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fiscal myths

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Some Platinum Coin Objections from the Mainstream: Part V

This is Part V, and the conclusion, of the series providing my reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model.

In Part II I continued with a discussion of political legitimacy and usurpation issues and then covered some legal objections to using the $100 T platinum coin option related to the “intent” of the coin law. In Part III, I discussed a legal objection based on Wallach’s view of the intent of the coin law, which quickly morphed into a political objection about the desirability of mutual respect and comity among the three branches of government, as well as the threat to political legitimacy arising from the judgment that the platinum coin option is really “weird.” Read more about Some Platinum Coin Objections from the Mainstream: Part V

letsgetitdone's picture

Some Platinum Coin Objections from the Mainstream: Part IV

This is Part IV of my reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model.

In Part II I continued with a discussion of political legitimacy and usurpation issues and then covered some legal objections to using the $100 T platinum coin option related to the “intent” of the coin law. In Part III I discussed a legal objection based on Wallach’s view of the intent of the coin law, which quickly morphed into a political objection about the desirability of mutual respect and comity among the three branches of government, as well as the threat to political legitimacy arising from the judgment that the platinum coin option is really “weird.”

In this, Part IV, I’ll continue discussing the “weirdness” objection, and also cover Wallach’s views on Inflation and hyper-inflation, and Modern Money Theory. Read more about Some Platinum Coin Objections from the Mainstream: Part IV

letsgetitdone's picture

Some Platinum Coin Objections from the Mainstream: Part III

This is Part III of my lengthy reply to Philip Wallach’s reply to my evaluation of his views on the platinum coin proposal and other options for settling debt ceiling conflicts. In Part I I discussed some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model. In Part II I continued with a discussion of political legitimacy and usurpation issues and then covered some legal objections to using the $100 T platinum coin option related to the “intent” of the coin law.

In this installment I’ll continue with more discussion of political objections. Read more about Some Platinum Coin Objections from the Mainstream: Part III

letsgetitdone's picture

Some Platinum Coin Objections from the Mainstream: Part II

I began a lengthy critical reply to Philip Wallach’s reply to my earlier analysis of his paper in Part I of this series. There I covered some preliminary mis-characterizations of what I said and, more importantly, why the commonly recognized fiscal policy rule that, at least over a number of years, government revenues ought to match government spending is fiscally unsustainable and fiscally irresponsible in light of deductions from the Sectoral Financial Balances (SFB) model. In this Part II, I’ll cover some conjectures about political legitimacy Wallach offers about the consequences of minting a $100 T, some legal legitimacy issues, and some additional political legitimacy issues. Read more about Some Platinum Coin Objections from the Mainstream: Part II

letsgetitdone's picture

Some Platinum Coin Objections from the Mainstream: Part I

As I was working my way through the series of posts beginning with this one, news was announced that Republican and Democratic Party leaders in Congress, along with the President had come to agreement on the terms of ending the debt ceiling standoff in the context of a new budget deal. Their agreement provides for suspension of the debt ceiling until March of 2017; so the immediate need to turn to unusual solutions to a pending debt ceiling crisis is now gone, and, along with it, crisis-driven discussions about the platinum coin option.

Nevertheless, even though the immediate reason motivating renewed discussions of the platinum coin option is now gone, I still have some unfinished business dealing with the issues surrounding it. Late last week I replied to a paper from Philip Wallach of The Brookings Institution with a post at Naked Capitalism, as well as a number of other sites in the blogosphere. Now, Wallach has replied to my post, which mostly presents new arguments not in his original paper. Read more about Some Platinum Coin Objections from the Mainstream: Part I

letsgetitdone's picture

The Platinum Coin Returns

Upon my oath, I didn't intend to bring back the coin proposal until much later in the re-newed process of Republican hostage-taking over the debt ceiling. After all, there's not much chance that the President would ever use the platinum coin option, because his budget policy direction of getting ever closer to a budget surplus, is best served by a “forced” compromise with the Republicans, that results in another few hundred billion in spending cuts for 2016, while allowing him to place the blame on them for that outcome. Using the platinum coin option would not have that result, because it would deliver a clear victory to him.

Of course, he doesn't want a default due to Republican brinksmanship either, so if the Republicans do drag everyone too close to the cliff, then he may decide to take some extraordinary measures and the coin is one that is available, so it's conceivable that he might choose this undoubtedly, from his point of view, distasteful option. It is for this reason, I suppose, that the Brookings Institution is warning him off the coin to weight his choice towards some more conventional approach. Read more about The Platinum Coin Returns

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The Simplest and Best Way Out

Well, the proverbial s__t is now hitting the fan in our State Governments, and we're looking at struggles in State after State between newly elected Republican Governors scapegoating civil servants, while they insist that taxes can't be raised on the wealthy and large corporations during a recession. Put briefly, the moves to austerity and the resulting conflicts in Wisconsin and other States are partly Democrats' fault, because they failed to pass a State revenue sharing bill to close the gap in State budgets, so that no cuts in services, employee benefits, or jobs would be necessary. Read more about The Simplest and Best Way Out

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