The elephant and jackass corporate duopoly in Congress are at it again. They are, for the gazillionth time, playing a dangerous game of "chicken" with the "debt ceiling" and therefore with the economy. Even merely hinting that the US government might default on its obligations is enough to cause real and broad economic damage. And to add insult to injury, they also risk a government shutdown at the same time. And to them we say, KNOCK IT OFF! Yesterday!
We are officially being "governed" by overgrown children now, it seems. In both parties, no less.
Not only is it a stupid and dangerous game to play, but it is 100% unnecessary. The USA is the only country on Earth that has a separate vote for the debt ceiling and the budget, and one of only two countries that even has a formal "debt ceiling" at all. And being Monetarily Sovereign, the USA would only default on the debt if it wanted to, since they could literally just print (or keystroke) the money. Really. (Just like that "gaffe" that Trump made back in 2016.) And even the "debt" itself isn't really debt like occurs in the private sector or households--it is literally nothing more than deposits in Treasury security accounts, which are functionally equivalent to glorified savings accounts for investors. That's it. Otherwise, they simply keystroke money into existence every time they pay a bill, all while pretending otherwise of course.
And only due to arcane and archaic rules left over from the now-defunct gold standard (that functionally ended on August 15, 1971), which no longer make sense, is there any reason for this sort of utterly pointless dog and pony show, which means there really are only political reasons for it. Which thus means there are no good reasons for it. All they have to do is add the following text to any budget appropriations bill, per Dr. Joseph M. Firestone:
Paging Dr. Firestone indeed! That would render "teh debt" a non-problem overnight. And if Congress won't do that, the White House can always simply direct the US Treasury to #MintTheCoin. Due to a little-known loophole in the law, the US Mint is allowed to mint platinum coins in literally ANY denomination as legal tender. That means they can mint a trillion-dollar coin, or even a $100 trillion coin for that matter, and use such seigniorage as revenue to pay any bills. The current White House, however, does not seem to be even the least bit interested in doing so, alas.
The US Constitution makes it crystal clear that the government must never call the public debt into question. So what are we waiting for?
UPDATE: The predictable howling about how the platinum coin loophole doesn't really exist (and that using the face value of such a coin as revenue is somehow technically illegal) is back again, and it is neither true nor necessarily in good faith. This particular criticism appears to hinge entirely on the technical legal definition of "bullion coin" and the relative lack of precedent, but that doesn't mean it is necessary illegal. Simply call it a "proof coin", and the face value is valid regardless of the value of the metal used to make it. And the Federal Reserve would have no choice but to accept it as legal tender when deposited at the New York Fed, and thus fill the Treasury's own spending account there with the equivalent amount of paper/electronic dollars of revenue for spending. Problem solved. Next.
By the way, if the loophole doesn't really exist, then why did Republican Senator Mike Lee introduce a bill explicitly to close that very same loophole?
Even failing that, other things the President can do is invoke the 14th Amendment to nullify the debt ceiling, issue a new and special kind of bond to make an end-run around the debt ceiling, or even simply issue more debt in the short-term interim as the "least illegal" option under the Constitution, as the Constitution clearly prohibits defaulting on the debt.
In other words, President Biden can end this madness all by himself if he wanted. So what is he waiting for?
The blind leading the blind. Or are they doing this on purpose? Sinister. The lunatics running the asylum.
ReplyDeleteSo very true indeed, alas. Probably a bit of both, some deliberately and some ignorantly and negligently. Either way, it is not good!
DeleteThis is an example of supposed American exceptionally. The U.S. is one only a few countries in the world which has a separate vote for a debt ceiling and the budget. Both political parties, very much deluded by American exceptionalism, believe that the U.S. is not a Monetarily Sovereign country. This is what causes government shutdowns every few years. I doubt that the U.S. will follow the policies outlined in this article because our country is resistant to change when it comes to many things.
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