts in that he is awesome at lampooning the low hanging fruit of conservative craziness and politics, but he falters when things get complicated and messy. When that happens, they tend to flail around, taking pot shots in random directions.

            Stewart in particular seems to view the scene from an "everyman's" perspective and doesn't like to get into the little details. That's fine and necessary for a comic performer, but he also has centrist tendencies and not nearly enough cynicism, which leads to spectacles like this remarkably dismissive putdown of Krugman.

            "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

            by quill on Wed Jan 16, 2013 at 11:53:45 AM PST

            [ Parent ]

        •  Actually what gives money value... (2+ / 0-)
          Recommended by:
          LaEscapee, Calgacus

          is taxation and the productive capacity of the economy and workers producing hings for money to chase. Also money being a creation of the state like Keynes said in a Treatise on Money. Control fraud pumped up MBS like William K,. Black said beyond what prices had been for years as Dean baker and others pointed out. Belief has nothing to do with whether money is valuable or not. It is legal tender and accepted while being created by a keystroke and accepted. It's a measured unit of account like inches and not an object that can change shape because of belief or non belief where one has to go dig up all the gold at Fort Knox.

          And referencing the Daily Show which Paul Krugman rightly called out is weak.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Jan 16, 2013 at 11:22:08 AM PST

          [ Parent ]

          •  and yet there are plenty (0+ / 0-)

            of real world examples of money losing any real value, when they believe they money they have won't chase those goods and services, or lke the dog and the bus, even if it catches it, it won't be able to do anything with it.

            Ultimately, we know those little coins and bills we carry around can be useless to purchase anything of value.   Just look at the history of money in this country at various times.    
            Continental Congress paper money:


            Confederate notes suffered a similar fate.

            Most of us have seen the pictures of a wheelbarrow full of cash trundled down a German street following WWI.

            People still speculate in gold for a reason.

            I am not saying that is happening in the US or would, but I'm not just making things up when I point out minting a coin, or printing a bill and sticking some numbers on it does not give it value.

            •  You gotta get your history with apt examples (3+ / 0-)
              Recommended by:
              LaEscapee, TheMomCat, ek hornbeck

              that was before modern money, central banking or even Greenbacks which financed the civil war. People make this same excuse with a Robinson Crusoe scenario.

              Mots serious inflation episodes were on the supply side and had to do with oil shocks, and end to price controls after WWII, and the fluctuations after Bretton Woods ended or follow a destruction of productive capacity and owing debts denominated in other currencies.

              There's no reason to fear monger like this because there is plenty of products for the money to chase and idle capacity for workers to absorb it demand wise which doesn't apply to the dog metaphor at all because the government says it so and it's legal tender. Fiat money has raised living standards more than gold but it's surprising to hear you hint at a Ron Paul Austrian hyperinflation scenario.

              There's no evidence of that.

              I don't negotiate grand bargains with deficit terrorists!

              by priceman on Wed Jan 16, 2013 at 12:04:14 PM PST

              [ Parent ]

              •  I didn't say that (0+ / 0-)

                I didn't say that I disagreed with the modern theory.

                I merely pointed out creating money doens't automatically give it value.  The confederate money issue wasn't about inflation or price controls or oil shocks, it was a basic disbelief in the government's survival.  A much deeper problem.     A problem that I think will continue to fester and grow about our own government if in fact Congress can't muster up the votes for basic necessary legislation.    If people believe the government has failed, so has the government's money.If you look at Obama's current demands, and the Republican leaderships' recent concessions in that light, maybe it is possible you will at least consider that the coin isn't Obama's best choice for improving things right now, it really makes sense that he demand the government act as it ought.  Because it really absolutely fucking needs to if it is to remain viable.   I am not in the mood for the kind of disruption if the US falls apart right now, I don't think it will come out well for anyone in the short term, not the 1%, not for ordinary people.  

                •  confederate money and beliefs (1+ / 0-)
                  Recommended by:

                  The confederate money issue wasn't about inflation or price controls or oil shocks, it was a basic disbelief in the government's survival.  A much deeper problem.

                  Nope, that's just plain wrong. The confederate money issue was about inflation, which came from an inability to effectively tax. Considering the progress of the war, and their tax problems, it held up rather well imho until the end. Wray's 1998 book Understanding Modern Money has a good amount on it, based on Eugene Lerner's work.

                  The value of money is much less about misty beliefs and expectations than is often said- and much more about the very real and rational expectation of the inevitability of taxes.

            •  Whether you realize it or not (4+ / 0-)

              you just made the argument against austerity. What you are arguing is exactly what happened to Greece. Once the world was told their currency was worthless the wolves descended.

              The problem being that unless and until the world can be convinced that when America says they are good for their money, which is the only reason for this fake fight over the debt ceiling every country will trust that we pay our bills. It's written in law that we must, allowing some arbitrary entity to proclaim that "America aint good for it" as if we were attemting to buy a car is laughable.

              Name one country that is going to foreclose on our mortgage when their economy depends on ours and after you do that explain how our printing more fake money will be rejected by those same countries as worthless.

              There are no sacred cows.

              by LaEscapee on Wed Jan 16, 2013 at 12:06:40 PM PST

              [ Parent ]

              •  I was never arguing for austerity (0+ / 0-)

                I am pretty sure at this point, none of you have read a single thing I actually said, and you have no clue what I was arguing for or against.

                You keep arguing against whatever you want.  So keep doing it, hasn't convinced me that any of you even know what you are fighting for or against, except austerity!  Obama!  Bad Bad.  

                Stop reacting start looking at the bigger world and the way things are happening, not just nursing grievances because you're afraid someone is disagreeing with you.  

                I have never argued that the world will actually believe that we won't pay our bills, and they won't until we actually don't.   It is however an unsettling spectacle to watch the country so many depend on act like two year olds in a mud pie fight in the sand box.   That needs to stop.  Not with new laws, new ways of doing things, but the old fashioined way when responsible adults suck it up and act like responsible adults.  That is what Obama has demanded, it is what the public wants, and quite frankly, it will ultimately work better than PCS to end debt ceiling debates.

                •  I've read everything you wrote. (2+ / 0-)
                  Recommended by:
                  Nada Lemming, priceman

                  And it's mostly wrong.

                  I except the articles definite and indefinite.

                •  Actually (6+ / 0-)
                  I have never argued that the world will actually believe that we won't pay our bills, and they won't until we actually don't.
                  the world markets acted very negatively  in 2011 with the mere suggestion that the US would default in its debts. This time may be worse. We'll know as we get closer to actual default.

                  "There is but one evil party with two names, and it will be elected despite all I can do or say." W.E.B. Dubois, 1956

                  by TheMomCat on Wed Jan 16, 2013 at 01:59:10 PM PST

                  [ Parent ]

                  •  yes, but I don't actually believe (0+ / 0-)

                    that the markets thought we would default, but they did believe we were playing a gigantic game of chicken with everyone's welfare.   Other circumstances made it highly unlikely they could flee anywhere safer.

                    That is why I am arguing that this time on the debt ceiling issue Obama is right to demand a responsible vote, because we've already replayed the game too long, and this all needs to end because we got a responsible vote not some work around.  I think the political bone casting indicates we may get a clean vote.  

                    •  Funny, the markets reaction in 2011 belies (5+ / 0-)

                      what you think.

                      As for a clean bill, we shall see but I have good reason to doubt it.

                      "There is but one evil party with two names, and it will be elected despite all I can do or say." W.E.B. Dubois, 1956

                      by TheMomCat on Wed Jan 16, 2013 at 02:08:59 PM PST

                      [ Parent ]

                      •  Always helps to re read the contemporaneous news (1+ / 0-)
                        Recommended by:




                        this was within 7 days of the deadline, running right up on the date of the deal.  The markets reaction wasn't catastrophic, and most of what affected the market from Aug 1 on was bad news on actual economic measures, the economy was not recovering as expected and not just because of the debt ceiling debate.

                        Even after the credit down rating, not because of an actual default, but the game of chicken.


                        Speculation now is that the market will react worse this time and may react sooner.

                        I was reading it then, I'm reading on it now.  The world is still waiting for us to act like a super power, a responsible player in the world markets.  I can wait out the next six weeks, time always tells eventually.

                        •  Where did I say "catastrophic"? (3+ / 0-)
                          Recommended by:
                          gooderservice, Nada Lemming, priceman

                          Please refrain from hyperbole and "putting words in my mouth." The term was used by Fed chair Ben Bernake:

                          Federal Reserve Chairman Ben Bernanke said the fallout could be "catastrophic" and "self defeating."
                          I do read the "contemporary news" since I am in that .o1% bracket. So let's not get insulting.

                          The markets world wide were "spooking" about the point in early June to mid July when the talks broke down and around the downgrade of the US credit rating.

                          Negative Market Reaction to Debt Ceiling Fight

                          The best indication of all that the market has already started reacting negatively is the current trading of credit default swaps on U.S. debt. As of late May, the number of CDS contracts — essentially insurance policies on the possibility of a default — had risen by 82 percent. Equally as important, the cost of a CDS — the best indication of how much riskier U.S. debt has become — rose by more than 35 percent from April to May. Last week I spoke to a number of people who calculate such things for a living, and they said this change means that the interest rate the U.S. government has to pay has already increased by as much as 40 basis points compared with what it otherwise would be. This means higher federal borrowing costs and deficits, and overall higher interest rates on everything from car loans to mortgages to credit cards.
                          Washington Debt Ceiling Games Starting To Spook The Markets
                          The concern of the day is how international markets will react later today if there’s no concrete solution to the debt ceiling crisis, but it’s becoming clear that the sanguine approach that stock and bond markets have taken to these negotiations won’t last forever:
                          Global markets were poised on a knife’s edge Sunday as Washington remained locked in partisan battle over raising the nation’s debt ceiling, with no final deal in sight. [..]

                          Market analysts and Wall Street traders said a failure to reach a final deal on Sunday would not be catastrophic. But the lack of any concrete progress toward successful votes in both houses of Congress and a presidential signature this week could be very damaging and could lead ratings agencies to downgrade U.S. debt.

                          Mark Dow, a former Treasury official who now runs a hedge fund that invests based on large global economic trends, said a breakdown in talks would likely lead to a drop in the dollar, a further spike in gold—a perceived safe haven of value in times of trouble— and a modest decline in equity prices along with a small increase in Treasury bond yields.

                          World markets decline on debt impasse
                          Stocks around the world fell Monday, as markets reacted to news that congressional leaders and the Obama administration failed to reach agreement on a deal to raise the U.S. debt limit.

                          Tokyo's Nikkei 225 closed lower 0.8% at 10,050. In Hong Kong, the Hang Seng index lost 0.7%.

                          The Shanghai Composite index dropped a full 3%.  [..]

                          Meanwhile, trading in U.S. stock futures -- which indicates the likely direction when actual stock trading begin Monday morning -- were lower. S&P 500 (SPX), Nasdaq composite (COMP) and Dow Jones industrial average (INDU) futures were down a little less than 1%.

                          As it became clear that there was a resolution (aka, sequestration) the markets started to stabilize and rebound,.

                          "There is but one evil party with two names, and it will be elected despite all I can do or say." W.E.B. Dubois, 1956

                          by TheMomCat on Wed Jan 16, 2013 at 04:00:20 PM PST

                          [ Parent ]

                          •  I never said there was no effect (1+ / 0-)
                            Recommended by:

                            and there is still plenty of evidence that most of the effect was not a belief that the US government wouldn't reach a last minute compromise, but the real problems was willingness to engage in the fight, the game of chicken.

                            And after the announcement that the deal was reached, the markets went up, then down the same day based on the economic numbers, manufacturing report, etc, that showed a weaker than predicted recovery. And the continuing weakness of the overall economic recovery had more effect than the debt controversy on an ongoing basis on the markets.  

                            And now,  we are playing the game again.  And maybe even recession in the Eurozone won't save us from ourselves and the investors flee.   We'll see.

                •  Yep you are smarter than us (2+ / 0-)
                  Recommended by:
                  jellyyork, priceman

                  I actually can't believe you responded with this weak sauce.

                  "That is what Obama has demanded", are you kidding me?

                  I ask a new question... Name one time he has held the line and not offered concessions before negotiations began. Seriously, just once.

                  There are no sacred cows.

                  by LaEscapee on Wed Jan 16, 2013 at 03:59:17 PM PST

                  [ Parent ]

          •  Btw (4+ / 0-)
            Recommended by:
            ek hornbeck, TheMomCat, quill, priceman

            Bill Black, just supported the coin very strongly here, and here.

        •  So when (1+ / 0-)
          Recommended by:

          it comes down to it, getting laughs is what it's all about?  Wow!  Do you realize what you're saying?  It's absolutely true.  But do you really, really understand what you just said?

    •  The coin is only getting started. It is a MUCH (2+ / 0-)
      Recommended by:
      priceman, TheMomCat

      larger conversation and you need to learn more about it. Go here and here to get started.

      "When in doubt, do the brave thing." - Jan Smuts

      by bunnygirl60 on Wed Jan 16, 2013 at 12:07:34 PM PST

      [ Parent ]

    •  It's not magic (2+ / 0-)
      Recommended by:
      TheMomCat, priceman

      It forces the Fed to use its power to credit the Mint's account. That's not magic it's just harnessing what the Fed does to Treasury's purposes; See here.

      •  I think you misunderstood me (0+ / 0-)

        I was trying to be clever with my title about coin tricks...

        By "magic" I was actually referring to the way the public, punditocracy, etc can be tricked into focusing on the wrong issue (the debt ceiling fight), while the real robbery is going on somewhere else (the sequester negotiations).

        As for the coin, I'm all for it, though it seems like the idea's not going to get anywhere with this administration.

        "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

        by quill on Wed Jan 16, 2013 at 02:31:30 PM PST

        [ Parent ]

  •  well said. tipped, rec'd, signed (12+ / 0-)

    anything to get a breath of fresh air into this asinine debate about debt and the deficit.

    Ever notice how DC can't handle it when their debates cease to be hermetically sealed?

    if necessary for years; if necessary, alone

    by SouthernLiberalinMD on Wed Jan 16, 2013 at 08:56:22 AM PST

  •  So I take it you disagree (1+ / 0-)
    Recommended by:
    Deep Texan

    entirely with this assessment of where we're headed?

    I guess we'll find out in fairly short order who is correct.

  •  indeed (8+ / 0-)

    Obama could have given this speech in 2011 and completely avoided the whole debt ceiling showdown (which caused our AAA rating to be downgraded and the markets to shudder) and the whole "fiscal cliff" debacle.

    Why didn't he? Simple, because he wanted to slash the safety net and this was the only way it could be done--by manufacturing a state of perpetual crisis.

    This is a ridiculous idea that's being pushed on us by the WH and the media--that the Fed can unilaterally create and lend unlimited amounts of money to banks via QE (in a totally non-transparent and unaccountable fashion), but the US government cannot even create money merely to pay for spending that Congress has previously authorized by statute.

    In effect, it's saying that the banks, and not the federal government, possess the sovereign power to issue money--which goes against Article I of the Constitution.

    The Congress has the constitutional power to coin money and they long ago authorized the Treasury to exercise that power (Coinage Act, 1873). Unless Congress repeals that law, the Treasury still has that power.

    Once the Treasury mints the trillion dollar coin, it's legal tender--just like a dollar bill. If you question its value, then you're saying that the greenbacks in your wallet are worthless.

    The Fed cannot question the value of the coin either. They cannot pick and choose what money they will accept. If the government issues money, it's money, whether the Fed likes it or not.

    "In America, the law is king." --Thomas Paine

    by limpidglass on Wed Jan 16, 2013 at 09:14:15 AM PST

  •  Obama does not want an out. (5+ / 2-)

    But he lacks the balls to just say so.  If Obama should need to avoid default he has the means to justify doing so. He is still fishing for his grand bargain and his failure to get it in 2011, and the failure of his sequester and super committee to make it happen.

    Republican and Obama want entitlement cuts.  And both are willing to risk economic calamity to avoid being tagged with full responsibility for doing it. It was, and remains, about Obama's Grand Bargain.

  •  Rec'd for discussion, but... (5+ / 0-)

    The ceiling is mostly a dead issue now. Now that the Hastert rule is no longer absolute, the debt ceiling will be raised with bipartisan support.

    Wall St. and the rest of the 1% will see to that.

    The nihilist right will rant and threaten and oppose raising the ceiling without concessions on entitlements, but they can't derail this by themselves. If the Dems give anything in return for raising the ceiling, that's completely on them.

    When you triangulate everything, you can't even roll downhill...

    by PhilJD on Wed Jan 16, 2013 at 09:46:03 AM PST

    •  It's anything but a dead issue. Sorry (0+ / 0-)

      The Hastert rule means nothing here and hasn't been truly followed for awhile. let's talk about how the Byrd rule wasn't really followed when the Bush tax cuts should have have passed reconciliation in 2001 and only part of it when they were set to expire. That's kind of the same point which is a non point. The debt ceiling will be raised but not without painful cuts Dems will agree to if their President tells them to which is why we need to abandon it and make our deb payments in a better way.

      The debt ceiling can never be a non issue unless it goes away and that is what this diary is about. When it comes up again I'm sure I will hear about how it is a non issue and more and more cuts are on the chopping block but that's just not reality.

      Sorry, man. I disagree with you this time strongly.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 11:11:39 AM PST

      [ Parent ]

      •  We'll find out soon enough. (4+ / 0-)
        Recommended by:
        uffdalib, ek hornbeck, Calgacus, kalmoth

        I'll flatly predict a clean raising of the ceiling, with no concessions in return. If the Dems give anything for it, it will be a completely unforced error. Not that that is inconceivable.

        The fight to preserve the safety net will come during the sequestration discussions. The Dems have a strong hand there as well, but I doubt they'll play it, since they mostly love the Defense budget as much as any Thug.

        When you triangulate everything, you can't even roll downhill...

        by PhilJD on Wed Jan 16, 2013 at 11:56:19 AM PST

        [ Parent ]

    •  I agree that Rethug leaders will give... (0+ / 0-)

      Obama the debt ceiling raise in an ostensibly "clean" vote. But I think behind the scenes, there will be a separate agreement linked to the sequester/continuing resolution problems that provides the cuts to entitlements that both sides seem to want. The Hastert rule will be broken there too so the entitlement cuts will be mostly on the backs of Dems in the 2014 Rethug attack ads.

      Just another faggity fag socialist fuckstick homosinner!

      by Ian S on Wed Jan 16, 2013 at 12:37:45 PM PST

      [ Parent ]

  •  I don't get how they can approve spending and (3+ / 0-)
    Recommended by:
    priceman, ek hornbeck, PhilJD

    then think they can "limit the debt" which effectively cheats people out of money they already approved spending.

    This would be akin to a business setting up a budget for the year, ordering the goods and services in the budget, then not having the income to cover it and saying to all the creditors, "sorry, but we have a debt limit, so we aren't going to pay you."

    Debt isn't the issue. Income is. Get the f'ing rich people who get all that corporate welfare and all those government contracts to pay the bill.

  •  False (3+ / 5-)

    False title, false premise, false diary.

    Nothing in this diary even rises to the truth level of, "The liberals staying home caused the 2010 debacle." why is that statement automatically HRed while this tripe is allowed to pass?

    Don't ever think you can speak for me.

  •  Question (0+ / 0-)

    Why are the "progressives" so in favor of caving into the GOP by minting the coin? Gee, what a great idea, let's make sure that GOP threats will be dealt with by letting them have no real consequence.

    Spineless, lying hypocrites.

  •  Thanks priceman (6+ / 0-)

    Great diary. Glad to see it's getting a lot of interest. And very glad you're still backing the $60 T coin petition!

    On the question of whether the Fed can be forced to credit the platinum coin by the Treasury, beowulf has been heard from again in a brilliant post here. The comment thread is terrific. Philip Diehl doesn't think the Fed is forced to credit the coins and is arguing against it. But beowulf has laid out the case very well, continues to do so in the comments in a more and more decisive fashion; and I think I've got a pretty good comment reasoning that if the Fed had the power not to credit the coin it would be tantamount to its having the power to negate Congress's delegation of the power to coin money to the Mint and the Treasury. Philip hasn't answered that comment yet, nor has he answered beo's arguments satisfactorily, in my view. Phil's a good thinker and a very nice and rational man; but I don't think his arguments stack up to beo's.

    •  I was reading this (5+ / 0-)

      at Zero Hedge and came across this comment regarding Bernanke's rejecting the coin:

      What the Federal Reserve and Ben Bernanke think doesn't matter.  All that matters is what Obama wants to do and what SCOTUS thinks (if it came to that).  The law states that platinum coins are printed at the discretion the Treasury Secretary, and the Treasury Secretary answers to Obama.  If Obama wants the coin to be minted, it gets minted.  If not, it doesn't.  (As to who may or may not be pulling Obama's strings in such a decision, that's another whole subject area.) If it gets minted, it would appear the existing law makes it "legal tender for all debts, public and private".  Since the Fed is holding US debt, the Fed legally can not refuse to accept such coins in payment of that debt.  The only legal-approach-way for the Fed to reject the coin (and not face whatever "enforcement actions" Obama wishes to throw his way) would be to dispute the legal tender status of the coin, in which case this thing likely eventually ends up at SCOTUS for a decision.  The Fed, however, may be inclined to not take this to court, or if they do they will mysteriously leave the best legal argument against the coin out of their presentation.  And that best legal argument against the coin is that any law granting legal tender status to such a coin is unconstitutional. And that is because the states do not have the authority to make any money be legal tender except gold and silver, and the federal government does not have the authority to make any money be legal tender.  But the Fed can't make that argument, because if they win on that argument, the legal tender status of the Federal Reserve note will be effectively (if not explicitly) struck down by the same decision. (The other way for the Fed to avoid accepting such coins is to simply dump all of the treasuries they currently own on the open market.  It would not be the first time that a central bank retaliated against the government -- see 2nd central bank vs Andrew Jackson.)

      For those who haven't seen the law yet, it's Section (k) of 31 USC 5112:  "The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may prescribe from time to time."  Note that "specifications" (amount of platinum) and "denominations" (face value), as well as "quantitites" are all left up to "the Secretary" -- i.e., congress has already given the executive branch all the power it needs.

      emphasis mine

      "There is but one evil party with two names, and it will be elected despite all I can do or say." W.E.B. Dubois, 1956

      by TheMomCat on Wed Jan 16, 2013 at 03:03:13 PM PST

      [ Parent ]

    •  Thank you, Letsgetitdone (1+ / 0-)
      Recommended by:
      ek hornbeck

      I feel like I am banging my head against a wall, but the nap helped and this is important.

      That's disappointing about Philip Diehl(whom I respect liek you), but needless to say I think beowulf puts up the superior argument. And as you say what's to stop the Fed from taking away Congress's authority to coin money via Article 1 section 8 if that is true?

      Also I am glad I safely assumed I can quote you at length. Thank you again for that.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Jan 16, 2013 at 11:58:21 PM PST

      [ Parent ]

  •  I always thought you were in the angry & cynical (1+ / 0-)
    Recommended by:

    camp from the tone of a lot of your diaries.

    Funny Stuff at

    by poopdogcomedy on Wed Jan 16, 2013 at 02:35:17 PM PST

  •  Priceman thanks for a great diary (1+ / 0-)
    Recommended by:

    Above all, you are dead right about Obama. He'll have his Grand Bargain, come hell or high water.

  •  some of the support this diary attracts... (1+ / 0-)
    Recommended by:

    is pretty damning in its own stead.

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