#NewClotheslineDeal
Jack Balkin, the Knight Professor of Constitutional Law and the First Amendment at Yale Law School, suggests two other ways to solve the debt ceiling crisis: he points out that the US Treasury has the power to issue platinum coins in any denomination, so it could solve the debt ceiling crisis by simply issuing two platinum coins in denominations of one trillion dollars each, depositing them into its account in the Federal Reserve, and writing checks on the proceeds. Another way to solve the debt ceiling crisis, Balkin suggests, would be for the Federal Government to sell the Federal Reserve an option to purchase government property for $2 trillion. The Fed would then credit the proceeds to the government's checking account. Once Congress lifts the debt ceiling, the president could buy back the option for a dollar, or the option could simply expire in 90 days.In economic theory, from what I gather reading occasional articles on Wikipedia, there's a thing called the “Diamond-water paradox.” So, why do we pretend diamonds are so valuable, and water so cheap, when water is vital to life and diamonds are just pretty rocks? The idea of minting platinum coins and claiming they are now money isn't any less fantastic than saying a fancy diamond, that you can't use for anything but a decoration or an item for sale, is worth several thousand dollars.
--- Wikipedia, 2011 US Debt Ceiling Crisis, from “ Three Ways Obama Can Bypass Congress — Jack Balkin — CNN Opinion July 28, 2011:”. Cnn.com. 2011-07-28. Retrieved 2011-08-01.
If you want to look at the marginal utility of those platinum coins... Seems to me that the money they represent could sure eliminate the national debt crisis, since the U.S. Mint could, hypothetically, simply make more of them to pay off all of the government's loans... but it could perhaps be successfully argued, in a forum free of coercion and information control, that paying the national debt with it would perhaps actually give it negative value. Consider what amount of the money got borrowed to pay for: wars of aggression to obtain control of petroleum producing regions, for instants, improving our national security by sending tortured and tormented young men, who have been encouraged and trained to be armed and dangerous, out of the country where they can't harm anyone here at home... So these youngsters are being trained to be soldiers, rather than organic farmers, construction workers, or electrical and railroad engineers. Good plan? What will be their future economic value? Will it be positive or negative?
Spending that money to pay for those actions is likely what has reduced America's credit rating. Would you loan money to a country that uses it to send a well organized force of armed and dangerous "heros" to steal control of a toxic substance that they then ship "home" to pollute the air and water with? But we know that money "loaned" isn't real; it's just bits in computers. Don't harbor the illusion any longer that money is really anything but what and who gets brought home with it...
Even more importantly, given that money isn't real unless it's putting food on our plates, the value of those coins is the value of the things that money can buy or pay for, like materials and labor to construct the necessary aerogenerator, smart-grid, and electric train rail infrastructure to move America away from fossil fuel dependence.
So, perhaps loaning money and charging interest for that service and the use of that money essentially creates money out of thin air, in some sense, right? (Well, at least if that interest is always paid on time.) Then if the debt's not paid, and the creditor defaults, the credit company can sell it to a debt collector, potentially for more than the original principal, since the interest makes it look like a lot more than they actually lent to begin with. It's like that old scam from back in the day when it took more than a week for a check to get through the clearinghouse, called “kiting checks,”. The fraud artist would open a bank account with a small amount of money, and then write a check from it to open an account in another bank. That check would overdraw the first account, but not if they wrote a check from the second bank to cover it... And then one from the first bank to cover that... Abracadabra! All-Kite-Ah! It amounted to the creation of money out of thin air that could be spent on anything yous want.
According to a show I watched once on The History Channel, Bank of America got it's start after a San Francisco earthquake rubbled an old brick and mortar building that was full of gold collected from the gold fields... and some men noticed it, and looted it. They loaded it onto a horse-drawn wagon, then stacked orange crates around it to hide the gold bullion from view, and rode out of town with it. Nobody noticed, or at least nobody tried to stop them, since there had just been a huge disaster, and people were more concerned about finding clean drinking water and food than about protecting some inedible gold bars. They later opened a bank, which has grown to become Bank of America. So, despite the nature of their original funding source, they are still considered a legitimate bank; an autonomous corporation that can lend it's money just about any way it wants to.
Money's just a convenient abstraction anyway. It's a grand illusion that we all choose to participate in, right? We ooh and ahh and make a big show over how wonderful this gold and these diamonds are, hooking their interest, getting them to buy it, and then trade those shiny things for fancy-printed pieces of paper we can take to the store and just buy anything we want. In fact, it's such an easy scam, that... well, we can sell anything we want as long as there are people buying it! The trick is to get them hooked on what you're selling, so they just about have to keep buying it, even if they don't really want it anymore.
So, as long as everyone can agree... that the government can just mint a new coin any time it wants to; and we can all agree that the government's new coin has value equivalent to the borrowed money plus the interest that was created out of thin air... Ok? So, some people disagree that the money that pays the interest is really being “created”, per se, out of thin air. They say that there's a thing called the “labor theory of value” that sort of explains how value is created or produced by the labors of the participants in the economy.
It turns out that there's another thing called the “theory of marginal utility” that's probably worth a certain amount of your copious free time. (Pray don't just look at it and say "So?"; Please read about it, and try very diligently to think about it's implications.) The birds will appreciate your efforts, believe me.
Ok... So, it's probably cheaper to bury garbage in a landfill than it is to recycle it... Think about that for a quiet green second or two... Now abstract the underlying concept, and apply it to other things that “we” allegedly “can't afford” due to supposed cost efficiency issues; Like closing the coal fired Dynamos while replacing them with clean wind energy... Like absolutely right now discontinuing the continued manufacture and sale of automobiles that are powered by petrol fueled internal combustion engines... And mustard-ass-requiring participation in the construction of electrically powered streetcar and inter-city railroad transportation infrastructure... And hard-line forbidding the untouchables' “Bins Laden” with coal, slippery-ass' “Bins Laden” with oil, aggressive and belligerents' “Bins Laden” with weapon exports, and freedomination-to-sells' “Bins Laden” with whatever they want; forbidding them from selling their brand of more-oility to the Citizens... When petrol is the power source driving a million dynamos, maybe that's million-air? Funny... But after having no choice but to breathe it... And after having no choice but to help create it... It's not funny anymore.
So, what would that cost again? Is it cheaper to just shut up and keep breathing it, or anything? Is the marginal utility of continuing to participate in creating or supporting that version of “economy” so high that we can touch the ceiling? Just imagine anything you want, and POW!, Ex Caelo, it's as real as the shadow of the wind, right? So, watt DOE these things really cost, Johnny Booker? Here's what; I'll tell you. The answer is Time and Effort, Plans and Raw Materials. Those are among the true costs of these wares, ex tripudiis.
So, about those platinum coins. I think they should mint an extra one, and use the money that creates to fund the creation of an electrical railroad infrastructure, with enough extra wind energy to take all the coal plants off-line, right now, heart-attack serious. Many of us will be proud to accept room and board plus a modest paycheck --- government sausage with a little bit of mustard --- bought with a few shiny platinum coins. So, use your pockets, boys! Your money can't be beat. Please don't just throw it down the hole and expect us to go in after it. And, may I suggest that the coin depict a naked emperor, and one with no indecent exposure, or anything.
I need to continue writing in the line of thought I had going with this article, and in Rewarding Selfish Defense, which I haven't really finished writing yet either. What I'm thinking is that the people who work on the works projects should get a mortgage deferment, sort of like how students get an in-school deferment on their Stafford loans. The money from these coins needs to be like "food stamps" in that it can only be spent on what it's minted for... and we don't want to start an inflationary spiral by pumping lots of cash into the economy; the folks who do this labor will have to be content with not being able to afford to pollute. I want them to be paid room and board plus a small cash stipend for running around money, and then receive something like an annuity at the end of their national service contract, from which they can collect up to a certain amount per month from. I do not want them to get paid lump sums of large amounts of money, ever. It must trickle down from that trust, to avoid that inflationary spiral. They may live on it, or use it to supplement their income. They can go to college on it, or use it to continue payment of their mortgages.
ReplyDeleteI think what I really ought to do is simply extend this article, but at the same time I want to preserve the time-line of when I actually wrote about it, so I'll probably start a new article that picks up where this one left off.
It just occurred to me that BioChar and the idea of "putting a price on carbon" that Al Gore talks about may be a hint towards an interesting way of understanding the diamond-water paradox.
ReplyDelete