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Krugman writes: "So, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren't ready to mint that coin or take some equivalent action, the joke will be on us."

Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)


Coins Against Crazies

By Paul Krugman, The New York Times

11 January 13

 

o, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren't ready to mint that coin or take some equivalent action, the joke will be on us -- and a very sick joke it will be, too.

Let's talk for a minute about the vile absurdity of the debt-ceiling confrontation.

Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

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+70 # CAMUS1111 2013-01-11 09:34
The GOP--nothing less than economic and political terrorists. The entire party should be on a watch list.
 
 
+52 # Barbara K 2013-01-11 10:22
Camus1111: I am in total agreement. I've been thinking for some time that the GOP has become nothing less than terrorists to our government. If they hate the government and the people that much, they should be arrested for treason against us. Send them to Gitmo, after all they didn't wouldn't allow it to be shut down, so let's put it to really good use.
 
 
+29 # Rita Walpole Ague 2013-01-11 11:54
Ha Ha Rah Rah, Barbara K. Then, when in Gitmo, let's torture 'em, not with waterboarding, but with truthboarding, via WikiLeaks constantly being read by Brad Manning and Julian Assange, and loudly played 24 hours a day.

More than a bit sad, along with GOP terrorists, there are politician clowns/puppets among Dems. also these days. Think Wikileaking and/or forced listening to truthtellers, such as the marvelous and brilliant journalists, whistleblowers, peace and justice activists who make up the plaintiffs in Hedges, et. al. v. Obama, et. al., would be torture for such Dems., also.

One hell of a lot we've gotta do to...

UNDO THE COUP !
 
 
+15 # Barbara K 2013-01-11 12:15
LOL! Sounds good to me! They have a lot to learn about suffering, maybe they could get a good education on that subject too.
I agree: UNDO THE COUP !
 
 
+7 # CAMUS1111 2013-01-11 12:07
Yeah, Barbara K, we should send them all to Gitmo (expand it first) and waterboard them all--problem is they are so ignorant they'd have nothing of value to reveal under waterboarding so we would just be doing it for the sheer sport!
 
 
+10 # Barbara K 2013-01-11 12:23
Gee, who knows maybe they would spill the beans on who is really running their party. May have some goods on the Kochs and the dirty secrets of Rove. Sheer sport sounds fine. Look what they want to do to us. lol. Get them first. There are so many that we'd have to expand it quite a bit. They are accustomed to luxury living, after all. lol
 
 
-24 # jdirt 2013-01-11 15:19
And which Pres. promised to shut down Gitmo and didn't/hasn't. Our Great GOP King Obama...oops, sorry that should be DEMO.
 
 
+20 # Barbara K 2013-01-11 17:46
jdirt: Apparently you don't know what happened, so I'll tell you. Obama tried to have the prisoners in Gitmo transferred to prisons here in the states. The Rethugs wouldn't, approve. So where would he have them moved to? The Rs also would not let Gitmo be shut down because they wanted the prisoners kept there. Change the channel so you can get the truth. I watch the Senate and watched the whole thing go down. Obama wanted to shut down Gitmo, but that is just one of the long list of things that the Rethugs blocked. So if you want to blame someone because Gitmo is still open, take it up with your own Rethugs.
 
 
-5 # SMoonz 2013-01-12 00:25
Read the comment I made above.
What a seriously irresponsible comment from you and Camus.
 
 
+2 # Barbara K 2013-01-13 11:37
SMoonz: I don't see a comment from you above. Are you sure you made one?

.
 
 
-2 # CAMUS1111 2013-01-13 16:02
No, he doesn't know the difference between above and below, yet he wants to lecture us on "irresponsibili ty." What a joke!
 
 
+33 # wantrealdemocracy 2013-01-11 10:42
This economic disaster is brought to us by BOTH of the major political parties that are funded by the 1%. The problem can be easily solved if we just return to the tax schedule in effect when Ronnie Raygun took over our nation with the mantra that Greed is Good. Yeah, it is good for the 1%, many of whom 'serve' us in Congress who will not raise taxes but instead will hack our domestic programs that are so badly needed in these times of financial collapse brought to us by the banksters and their allies in the federal government. Time for a rebellion to change the corrupt government.
 
 
+12 # Barbara K 2013-01-11 10:59
want...: It is the Republicans who do the hostage taking to take away from us, not the Dems. It is not both parties doing this.
 
 
+12 # BradFromSalem 2013-01-11 11:27
The tax rates in place before the "sainted" Ronald Reagan was president would be an improvement. But, it is not looking forward. It is not necessarily a solution to today's problems and it certainly isn't a response to the future. Static rates will not work very long in a "future shock" world. Economic conditions change far too rapidly for a deliberative legislature to respond. That leaves us with two choices. Change our form of government to a much stronger executive with a weak legislature so that laws can be changed by executive decree, or we begin passing laws that allow for change. The first is essentially creates a monarchy, the second may expand democracy.

We automatically modify taxes and benefits with the SS top earning amount and the benefits increasing based on inflation. We need to expand the concept dramatically so that tax rates will automatically alter based on various economic indicators. As part of that we should determine how much tax income is really required to restrain overzealous spending using the Platinum coins, which if managed correctly and dynamically could revolutionize how we tax and how we spend.

We can choose to own our own economy as a Democracy or we can allow it to become a monarchy. We are at a crossroads.
 
 
+9 # Pickwicky 2013-01-11 15:25
Camus: They are on a watch list--and after many people had watched them for some time, the GOP lost the election. Someone should make this clear to them.
 
 
-4 # SMoonz 2013-01-12 00:23
Comments like these are embarrassing and irresponsible. Sure it sounds cute and gets some Democrats and the some on the left riled up.

I am a Democrat and throwing the words "terrorist" remind me of Bush/Cheney tactics. Demonize a group in the worst way as a way to squash them.

Let's think of the following scenario.

Democrats start labeling groups like the GOP and members as terrorists and placed on watch lists, groups like the NRA get labelled as terrorists and therefore placed on watchlists as well (I've seen such calls to action by some readers).

4 years, 8 years from now Republicans may find themselves in control of the White House, don't you think they would retaliate in the same way? Don't you think they would start labeling groups like Greenpeace, NOW, labor groups, immigrants rights groups, gay rights groups as terrorist organizations? Placed on watch lists as a result?

Again, don't be irresponsible.
 
 
+26 # BradFromSalem 2013-01-11 09:59
I totally agree with Mr. Krugman. Sec. Geitner, before you shut the door behind your ass, lets see your design for the Tea Party Commemrative Trillion Dollar Platinum Coin! Mr. Lew, assuming you get past Bernie Sanders, please start designing the Deficit Destroyer Denomination Platinum coin to be minted annually.

Lets just put the entire debt and deficit madness behind us. Use these coins to not only prevent the Right Wing crazies from taking the world's economy hostage, but use it to create value for the latent wealth of the US economy that is being held hostage by the wealth hoarding of the 98%.

Really, lets try it. Very little else has worked.
 
 
+23 # ndewar 2013-01-11 10:39
I like the idea of the Pres standing at the SOTU address, telling congress that it's being idiotic about the debt ceiling, then pulling a coin from his pocket and letting us know that the idiotic problem has been resolved with a silly solution. I hope that they offer Paul Krugman a seat somewhere near the First Lady.
 
 
+6 # reiverpacific 2013-01-11 10:53
Well, the $Tr (How DO you write all that?) coin sounds silly but then the US government has become a silly, illogical game, especially since the Tea-thugs took over the driving wheel of the Rethugs and the current Congress became less popular and credible than a plague of cockroaches.
And how may I ask, does a coin become worth that much -just 'cause the mint or some high-level bureaucrat says so?
Maybe if I melted my residual foreign coins and cast them into a hybrid one with my mug shot on it, I could get somebody in DC to bless it to the declared value of -say- $2Bn???!!!
Sheesh!
 
 
+9 # Bob P 2013-01-11 11:15
I love the idea of a trillion dollar platimun coin. But would coin collectors like a unique coin with that face value. We should mint 17 such coins, sell the extra 16 to coin collectors and pay off the whole national debt. Not enough trillionaires to buy them? Then maybe 17,000 billion dollar coins. They would sell better. But the premium wouldn't be as great. We should thank the repuglycans for leading us to such a good idea.
 
 
+12 # James Marcus 2013-01-11 11:25
One good Trick ....deserves another.
The Budget is now, and has been for quite a while, sheer trickery. Chicanery gone wild. Individuals, or private Business Entities, would be prosecuted, as well as 'declared bankrupt', for similar activity .
The worst part of ALL this is what is overlooked:
WASTE, FRAUD, EMBEZZLEMENT, especially, but not exclusively, within the 'Sacrosanct Arena' of Defense Spending; where unnecessary, naturally expensive technology wastes billions annually, WITHOUT AUDIT !
Wolves in the Hen House.
Here, alone, the budget could be balanced!
 
 
+10 # dkonstruction 2013-01-11 11:43
An interesting footnote to the trillion $ coin idea...it seems to have originated in a blog of Modern Monetary Theory (MMT) ideas...these are the same folks that argue that debt and the deficit in and of itself is simply not a problem and that the whole notion that we are broke or could ever go broke is absurd on the face of it and does not understand that the whole nature of money changed when we went to the current fiat money system (i.e., one in which money is not backed by precious metal).

http://www.wired.com/business/2013/01/trillion-dollar-coin-inventor/

The MMT blog is well worth looking at for trying to get a handle on their broader ideas.

http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html
 
 
+4 # BradFromSalem 2013-01-11 13:36
dk,

I have been doing some reading on the new economic perspective link and obviously from my posts have bought into the theory. Still, my biggest reservation is that we need to have built in some cutoff mechaniasm or restrictions about what can be paid for by printing the money then spending it. My first assumption is that all military expenses should be solely funded via taxes. Perhaps, in order to use the print money option for funding anything Congress has to pass the funding by a super majority. I am concerned that when something appears free, human nature will result in over spending, and the sillies that talk about no work, free money will turn out correct.
 
 
-17 # keepinitreal 2013-01-11 11:44
This is rediculus, The Pres. has signed how many executive orders??? Stop barking at one group they need to all work together. and didn't the Dems. get hat they wanted on the fiscal cliff deal???
 
 
-5 # BradFromSalem 2013-01-11 13:19
This President has not signed anywhere close to enough executive orders, especially pushing his economic prerogatives. And, the dems won, BFD, we get some of what we want in one deal and that covers all crap we have put with in the name of compromise for the past 30 years.

Payback for destroying the American dream will be very, very sweet. The neo-liberal economic agenda has had their way for the past 30+ years, how has it worked out for you?
 
 
+7 # dick 2013-01-11 11:47
I think minting a $1T coin for deposit would be silly. Mint 100 $10B coins & sell them to idle plutobrats whose parents oppose "Santa Claus" welfare & safety net "hand-outs" as character destroying. Kids could use them as poker chips. Bane Capital could frame one for their lobby. Mitt could get one for each house & display in auto elevators or dancing horse stable. All this would be tax deductible, of course. SCREW the debt ceiling.
 
 
-4 # economicminor 2013-01-11 11:57
I am just totally amazed that the wheels haven't fallen off this rickety cart yet.

Every one with half a working brain knows we can never repay what we have already borrowed, especially in the face of Boomers not only retiring but just in general getting old and needing more and more medical services..

We have become what we feared. You pretend to work and I'll pretend to pay you... not that those working aren't but they can only support so much. And it isn't this much debt plus half the nation either retired or disabled or unable.

Just insane and unbalanced. I have thought for years that this was it, yet things just keep getting more and more disjointed and dysfunctional.. It is just a matter of time and timing before something brings all this BS down.
 
 
+10 # RicKelis 2013-01-11 12:03
I got curious about the Republican debt ceiling threats a couple of weeks ago and found this on WikiPedia :

Possible methods of bypassing the debt ceiling
* Fourteenth Amendment: Section Four of the Fourteenth Amendment to the US Constitution states that the validity of the public debt shall not be questioned...
* Minting coins in extremely high denominations: a US$5 trillion coin could be minted and deposited with the Federal Reserve and used to buy back debt, thus making funds available.
* Monetizing gold; The Secretary of the Treasury is still authorized to monetize 8,000 tons of gold, with a market value worth over $1,600 per ounce.
* Converting fractional reserve to full reserve banking: the debt could be eliminated by raising bank reserve requirements, converting from fractional reserve banking to full reserve banking.

Paul Krugman and Robert Reich have called attention to a couple of these possible methods of bypassing the debt ceiling.

From a Huffington Post article,"14th Amendment Debt Ceiling Option: House Democrats Support Obama's Use Of Power,"
"Rep. Peter] Welch...said 'if there is the ultimate act of congressional irresponsibilit y by having the United States default on its obligations, we encourage the president to rescue the country.' He said ultimately the courts would have to decide what authority the amendment confers on the president."

Paul Krugman and Robert Reich agree. And it sounds good to me.
 
 
+4 # dkonstruction 2013-01-11 12:17
I'm also curious why Kruman doesn't address (at least I have not seen it but if i'm wrong please cite where he does) those economists that argue that the debt and deficit are not a problem (unlike Krugman and people like Reich and Stiglitz that simply seem to be agreeing that the debt is a problem just one that we should not deal with now)?

For an interesting take on that point of view see this interview with economicst James Galbraith.

http://voices.washingtonpost.com/ezra-klein/2010/05/galbraith_the_danger_posed_by.html
 
 
+12 # angelfish 2013-01-11 14:01
Paul Krugman is the ONLY logical choice for Secretary of the Treasury. He KNOWS what needs to be done to protect America and her citizens from the rapacious Greed and Wanton recklessness of the ReThugs. WAKE UP, Mr. President! STOP putting ReTHUGlicans and Wall Street Insiders into your Cabinet. Your Strategy MAY be, to hold your friends close and your enemies closer, but this is ridiculous!
 
 
-1 # toddao 2013-01-11 14:15
I have always enjoyed reading Mr. Krugman's view on economic issues. However I have to rethink his opinions when he states in his article, "the U.S. gov't as a whole which includes the Fed". Is Mr. Krugman unaware of the fact that the Federal Reserve is not a part of the federal government but an organization of private banks which is not accountable to the U.S. taxpayers.
 
 
+6 # mdhome 2013-01-11 15:29
Think of all the money to be saved by not needing to pay interest on the debt if there was none. Someone needs to save the country and it looks like it sure is not going to be the republicans.
 
 
+13 # mdhome 2013-01-11 15:35
Economicminor: "We have become what we feared. You pretend to work and I'll pretend to pay you...", The problem IS we WORK hard AND they PRETEND to pay us. All the pay is going to wall street and the CEOs.
 
 
+4 # Rick Levy 2013-01-11 19:00
I like the idea of a platinum coin, maybe with the image of Boehner or some other prominent rethuglican on it just to rub it in to them that for once the Demos outsmarted the GOP at the latter's own game.
 
 
+1 # 4yourinformation 2013-01-12 10:40
I say mint the coin(s). We need to begin serious discussions about how money and debt and the FED works. We need to take back our power to create money and credit.
 
 
0 # robcarter.vn 2013-01-12 22:51
Right, remember Capital Budget debt Payments and Expense budget spending are not same pieces of account paper debated at different times in Parliament.

If you can take cash from Savings Capital example(Fort Knox)to bail banks, then they lend to government Expense Budget as Sovereign Bonds, they can save interest and fees difference, take from hoardin government Funds and lend as bailout to government expense budget? Rit?
 
 
-1 # aitengri 2013-01-12 23:45
It is my god given right, and constitutional prerogative, to demand that there be minted a sufficient number of $!000 denominated mini platinum coins to enable those of us who can afford to accumulate in that denomination, to have and to keep them. The very idea of escaping true debt is obnoxious, and the notion of minting a so-called trillion dollar piece of propaganda is what gives privilege a bad name. There always has been privilege, and there is an intrinsic noblesse oblige that goes with absolute property title. Those who have attempted to climb the artificial stairway of debt deserve their fate.
 

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