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A Challenge to Business Insider and Huff Post
Two liberal Emags have been pushing for the "Platinum Coin" as a solution to the upcoming debt ceiling crisis.
Adding to the push by the liberal media, the White House is sponsoring a petition to “force” the Treasury to issue a coin for a trillion or two. I want to barf at this talk.
In my opinion, there is no substance to the coin solution. In theory, it does resolve the debt limit issue that is just months away from a crisis. But that would be a terrible outcome for the country. Any chance at achieving fiscal discipline and a sustainable debt path would be lost.
Yesterday, the Fed indicated that it was closer to ending and reversing QE than had been previously been thought. If you believe the Fed (I don’t), then you should expect QE to end before the end of the year, and the long process of unwinding the Fed’s balance sheet will begin. But if a coin is used to replace the bonds the Fed has in inventory, the Fed will be powerless to reverse QE. The coin makes prior QE permanent. I see that step as the ultimate “fold” on responsible monetary policy. It’s a cheap way to avoid the country’s “Speed Bump” on explosive debt creation.
Bottom line: The coin is a phony solution to a real problem.
BUT
I want to say in print that I will support the coin concept with all of the resources I can bring to bear. I will write about it, I will sign petitions, I will march on DC, and I will put up money to support the cause.
BUT
My support is conditional on a minor revision of the “plan” spelled out by Huff Post and Business Insider. My plan:
- Three coins are issued. Two for $500B; the other for a cool $1T. I would use these coins to extinguish $2T of debt.
- The $2T of debt reduction would be sufficient to bridge the country to 2015. As a result, the country would benefit from two years without a self-induced financial crisis. The $2T buys the country breathing space through the bi-elections. My coin solution would take politics out of the process for a much needed 24 months.
Like it so far? Now, the key difference between BI/Huffy and me:
- A $500B coin would be given to the Federal Employee Retirement System (FERS).
- A $500B coin would be given to the Military Retirement Fund (MRF).
- The $1T coin would be given to the Social Security Trust Fund (SSTF).
The government Trust Funds (TF) for FERS, MRF and SSTF are holding a whopping $4.6 Trillion today of government IOUs. My plan would reduce that by less than 50%.
The debt held by the TFs is more of an accounting entry than a real debt. The bonds held by the TFs do not, in any way, secure the promises that the government retirement funds have made to current and future beneficiaries. The benefit payouts are set by Congress; they can be changed at any time. The existence, and the size of the TFs, has nothing to do with benefits. Period.
I believe that my proposal is a substantial improvement to the one being pushed by the liberal media. It achieves everything that those folks have been pushing for. It does that without tying the Fed’s hands, or creating the risk of future inflation. What’s not to like with that result?
There is not one chance in a million that the likes of BI and Huff Post would go for this. These outfits do want to see the pesky debt limit problem disappear, but they LOVE Social Security.
My challenge to Arrianna Huffington, Henry Blodgett and Joe Weisenthal is to step up to the plate, and make a real stand on the coin. Do the “right” thing. Do the “smart” thing. Mint your coins; buy the time you think we need, just put those coins of yours in the tills of America’s Trust Funds.
My bet here? I never hear from Arianna, Henry or Joe. Their base of readers would crap in their pants over my suggestion. The readers would rip those Mags apart with criticism. Those “influential” supporters of the coin plan that BI keeps referring to would run away in droves. Those who want coins are also pregnant with their support of SS. BI and Huff Post can’t do the right/smart things. If they can’t do the right things, they should just fold their cards on the coin idea.
Note:
I wrote about using a coin to extinguish federal debt owed to Social Security on 10/31: How To Eliminate $4.5 Trillion of Debt.
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They should issue it, so that one day in the future it can be shown to young economists as an iconic example of how a monetary system fails.
That will probably be some time in 2017 after it sells on eBay for for a $Trillion pesos, or someone uses it in a soda machine.
I remember when Coke in bottles was a dime...
I remember when coke in little baggies was a dime..
I remember when we didn't even have plastic baggies, we used something called glass.
The first minting will be even more collectible. ;)
Hopefully in the future we will have learned our lesson and there will be no more "economists", nobel prize winners, or other "experts" that have no idea how things work.
That being said, challenging Joe/Henry to this is a waste of time, they are too busy writing about the latest iPhone app, quoting their savior Ben, or hyping up the military to their sheep readers.
Let's see, derivatives consisting of 100 to 1 for that Platinum OZ. with 115% going to government spending. Oh, and 55% for military past and future contingencies, and 60% for crony capitalist kick-backs... Hmmm, 15% in the WTF fund. That should set us up pretty nicely and as along as China is cool with it...
Sophistry will never die, as it is the primary means of support of the facade protecting the criminal cartels masquerading as governments.
In order to eliminate the sophists, one must first free the sheeple from their clutches.
Don't be so hard on the birdbrains. Here's how we fix the economy:
The Change you can Believe in Moar Properity Plan
Mint $1 trillion platinum coin.
Use freshly minted spare change to pay off debt to China. Great success!
Repeat as necessary. Enjoy booming economy.
Yes! Change you can believe in.
You're welcome.
Obama's mentor, Robert Mugabe of Zimbabwe, should have tried the platinum coin. Whitey's fault.
I am sure libturds at Huff Po and Business Insider (the internet dork from Merrill what is his name?) will believe anything.
Even you Bruce, will tire, from tipping them off.
I can see the future of this country now. A population of undead chanting Coin, Coin, Coin ...
www.youtube.com/watch?v=sr9SuvBsw-8
So sad.
Hey let them try it --We are screwed anyways so WTF. We should ask them to mint 500 of the suckers and let the chips land where they may. As the old saying goes " Be shot as a lion as a lamb.
THOSE OF US WITH LOTS OF PHYSICAL GOLD WILL BE HAPPY. Real happy.
The coin is a real solution to a phony problem.
Hang everyone in the Federal Reserve, then we don't have to print no stinkin coin.
We don't need no stinkin badges.
Kennedy was assasignated for printing Greenbacks
Nema problema. Just let platinum, gold and silver to find it´s real price. Solved.
Agreed. Once the metals disappear off the shelves we will find "market value"