Econintersect: Economist Warren Mosler has used some particularly depreciative language in his criticism of a bill introduced by U.S. Rep. Greg Walden (R-OR). Walden proposes to enact a law that would prohibit the issuance of trillion dollar platinum coins by the U.S. Department of the Treasury which would enable the payment of expenditures authorized by Congress without violating the national debt ceiling.
Mosler used the teminology that Walden's bill is a "mysteriously rushed contradiction wrapped in an enema…"
Wrting at the Mosler Economics web site, The Center of the Universe, Mosler wrote this:
More of the blind leading the blind. Either way Treasury only spends what’s authorized by Congress. And all the coin does is shift interest expense from the Treasury to the Fed.
Illogic is clearly a adaptive trait for holding office. As they say in Church, it’s another mysteriously rushed contradiction wrapped in an enema…
From Rep. Waldman's website:
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well. My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order,” Rep. Walden said.
Does Rep. Waldman seriously think there is any close correspondence between the running of a business and the running of a country sovereign in its own currency? If so should there be a criminal investigation of the congressman on suspicion of counterfeiting?
The answer to that rhetorical question is obvious: Rep Walden clearly doesn't believe he can print or coin money. His problem is that he doesn't understand that the U.S. does have the ability to create its own sovereign currency. The fact that this currency has been created by the government "borrowing it" from the banking system which then creates the extra money as bank credit at interest payable by the government is a choice that has been made by the government.
Warren Mosler succinctly observes that if the government were to create the money directly needed to pay the authorized expenditures that the only change from the current system would be that the banks would no longer receive interest on that same amount of money from the government. Now there is an "entitlement" that we could do without.
Is it time to wean the banks from the public teat?
- Greg Walden to introduce bill to stop U.S. Treasury from creating trillion dollar platinum coins (Warren Mosler, The Center of the Universe, 07 January 2013)
- Greg Walden plans to introduce bill to stop U.S. Treasury from creating trillion dollar platinum coins to pay bills and expand debt (U.S. Representative Greg Walden website, 07 January 2013)