deficit spending

(Thanks to DailyKos commenter 2laneIA for suggesting this post and the title)

It's only a few days now until August 2nd. Perhaps a compromise on lifting the debt ceiling will be reached before then. Perhaps none will be reached. Perhaps the President will veto a compromise if it doesn't extend the ceiling sufficiently to support deficit spending until after the 2012 elections. If a debt ceiling extension is voted down, or if the President vetos an unacceptably small extension, then what is to be done? I've now run into six primary options the President can select among to avoid default. The six are:

-- Challenging the debt ceiling based on the 14th Amendment Section 4
-- Selective default
-- Proof Platinum Coin Seigniorage (PPCS)
-- Running an overdraft at the Fed Read below the fold...

[Welcome, Naked Capitalism readers! --lambert] Read below the fold...

Dear Dems and Mr. President,

I've been a lifelong Democrat. But now, I don't know anymore. I'm still registered alright; but when I look at your behavior, I think I'm a freely floating voter resource now, and I'd probably respond to a poll as one in that amorphous blob of independents that stands for “the two parties suck; but we don't agree on much else.” I'm sorry about that. I really had high hopes after the 2008 election, that a new period of Democratic resurgence had come, and that the Reagan era had ended. Read below the fold...

Congress provided the authority, in legislation passed in 1996, for the US Mint to create platinum bullion or proof platinum coins with arbitrary fiat face value having no relationship to the value of the platinum used in these coins. These coins are legal tender. So, when the Mint deposits them in its Public Enterprise Fund account at the Fed, the Fed must credit that account with the face value of these coins. Read below the fold...

[Cross-posted under a different title at Naked Capitalism -- lambert]

(Author's Note; Many thanks to lambert strether, beowulf, and Yves Smith for their reviews of this post) Read below the fold...

I've written a lot about jumbo coin seigniorage as a way of getting around the debt ceiling problem over the past 7 months, and others here, Read below the fold...

Today, the MSM noticed that there's an issue of constitutionality related to the debt ceiling. Ryan Grim and Samuel Haass report that some Democratic Senators, including Chris Coons and Patty Murray, have begun to discuss. Read below the fold...

In a comment on another post of mine, Kelly Canfield, a blogger and commenter at FDL, asked me for the following.

What I would appreciate is a simple, 3,4 bullet point method as to why I should support, and more importantly, tell others that MMT is superior to the Keynes theories which I have pointed out and illustrated to others before this current situation.

I can easily explain that the private sector is not providing demand, and that the Fed sector should, and people would be better off with demand stimulus.

Explain to me how I EXPLAIN that MMT is superior to that basic premise, if it is?

Not sure I want to do that in three or 4 bullet points. But what I will do is to state what I think are some differences that are very significant for policy activism between a Keynesian approach employed by people like Paul Krugman, Brad DeLong, and Robert Reich and a Modern Monetary Theory (MMT) approach employed by people like Warren Mosler, L. Randall Wray, Bill Mitchell, Jamie Galbraith, Stephanie Kelton, Marshall Auerback, Scott Fullwiler, and Pavlina Tcherneva. So, here are some contrasts between the two approaches on seven important issues. Out of these contrasts, there should be much material for short explanations about why MMT is superior to Keynesian approaches. [Readers? -- lambert] Read below the fold...

Today, Fred Griesbach, AARP Campaigns sent me one of those unsolicited e-mails telling me all about AARP's wonderful work in defending Social Security and Medicare, and then asking me for a donation, so they could continue working their magic. Here's my reply.

Dear Fred,

I know about AARP's willingness to compromise on Medicare and Social Security for the sake of deficit reduction, and I'm Mad As Hell About it! Read below the fold...

If you're a progressive and want to fix problems like unemployment, the health care and health insurance systems, infrastructure, education, our energy and climate crises and want Government to deficit spend to do it, sooner of later you'll get the question: “Aren't you just 'printing money'? Here's my answer to that one.

No!

Because:

1) Today the Government prints very little money. It mostly just “marks up accounts” using a computer when the Treasury spends, or when the Fed buys financial assets, in return for reserves it creates. So, literally, I'm not saying we should “print money,” I'm saying we should deficit spend by “marking up” non-Government accounts. Read below the fold...

Here's Part Two of my textual analysis of the deficit reduction portion of Paul Ryan's Republican response to the SOTU.

Then the President and his party made matters even worse, by creating a new open-ended health care entitlement.

What we already know about the President’s health care law is this: Costs are going up, premiums are rising, and millions of people will lose the coverage they currently have. Job creation is being stifled by all of its taxes, penalties, mandates and fees.

Read below the fold...

Many of my recent posts have focused on fairy tales I thought the President would tell in the SOTU and also those that he did tell. The reason for this is that I think people on the left have a greater need to be informed about Obama's fairy tales, then they do about Republican fairy tales, since they are automatically skeptical about what Republicans say given their 40 year history of systematically lying about reality every chance they get. Read below the fold...

Yesterday, I scored the SOTU on the 7 Fairy Tales I discussed previously, and concluded that the President was subscribing to at most two of them, and that he accepted the deficit reduction framing of the Republicans as a basis for negotiation, and was trying to point the US in the same direction as export-led economies emphasizing fiscal austerity, thus joining the world's race to bottom. Today, I want to analyze the details of the portion of the SOTU dealing with deficit reduction. The President said: Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President would probably deliver in his State of the Union Address. And in a series of later posts, I looked at 7 fairy tales I thought he would tell. Finally, in a summary post, I offered a table summarizing the fairy tales and corresponding truths. In this post, I'll do a post-mortem. How many of the 7 fairy tales did he tell us? Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President will probably deliver in his State of the Union Address next month. I view the coming narrative as very likely to be composed of a number of fairy tales. In previous posts in this series I've analyzed and critiqued seven of the fairy tales I expect the President to tell us in his coming State of the Union speech. Read below the fold...