Trillion-dollar platinum coin rolls under a million-pound couch: Apparently, we can’t have nice things! As Paula Poundstone once said!
Just when we in the liberal world solve the impending debt limit crisis, the Treasury Department comes along and puts the squadoosh on the deal.
In this morning’s New York Times, Annie Lowrey explains what Treasury—and the White House—have said:
LOWREY (1/13/13): Treasury Won’t Mint Coin to Defy Debt CeilingCongress needs to do its job? So do we in the liberal world! In this case, that would entail some very basic political blocking and tackling:
The Treasury Department said Saturday that it will not mint a trillion-dollar platinum coin to head off an imminent battle with Congress over raising the government’s borrowing limit.
“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,” Anthony Coley, a Treasury spokesman, said in a written statement.
The Obama administration has indicated that the only way for the country to avoid a cash-management crisis as soon as next month is for Congress to raise the “debt ceiling,” which is the statutory limit on government borrowing. The cap is $16.4 trillion.
“There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default,” Jay Carney, the White House press secretary, said in a statement. “Congress needs to do its job.”
It would entail explaining the lunacy of the GOP’s threatened action to the American people. But rather than set ourselves to that task, our intellectual leaders have spent the past several weeks promoting the use of that magical coin.
Perhaps for the last time, we will promote our own take on this rather ridiculous matter:
We liberals don’t seem to know how to talk pork to the people! Often, this rather basic option doesn’t seem even to enter our heads.
The GOP’s threatened action is very dumb and very reckless. But it’s been a long time since the liberal world tried to explain such a fact to the public. It isn’t part of our DNA. It doesn’t seem to occur to our leaders that this is what we should do.
We have no forums for talking such talk. We have few leaders who occasion trust. We do like calling the people names.
North Dakota is part of the neo-Confederacy! Does advancing such claims really help?
At any rate, we don’t know how to talk to the people, even when the other side makes reckless, baldly inane proposals.
The other side knows how to mislead the people. Our side basically can’t do squat. Even when we're opposed by the one percent, the one percent comes out on top!
It's been this way for decades now. What makes us think we're so smart?
Bob says failing to raise the debt limit would be lunacy. That's missing the point. The Reps intend to raise the debt limit. They're using this threat in order to get the President and the Congress to deal with the government's unsustainable spending commitments.
ReplyDeleteYou mean "unsustainable spending commitments" like corporate welfare and military spending?
DeleteAt the current rate of growth, we're committed to tens of trillions of dollars of unfunded "Defense" spending -- if this sorry situation goes on long enough, "Defense" will exceed the entire federal budget, and there won't be a functioning country to defend!
Where in the world were we get that money, unless we impose austerity on the Pentagon this very minute?
You mean "unsustainable spending commitments" like corporate welfare and military spending?
DeleteYes. These are significant parts of the total federal spending. I'd like to start be cutting or eliminating farm payments to corporations and millionaires.
Bush tried and to end payments to farmers earning over $2 million per year, but Congress wouldn't go along with him. Obama and the Dems haven't even tried to do that much.
The whole "unsustainable commitments" thing's a canard.
DeleteFarm subsidies are a sideshow to the real money, of course. A laughable "start" from a laughable commenter.
THE long-term expense problem in this nation is health care spending. And it's a national social problem, not a government spending problem. Cutting government commitments there will only either shift costs to the public and sentence many to lack of real healthcare. Real solutions that address total national healthcare spending are sorely needed -- Sadly, the free-marketeers have nothing to offer.
Meanwhile, there's the immediate and near-term problem: We have a seriously depressed economy with GDP growth far too low and unemployment far too high.
A misguided focus on "the debt" and/or "the deficit" now is exactly what stopping us from focusing on those real immediate issues. And there's no evidence whatsoever that "the debt" or "the deficit" are in any way hampering the economy at present.
Bullshit artists (ably represented on this blog by David) will continue to try to point public attention in the wrong direction.
North Dakota is part of the neo-Confederacy? I grew up in North Dakota, and have lived in states that belonged to the old Confederacy. There is quite a difference between them.
ReplyDeleteDoesn't the Ryan plan raise the debt for the next 40 years? Reckless indeed. Republicans have no credibility whatsoever when it comes to fiscal matters. As Dick Cheney once famously said regarding his re-election head for the cliff, budget busting upper income tax break, "we owe it to ourselves".
ReplyDeleteI don't get it....How could Jay Carney have been any plainer and more convincing? I don't think the answer can involved explaining "default," because that path is both uncertain and complicated. If TDH has a preferred formulation of Obama's non-negotiable policy, it would be nice to see it.
ReplyDeleteWhile there was a great case to be made that the voting public was widely misinformed about the fiscal cliff by media sources that should have known better, the presentation of the debt ceiling issue has seemed pretty straightforward.
... it's a charade and arguing over how well it's played seems pointless. Our national debt is down the list of concerns a ways. IMHO this country is too corrupt, on many levels, to deliberately fix itself. Glad to be wrong ... the world has absolutely no problem buying our debt. In fact, they are glad to because it's better than gold and they know it, even if the common American doesn't. Putting people back to work would diminish many of our current ills considerably ...
ReplyDeleteYes, at the moment, the world has no problem buying our debt. But, we're not asking the world to buy our entire debt. Via monetary easing, we're printing money to buy a substantial share of our debt. I'm not sure what the exact figure is. One report said around $50 billion per month. Another said arouund $80 billion per month.
DeleteWe can't keep printing large amounts of money forever. There are hints that the program will end later this year. When the monetary easing ends, will the world be willing and able to buy a much larger amount of US debt? Who knows?
There have been rumblings of discontent. In 2011 China, our biggest creditor, publicly complained about our "addiction to debt":
China, the largest foreign holder of U.S. debt, demanded Saturday that America tighten its belt and confront its "addiction to debts" in the wake of Standard & Poor's decision to downgrade the U.S. credit rating.
China currently owns $1.2 trillion of U.S. Treasury debt, the largest stake of any central bank. The commentary carried by the state-run Xinhua News Agency was Beijing's first official response to the S&P decision.
"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua said.
It said the rating cut would be followed by more "devastating credit rating cuts" and global financial turbulence if the U.S. fails to learn to "live within its means."
"China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets," it said.
http://www.huffingtonpost.com/2011/08/06/china-blasts-us-over-cred_n_920094.html
Well, no, China does not have the right to demand any particular US fiscal policy. It's not like buying shares in a company and electing representatives to the board...I'm pretty sure they know that.
DeleteChina can stop buying US debt, but how will they run a trade surplus with the US while holding their currency at a nearly constant exchange rate against the USD without holding US assets? It's not a credible threat...
Yup, Anon 11:33 -- But David doesn't care about that. His M.O. is to deposit a reeking coil of crap in a comment thread and then run away from the cleanup crew.
DeleteIt's just not David's style to acknowledging the correction of his errors, lies and phony assumptions.
According to this 2009 article, China held $1.2 trillion of US debt. This 2012 article says China held $1.16 trillion of US debt. So, apparantly, China is rollling over the US debt it holds, but not increasing that amount. So, they might not be a market for an increased borrowing $700 billion -- $1 trillion per year. That's the amount we will need when we end the quantitative easing.
DeleteThe world's a big place...If China prefers to hold some Indian paper or maybe Mexican bonds with a sweet yield, then good luck to 'em.
DeleteAnd even though Japan owns nearly as much US debt as China does, they do not get to set our fiscal policy either...nor the monetary policy...bummer for them. Not even the Middle Eastern holders of US bonds get to set tax rates or Medicare policy. Crazy, but true.
Hey, Anonymous of 11:33 AM--
DeleteYou notice have David "answered" your comment?
Yup, by completely ignoring the substantial criticism of his position.
"China can stop buying US debt, but how will they run a trade surplus with the US while holding their currency at a nearly constant exchange rate against the USD without holding US assets?"
David, ohhhh David.....
Uh, AnonymousJanuary 14, 2013 at 5:26 PM, the argument that China must buy increasing amounts of US debt is based on theory. And, China's actual behavior over the last 3 years refutes the theory.
DeleteWhat I showed was that China has already stopped buying additional amounts of US debt. They're just rolling over the amount they had in 2009.