Corrente

If you have "no place to go," come here!

The $60 Trillion Petition for Taking Austerity Off The Table

letsgetitdone's picture

I have a petition to President Obama up here. It's about minting that $60 T coin and ending austerity. The wording of the petition is:

”A 1996 law gives the Executive Authority to mint coins w/arbitrarily large face values and deposit them at the Fed. The President should immediately mint a $60 Trillion coin, and use the proceeds to pay off the national debt completely, cover all likely deficit spending by Congress over the next 15 years, and take the issue of spending cuts in programs that benefit the 99% off the table! Google "$60 Trillion coin" for background!”

The purpose is:

“Ending the emphasis in Congress on deficit reduction rather than the merits of policy proposals to create full employment, Medicare for All, & rebuilding education, US infrastructure, & energy foundations.”

A $60 Trillion Proof Platinum Coin could close the spending/revenue gap entirely in any fiscal year, and technically end deficit spending, while still retaining the gap between tax revenues and spending that can produce full employment. In addition, profits from the coin could be used to pay off the “national debt,” and would also remove the need to issue any more public debt in coordination with deficit spending for at least 15 years.

However, a $60 T coin is not only a solution for ending public debt, it also has the potential to take off the legislative/fiscal table the whole austerity mind set that bedevils our current budgetary process and provides it with a constraining conservative cast focused on narrow monetary costs considerations, rather than a broader progressive framework that weighs the real costs and benefits of proposed fiscal activities of the Federal Government.

The $60 T coin can free the Government from narrow green eye shade concerns and force both Congress and the Executive to evaluate the substance of legislative proposals based on their likely direct impacts and side effects on the lives of Americans, rather than their impact on Federal deficits and surpluses.

For example, currently we see before us proposals to drastically reduce the USPS in size after years of reduction in service and personnel and also proposals to cut already austere, by modern industrial nation standards, Social Security and Medicare programs, as well as massive spending cuts in other entitlement and discretionary programs. Why are we seeing these proposals? Would we be seeing these proposals if we were rapidly paying off the debt and we also had $ 44 Trillion in the Treasury General Account to be used for future deficit spending?

We're seeing them now because of the effectiveness of a 35 year propaganda effort by deficit and debt hawks who have persuaded many Americans that the government is like a household which has enormous debt that will be burdensome to pay back. This view is false. But we can't educate people about this in the near term. We can't counter the deficit hawk propaganda with our own messages about the complex facts of government finance.

On the other hand, if we mint that $60 T coin, pay off the debt, and still have $44 T left in the TGA, then all the effects of the 35 year propaganda campaign will immediately go away. The debt will just no longer be an issue. Then the issues will be about what people need, and what improvements we can make by working together through our Federal Government.

That gets to be the fulcrum of the new politics, not debt. I think that's where we want it to be. If you agree, you'll follow the link above and sign my petition!

If you need more background to make a decision see here and here. But please consider this. I have only 5 signatures so far and I need 50 to get to the next stage of the petition process. So, if you really want to end austerity, then let's get this over the first hurdle and let's see how far we can take it into the public's consciousness.

0
No votes yet

Comments

chezmadame's picture
Submitted by chezmadame on

a lot more than I comment, mostly because politically and economically, I consider myself to be much more a student than a teacher.

I think that to people like me (true economic laymen), this idea sounds bogus, almost like you're just manufacturing a whole bunch of phony money that isn't there.

Believe me, I'm not saying this is the case. I'm just saying that I don't understand.

I also think that if the idea is to gain any traction with regular people, the concept that this is not phony money has to be explained better.

twig's picture
Submitted by twig on

If it's in the post, I'm not seeing it. Halp!!

"Look deep into nature, and then you will understand everything better." -- Albert Einstein

letsgetitdone's picture
Submitted by letsgetitdone on

Thanks twig. For some reason the bare link wasn't published and I missed it proofing.

letsgetitdone's picture
Submitted by letsgetitdone on

Hi chezmadame, The background links I provided above explain things in detail. I didn't want to do that here, for fear of losing the main message in a long post. Put briefly, however, all money created in the US is fiat money, including all bank reserves. It isn't backed by anything except the authority of the US government, the strength of the US economy and the willingness of people to accept the money.

So, in a sense, all of our money is "phony money," in that it is fiat money. The money (bank reserves) ultimately resulting from the coin would be the same as any previously existing money, with the same degree of legitimacy.

I know you're probably worried about inflation resulting for creating this money. But remember, the part of it used to repay debt involves a swap of debt instruments totaling roughly $16 T for the $16 T in money no new net assets change hands except the interest costs, which are a small proportion of the whole. The other $44 T will only be spent as Congress appropriates it. As long as Congress doesn't spend beyond full employment, the gradual spending of that money over 15 years won't cause demand pull inflation, and won't create any more de-evaluation of the currency than we normally see.

chezmadame's picture
Submitted by chezmadame on

and this would simply be a legal and logical extension of that construct? Is it also fair to say that this wouldn't hurt everyday folk because the money isn't really entering into general circulation?

Also....what if many countries did a similar minting?

And finally, why aren't more experts at least talking about the idea? Is there a vested interest in keeping this quiet?

Thanks for explaining. I've read your links, but I know I still don't quite get it.

I always read your posts on the topic and am intrigued.

Clonal Antibody's picture
Submitted by Clonal Antibody on

Its own fiat currency and runs a budget deficit does this. US, UK, Canada, Japan, China, India to name a few. Historically no government runs a surplus for any length of time. To do so invites an economic recession.

The reason for the debt ceiling act are historical, dating back to WW-I, the "Great War" when the US was still on a "gold standard". The need for such a law went awy in 1933 when the US went off the gold standard domestically and again in 1971 when Nixon closed the "gold window."

The debt ceiling and the budget deficit are now used as a political weapon by both parties to crush the common people.

Submitted by Hugh on

Money is simply a medium for distributing resources in a society. We decide we want a certain kind of society, spending, taxing, and regulation are the means we use via government to create that society. It can be a fair and just society with mild wealth inequalities or it can be the current kleptocracy with its extreme inequality. Once you understand that spending and taxing are just ways of moving resources around, it is easy to see why huge wealth tied up in the hands of a few are a bad idea for a just and fair society. It represents large amounts of resources that are now unavailable to the rest of society. We have concrete examples of this in our decaying infrastructure, failing schools, poor healthcare, and flat wages. We have the resources. They just are not going where they are needed.

Also if you take a resource viewpoint, you can see why taxing and spending aren't really about bookkeeping, that is money coming in should equal money going out. Money is not resources. It gives access to resources. Taxing takes money away from X. Spending sends it to Y. They don't have to equal each other. They are just two different ways of shifting access to resources around to create the society its members want. As long as the resources are getting to where they are needed, the standard bookkeeping identities we have all been indoctrinated with don't matter very much, if at all.

Going back to the post's topic, all the $60 T coin would do is remove one pseudo-constraint/rationale on government spending (running deficits) and remove a subsidy program for banks and the rich (interest paid on the national debt).

The $60 T coin would not change otherwise how the government (and the Fed) direct money away from the middle class to the rich and the banks, the first through its powers of taxing, spending, and regulation and the second through its monetary policy. The coin would not alleviate the high levels of debt that so many ordinary Americans suffer under. It would just eliminate the current bogus and class oriented arguments for austerity, that is slashing the social safety net and selling off the commons.

Hugh

Anthony_JKenn's picture
Submitted by Anthony_JKenn on

Hey again, LGID....I had originally posted on the PCS idea at my Inventing The American Left blog in 2011, and I'm encouraged to see that it's on the upswing again today.  I just posted an update earlier this morning on your idea of using PCS to blow up the debt ceiling debate; you can read and comment about it here:

Platinum Coin Seigniorage Redux: The Possible Game Changing Blockbuster For The Left In "Debtcopalypse, Part Deux"?? -- Inventing The American Left

I also signed the petition to get the conversation going, too.

I do have some minor hesitations about going all-in with PCS as a stand alone vehicle for reviving the Social Welfare/Full Employment state, which I will develop further in my blog. But, those are minor as compared to the positive potential to absolutely bust through the straitjacket of constraints that right now buries the Left between TeaPub fascism and DLC/Third Way/Fix The Debt miserliness.

Note that I'm just a working class layman, not an economist, and my motivation is merely to educate myself in alternative progressive economic theory and break through the "legacy party" vise. I welcome any and all educating you may offer...and reserve my right to respectfully challenge you on some matters as well.

Flip the switch, as they say, and let's talk about and do this.

 

Anthony

insanelysane's picture
Submitted by insanelysane on

Where the heck is Plantidotes? I need my morning eye opening color picture of something beautiful.

Submitted by lambert on

nt

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

Submitted by chadwick newsome on

Could some medium or other show us what austerity would like from the point of view of, say, Joe-the-actual-plumber, or some such hypothetical average American? And what it would look like to, say, Jamie Dimon, or some other non-average American? How would a day in the life of each be altered by proposed austerity measures? I mean, if we are to have shared sacrifice, shouldn't we know, with full particulars, exatly what that would mean? For our lives?

Chad Newsome

Alexa's picture
Submitted by Alexa on

Lets--

Have had to take up "tweeting" recently, so I'll try to put it to some use tonight, if I can Tweet it from here.

I've seen it all over Twitter, and actually received a "Retweet" of yours, yesterday. (Don't remember who originated it, though). Seems like is was an "older" blog that you wrote on the Platinum Coin.

Anyway, you've got to be on to something. It's spreading like wildfire!

Keep up the good work. You might be the one who saves us from 'austerity.'

Alexa

“If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

[Avatar Photo Credit: Conflagrate, jurvetson's photostream, flickr]