Ezra Klein

If all those liberals who regret their support for the Iraq war seriously want to atone for it, there is something they could do. They could start exposing the lies about Iran. For the last 10 years we have been told that Iran is 2 years away from having a nuclear weapon.
,
Read below the fold...

This series provides a framing document for Platinum Coin Seigniorage (PCS). In the five previous parts of the series, I pointed out that there are three classes of opponents of High Value Platinum Coin Seigniorage (HVPCS, $30 T and above). The first and largest group opposes all Platinum Coin Seigniorage (PCS) of whatever type. Read below the fold...

This series provides a framing document for Platinum Coin Seigniorage (PCS). In the four previous parts of the series, I pointed out that there are three classes of opponents of High Value Platinum Coin Seigniorage (HVPCS, $30 T and above). The first and largest group opposes all Platinum Coin Seigniorage (PCS) of whatever type. The second, opposes HVPCS, but favors using the Trillion Dollar Coin (TDC) for the limited purpose of avoiding the debt ceiling. The third, opposes HVPCS, and doesn't really favor using the TDC either, except, perhaps, as a last resort to avoid the debt ceiling. It favors an incremental approach to PCS beginning perhaps in the millions or billions in face value, and over a long period of time, after giving people years to adjust to Treasury using platinum coins with unusual, and unprecedented, face values, eventually building up to a TDC.

Parts two, three, and four, and this post (Part Five), and the remaining post in this series considers further objections to HVPCS brought forward by people in one or more of these categories, and my replies to them. As you're seeing, if you're following the series, the opponents of HVPCS are throwing everything but the proverbial kitchen sink at it. In this post, I'll consider some objections to PCS and HVPCS based on their predicted institutional impact. Read below the fold...

A little disconnect: what President Obama, through Treasury and the Federal Reserve, really said last Saturday:

"We're running out of money because the Republican House may not allow us to float any more debt; so I took the Platinum Coin off the table just to ensure that we would!

Read below the fold...

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.

This statement from Ezra Klein would have us believe that the Federal Reserve is an independent agent in this matter, and that it can refuse to credit the deposit of a newly minted high face value proof platinum coin, if the Treasury makes such a deposit. It also assumes that if the Treasury insisted on the deposit of the coin, that the Fed would be in a position to go Court to contest that; that it has a choice in the matter.

I don't believe that either of these things are true. I also think they are just a rationalization, so the President, who most probably decided this can pretend that this decision isn't on him; or at least can be partially blamed on the Fed. Let's review some critical aspects of the relationship between the Fed and the Treasury. Read below the fold...

Here's a commentary on Ezra Klein's recent diatribe against Platinum Coin Seigniorage (PCS).

But there’s nothing benign about the platinum coin. It is a breakdown in the American system of governance, a symbol that we have become a banana republic. And perhaps we have. But the platinum coin is not the first cousin of cleanly raising the debt ceiling. It is the first cousin of defaulting on our debts. As with true default, it proves to the financial markets that we can no longer be trusted to manage our economic affairs predictably and rationally. It’s evidence that American politics has transitioned from dysfunctional to broken and that all manner of once-ludicrous outcomes have muscled their way into the realm of possibility. As with default, it will mean our borrowing costs rise and financial markets gradually lose trust in our system, though perhaps not with the disruptive panic that default would bring.

Name calling, labeling, and fear mongering aside, does Ezra understand the first thing about PCS? Does he know that if a $60 T coin were minted, and the Treasury General Account (TGA) filled with $60 T in electronic credits, the US would be able to just say goodbye to the international markets? If we were paying off the national debt as it fell due, we would not only not be defaulting, but would be paying all our creditors on time and in full, and without benefit of further debt instrument issuance. Nor would we care whether the markets trusted us or not; since we would not be borrowing money from them for the foreseeable future. So, how could our borrowing costs rise? Read below the fold...

This post concludes my critical evaluation of Dylan Matthews's, post published on Ezra Klein's blog called “You know the deficit hawks. Now meet the deficit owls.” Read below the fold...

This post continues my critical evaluation of Dylan Matthews's, post published on Ezra Klein's blog called “You know the deficit hawks. Now meet the deficit owls.”

Other Issues

Here's the next exchange envisioned by Dylan: Read below the fold...

This post continues the critical evaluation of Dylan Matthews's, post published on Ezra Klein's blog called “You know the deficit hawks. Now meet the deficit owls.”

The Inflation/Hyperinflation Bogeyman Read below the fold...

It was very welcome to see The Washington Post cover MMT with a reasonably favorable post by Dylan Matthews, published on Ezra Klein's blog called “You know the deficit hawks. Read below the fold...

So much of what I see in the MSM is the construction of narratives whose purpose is to direct our attention away from what is really going on, where the real problems are, and what real solutions might look like. A vital tool in this is the false metric. One of my favorites is the U-3 measure of unemployment which is currently 9.6%. Real un- and under employment is more than twice that. So just by making the U-3 the centerpiece of your narrative, you have already cut the problem in half. Then throw in a "natural" unemployment rate of 5% and you have cut the problem in half again. Read below the fold...

Ezra Klein did a piece yesterday offering the conventional deficit dove position on deficits and debt. Here's a commentary on it.

Gallup's survey of voter preferences for closing the entitlement gap is incomplete It suggests the options on entitlements are like a second-grade arithmetic problem: You can either add stuff (tax increases) or subtract stuff (benefit cuts). What's missing is the option you learn about in high school: growth.

Read below the fold...

An excerpt:

"What I always found so frustrating about Ezra - the tendency to repeat, as told to him, political sales jobs for the side he likes, and to rarely look too critically at them - has really only gotten worse. There's no attempt in what passes for "reporting" from him to relate the proposed "reform" scenarios to concrete realities of the current healthcare system, or challenging any of his scenarists

Read below the fold...

Ezra Klein

And all this elides a simple fact: Capping the employer health care exclusion is good policy. Eliminating it entirely would be better policy. It's true that some unions, like AFSCME, would see the value of their employer benefits degrade slightly. (Some unions, like Service Employees International Union, would scarcely be affected at all. Janitors are not, as a rule, given generous employer health benefits.) But the labor movement, as a whole, is much worse off in a world where the employer exclusion is capped but we have health reform than in a world where we don't have health care reform and can't control premium costs.

Read below the fold...

Blogger: Health care reform coalition faces tough battle

Q: Baucus has said a government single-payer or Medicare-for-all system of universal coverage is not an option for reform. Shouldn't a single-payer system be considered?

Read below the fold...