Thursday, January 10, 2013

Drive a stake in banksters' hearts - MINT THE COIN

Fortunately, the idea of the U.S. Treasury minting a $1 trillion platinum coin has broken into the open.

Unfortunately, a lot of people seem bewildered by the outlandishness of the idea.

But most unfortunate of all, people do not realize what the real, HUGE issue of platinum coin seigniorage is: breaking the monopoly hold of private banks' (ie, Wall Street's) over creating new money.

This is what the whole issue really comes down to: can we, as a sovereign nation, create our own money that is dedicated to the general welfare, or must we rely on bankers to create money only for private gain?

General welfare versus private gain. Which goal do you want your monetary system oriented toward?

Reading the various blogs that have appeared the past few days about the issue, it is downright shameful how few supposedly progressive bloggers and commenters understand this issue, and the need to destroy the banksters' monopoly on creating money, and retsoring the government's role in creation and allocation of money and credit.

The good thing is that this issue of seigniorage (seigniorage is the difference between the value of money and the cost to produce and distribute it) shows that the financial crash is finally forcing into public debate the issue of our monetary system, who owns it, and for what purpose they operate it.

So, this is similar to the late 1870s to 1880s, when the Farmers Alliances were forced to recognize that local organizing of cooperatives alone could not beat back the sustained assault of financiers and bankers. This new consciousness by the Farmers Alliances led directly to their organizing for reform of the monetary and banking systems - organizing which unleashed the grass roots forces that created the populist movement of the 1880s. The combination of the financial crash of 2007-2008, with the craven attempt by the rich to avoid taxes, has led to these ridiculous political showdowns over imaginary "fiscal cliffs." The only positive aspect is that this has forced American citizens to begin considering the very nature of the financial and monetary systems.

Joe Firestone (who uses the internet handle "letsgetitdone") recently offered an outstanding intellectual history of the trillion dollar coin idea, which includes links to the very first substantial proposal for minting a $1 trillion platinum coin; the intense discussion and debate of platinum coin seigniorage at Warren Mosler's blog;  and what Firestone identifies as "the most comprehensive and rigorous discussion available of the relationship between"  coin seigniorage and inflation, by Scott Wiler.

From the very first substantial proposal for minting a $1 trillion platinum coin:
If you think about it, it does seem odd that the US Government is the monopoly supplier of US dollars and yet our politicians go through life thinking the government will run out of money unless it can borrow more.  Of course that’s not true, the coins in your pocket are legal tender and yet were not issued against debt.  They’re minted by the US Government, backed only by the gilt-edged credit of the American people, no one is paid interest on it and they don’t add a penny to the statutory debt.  What’s more, the use of coins as legal tender is scalable, they could replace the use of Tsy debt sales.  No, you wouldn’t have to carry more coins in your pocket.  Nothing would change except Tsy would be credited by the Federal Reserve for the sale of interest-free Treasury coins (presumably of large denominations) instead of interest-bearing Treasury bonds.
The two great powers of a sovereign state are the monopoly of violence and seigniorage, the profits from the creation of money.  If the federal deficit (that is, expenditures in excess of tax receipts) were funded by seigniorage revenue, not only would there be no debt service owed on the money, there’d actually be no deficit.
Joe Weisenthal at Business Insider understands this issue: Why The Fight Over The $1 Trillion Coin Is The Most Important Fiscal Policy Debate You'll Ever See In Your Life.  And in 3 Huge Myths About The Trillion Dollar Coin Plan To Save The Economy, Weisenthal tackles the "big" objections: MYTH #1: This will cause massive hyperinflation; MYTH #2: The trillion dollar coin will destroy the dollar!, and MYTH #3: If this idea is so great, then minting a $16 trillion dollar coin could just solve our debt problem!

Mike Konczal at Next New Deal is against a trillion dollar coin - because he has a better idea. Since the estimated daily federal revenues come up short of daily expenditures by $10 billion to $20 billion, he proposes that the President have a $20 billion coin minted each day that the Congress fails to provide means for the spending it has already authorized.

 Meanwhile, The Baculum King at DailyKos pointed to this tweet from the National Republican Campaign Commitee:
"The amount of platinum needed to mint a coin worth $1 trillion would sink the Titanic."

It did not take long for someone not brain damaged by wrong-wing ideology to shatter the GOP-groupthink with the droll observation, "I had a $100 bill once, but it was so much heavier than the rest of my currency, I had to give it away."

Drive a stake through the heart of the zombie vampire banksters! Mint the COIN!

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