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Seigniorage Hack Could Resolve Debt Limit Crisis
UltraOne writes "With the US Senate voting to table the Boehner debt limit bill, the US is only a few days away from running out of cash to pay for all its obligations. Slate is reporting on a fascinating legal hack that could come in handy, described by blogger 'beowulf' back in January 2011. Seigniorage is the extra value added when a government mints a coin with a face value greater than the value of the precious metal contained in the coin. The statute governing the minting of coins contains a section (31 USC 5112(k) ) that authorizes the Secretary of the Treasury to mint and issue platinum coins in any denomination or quantity. To keep the government from running out of money, Timothy Geithner could order a $5 trillion platinum coin struck and deposited at the Federal Reserve. The money could then be used to fund Federal Government operations (blog post contains legal details)."
Can you say it?
Do this, and you make it clear to everyone in the world that we're willing to devalue their bonds/dollar investments to near zero just whenever we feel like it...
"I do not agree with what you say, but I will defend to the death your right to say it"
If capital can be created out of thin air, why don't they just make everyone rich instead of those connected enough to use the discount window?
Doesn't this just inflate the money supply arbitrarily? That reduces the value of a bondholder's rate of return, because while he will get back 100% of what he's owed instead of maybe 80% with a default, the money will now be less valuable? Seems like that could just as easily cause a significant downgrade in credit rating?
It's not that much different than just creating virtual "account" money, as it's had been done so far.
Or they could just print dollar bills and use those to pay their debts.
But it's generally a very bad idea and creates worse problems than it solves by devaluing the currency.
How about instead of increasing the debt limit they A) Stop pissing away money and B) Find a way to MAKE money. Making money doesn't mean in curring more debt. What US the is doing is what most people do in college, they discover credit cards, take out 10 of them, max them out and have to get more credit cards to pay off the one's they've always maxed out. This is EXACTLY what increasing the debt limit is, it's increasing your credit limit or taking out a credit cards because you can't pay them off. At one point stop spending and put money into your bills.
Where was I going with that? Well they can now strike a coin thats worth N dollars, so how is this any better. I'm going to increase my credit limit by N to save me? That is a horrible idea for a consumer let alone a country.
This is essentially what Greece is about to do. Announce your own currency, set it at $1 fake dollar = $1 billion real dollars, then give all your creditors $20 fake dollars, call it a day and the debt is resolved! Actually this is what every country does that isn't western europe about every 60 years when their economy craters. The reason the dollar is so strong is that we haven't had to do this since it became a popular tactic about 100 years ago. Once we do that, we lose relevance in the global currency market, and paying off dictators like Saddam, Gadaffi and others puts us on a much more level playing field with Iran, Russia, China, India, Brazil etc. becomes much harder, because their currency is just as likely to be worth something tomorrow, after, or in the middle of a global or regional war.
moox. for a new generation.
..you would give us worthless money. Just declare tree leaves as legal currency of the USA, then. Saves the effort and you get a 100 points for good geek style from me.
"All of its obligations"... Not true: monthly income would amount to some 300 billion US$, making the US able to pay only *part* of its obligations (the 300 billion part). Worst is not what the US cannot pay, but what the markets think the US cannot pay (in the near future) -> that is what makes stocks crash.
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Given the willingness of both parties to force a default, I suspect any attempt in this direction will be quickly torpedoed by House or Senate.
There's legal loopholes in practically everything that allow you to do *anything* you want more or less if you're the gov. The reason this will not happen is because when this 5 billion $ coin is minted with a picture of who the hell knows what on it and put in a safe in a sewer under foggy bottom, the entire farce would look so ridiculous that the USD would more or less collapse.
One good way to fix the deficit would be too cut no child left behind completely, politically impossible but let's face it, kids are just as stupid or smart as they were before that legislation.
INFLATION!! no seriously, this debate is a fluffed up scare tactic, the US is bringing in enough money to pay for its debt, but the US just wants to SPEND MORE than its bringing in so lets just see how much were willing to slit our own throat for bullshit smoke n mirrors projects...
I am not going to argue politics with anyone, and that is because I am disappointed with every single one of the self interest fat ass out of touch snakes in the grass fuckwit children, this administration and last
The cost (read: intrinsic value) of a $100 note is roughly ten cents (http://www.bep.treas.gov/uscurrency/annualproductionfigures.html). Printing more dollars (or seignorage, or monetizing debt: it's all the same) doesn't solve the problem and produces inflation. Your government needs to stop spending beyond its means.
All the while, the rest of us are stuck moving refrigerators and colour TVs.
Just ask for some cash from Apple.. i hear they have a bit of cash floating around.
Someone want to explain how this is different than just printing more paper money? The value of the platinum? Seriously?
This "crisis" is going to be over within a week, why? Because all the politicians know that old people vote, and politically all hell will break loose if they can't send out the next round of Social Security checks because they need the money to pay our troops. Why prolong the struggle by striking this coin?
If the government is doing something profitable, they shouldn't be doing it. With all likelihood, if something is profitable, a guided free market should be able to manage it much more efficiently.
The government's duty is to perform services that are by their very nature not profitable. Public schools, police, fire, national defense, etc... it there isn't a profitable model that can provide these services at the level we expect, the it is up to the government to suplement or perform those services.
If the government is turning a profit, it's either doing something wrong, or doing something that someone else should be doing instead.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
I can't believe something this idiotic is on slashdot. Hey, why stop at 5 trillion? Why not make a $5000 trillion coin, and then we'll all be rich, right?
Seven puppies were harmed during the making of this post.
Such a coin would not be compatible with existing coin-op machines.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
Just sell the platinum. And the silver. And the gold.
This is going to make the 'back to gold' monetary system people (many Tea Party members among them) shit bricks as they watch the basis of their beloved economy whither away.
The single $5 trillion coin is a joke. What would it weigh? But more important: It's not divisible so nobody could spend it, making it illiquid and therefore worthless as currency. Mint, say, $1000 platinum coins and now you've got something people can deal with. And put in suitcases and fly out of the country.
Have gnu, will travel.
...what the "gub" stands for in "gubmint"! Seriously, we'll completely kill Europe in collapse style points if we do this...
...but I think I should point out that this is nothing but a theory, posted by a blogger, and now given some air-time by Slate.com.
Sure, it's legal, but so is lopping off my own arm, so long as I don't kill myself. (That's illegal.) Yet strangely enough, I'm not in any rush to do that just because I can legally do it.
Same thing here. The government may be able to legally take this "escape hatch", but they're not going to, because it would have the same effect as lopping off all their limbs.
[End Of Line]
It's depressing how the debt ceiling is such a matter of contention right now, when it's been increased without much hullabaloo every six months or so since WWII. The reason for any artificial crisis is for politicians to threaten the public with doom and gloom in order to sneak something past them that the public normally would not accept. With Democrats and Republicans both playing along, what do both parties want to sneak by us? My guess is deep cuts to vital social programs, since the Obama administration started calling them "entitlement programs" at the start of the debate.
In the congressional hearings sure to ensue:
"So, Mr. Secretary, you're telling us you were carrying the 5 trillion dollar coin in your pocket and you think you lost it when you pulled out coins for a soda machine?"
If you could do that, (make those coins) there would not be a problem. The problem lies in the inability to secure the oil, so the credit spigot will have to be closed, it's about the army fearing it can not protect the country anymore.
Also there is billions of dollar coins lying unused so let them use those..
You're making the rather large assumption that the government is intelligent enough not to do this. Prior experience suggests the only truly infinite government resources are stupidity and incompetence.
Then we might have some actual change 'round here. Yeah, it'd be rough for a bit, but is pretty rough already.
Only a fool thinks this is a good idea. Why can't our elected representatives do their jobs properly?
Circle the wagons and fire inward. Entropy increases without bounds.
This contradicts the entire spirit of a suicide pact. What's the point if you can cheat death?
So, clearly the US government is run by morons, but what is a citizen of said government to do? Renounce their citizenship, say 'I want nothing to do with these morons', and become Canadian or Mexican refugees? Maybe have the entire rest of the country conspire to just smile and nod when they're around, agree with whatever outrageous things they say, and then completely ignore them when they're not around and make up silly excuses when they nonsense they asked for hasn't happened? What the heck is the protocol, here?
Surely nothing will come from writing them a nice letter asking them all to stop being douches with the financial competence of a four year old that just found their fathers credit card.
They should do it, just the lulz value of it will exceed 5 Trillion in no time, never mind the value of gold, that will double in a heartbeat, as people run in panic out of all USD denominated assets.
You can't handle the truth.
.. and with inflation clearly on the horizon, I wanted to salute our wise helmsmen ( and all their mercenaries ) for making sure our debt problem is solved in such a satisfactory manner. It is pure genius. Massive inflation and suddenly the trillion $ debt it easy to pay off. Wait a second, wasn't it something China warned US not to do?
http://www.zerohedge.com/article/republicans-are-pushing-brief-default-china-warns-us-playing-fire
Such a shame its likely to harm all little schmuchks like me, but hey.. at least we will all be millionaires. Whoopee...
This post is provided without warranty as to reliability, accuracy or otherwise or fitness for any particular purpose.
Creating DEBT FREE currency even if it is in the form of coins is much better than borrowing money at interest from the private Federal Reserve Bank. The only thing the government needs to be careful of is not minting too much coin. This is a step in the right direction.
check that dollar chart lately? Devalue much?
they are green pieces of paper. no more, no less. Only worth what somebody will give you for them..
New lows against the japanese yen and swiss franc.
Use your best judgment...
The law is a weapon of the government, not a protection for the likes of you. Surely you understand that.
Cause as we've seen so many times in the past, devaluing currency and instigation Hyperinflation is always the way to fix economic woes.
What happens if someone steals it? Though it would be un-cashable, but funny to watch someone try.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
When it didn't involve just randomly stamping out new coins. It's one thing to invoke the 14th amendment and unilaterally raise the debt limit, but to do this? "I reject your reality and substitute my own" is fine for politics, not the value of money.
A half truth is a half lie. Trying to play word games is nothing more than a lie and if Obama believes
that he can destroy the constitution by having us define "is" like B.J. Clinton he should be impeached!!!
Of course they wouldn't use $100 bills for that. You can print however large denomination you want.
In Hungary the biggest denomination was 10^18 pengö. (egy milliárd bil peng (long scale) - one billion tril pengö (short scale)).
http://en.wikipedia.org/wiki/Paper_money_of_the_Hungarian_peng%C5%91#Postwar_inflation_series_.281945-1946.29
Which most foreign debt probably isn't in...
Please submit your entry for the design of this historic coin, containing obverse and reverse sides, below. Winner will win this thread.
More like scam.
---- Booth was a patriot ----
Canada is not part of Western Europe, It's not part of Eastern, Northern, or Southern Europe either. Canada is not even *IN* Europe. For the record, Canada is not in Africa, Asia, or Oceania either.
It's part of North America. There is a really big chunk of land north of the USA (no, that is not "more USA" that's Canada). Canada is well known for their high per capita firearms ownership, relatively low crime rate, cold winters, mounties, filming of "The X-Files," and the french-speakers in Quebec.
Seriously guys the Government has been pawning off the copper-nickel coins on us for years. Just call it a 1 quadrilliion dollar coin made out of polished feces and give it to the Fed. Then they get what they deserve.
When I first heard the idea, I thought that using Platinum would be SOO cheap for a trillion-dollar coin.
I thought about some of the really rare metals like Osmium or Rhenium. The problem is that they are both super-hard, so it would be hard to strike them as coins.
Then I had it: Americium, specifically Am-241. It has some great attributes for something you'd want to put into a vault and make it a tricky thing to steal.
it is the President's job to execute the laws & budget that congress hands him, with whatever funding they provide. We are looking now at a dictator if Obama does not sign a budget passed by congress.
It is the job of the President to be a check against the power of the Congress. If Congress passed a bill that balanced the budget by confiscating all private property, should Obama sign it? He is the executor, but also the protector.
Why not just mandate the NSA to put their computing horsepower to work mining bitcoins? That'll solve the deficit problem in just a few weeks.
Economists, climate scientists, and any one else with an education is derided by the anti-intellectuals. That is the best example of educated people you can come up with?
I currently have like a gazillion $ on a type of cheque from my grandpa. Should've paid for collage.
Well there's your problem... collages aren't worth as much as you've been told.
"Anyone who [rips a CD] is probably engaging in copyright infringement." - David O. Carson
you got yours so now the rest of the country can go fuck off. I hope your parents are dead, as I would have them to have to live with the shame of having raised such a self centered embarrassment of a child. On the plus side, we can use your post to show why abortion is, quite often, a good thing.
And people keep telling me Bitcoin doesn't sound credible or that they cannot understand how it works and thus want nothing to do with it...
/me ducks
We are not facing a "debt" crisis here. Judging from current market prices for US securities, people with lots of money to put in safe places still think our public debt is manageable. What we are facing is a liquidity crisis.
I think the term "debt ceiling" is misleading. Many people seem to think this is about limiting Obama's ability to add to the debt. Issuing treasury securities adds very little to the debt; it's *spending* that creates debt. If I loan you a thousand dollars, you are not "in debt" until you spend that money on something I can't or won't accept as repayment, like your vacation. Under our Constitution the President cannot spend money on his own authority. Spending is authorized, and in some cases mandated by Congress. And of course "spending" usually isn't a cash up front affair. When we order a million dollars worth of missiles from Raytheon, they don't demand cash up front; they deliver the missiles and present us with a bill. The "money is spent", and now the President has to find a way to raise the cash to satisfy Raytheon.
What Congress is doing is tying the President's hands when it comes to raising the cash to pay the bills.
If he can't raise the cash by issuing securities, and Congress won't raise the cash by hiking taxes, this leaves him with two options: not pay the bills, or print (in this case *strike*) new money. The problem with creating new money is it ties the money supply to the federal budget, rather than the needs of the economy for stable prices. That's how the Weimar Republic paid its bills. It'd be OK to do once, but if Congress doesn't raise taxes of the debt ceiling, we could be in the same hyperinflation boat.
Issuing securities is, within limits, a fiscally responsible way to pay the bills, if we can trust the market's judgment of our credit risk. Remember those bills are a *result* of assuming financial obligations; they aren't the *cause* of those obligations. The cause of federal debt isn't federal savings bonds or T-bills, it's federal appropriations. And you can't pay the resulting bills with spending cuts, even if those cuts are a good idea for entirely different reasons. Creditors won't accept fiscal austerity as payment; they want *cash*.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
> the US just wants to SPEND MORE than its bringing in
If by "the US" you mean the Republican party, then yes. The current budget deficit comprises four major components:
1. The Bush tax cuts.
2. Medicare Part-D drug benefit (which prevents Medicare from negotiating bulk prices).
3. The two "unfunded" wars.
4. The 2008 recession (which severely reduced tax revenues, due to high unemployment).
Each of these is roughly 1/4th of the deficit. All were created, either intentionally or un-, by Bush-II, when he had control of both houses of Congress. (Although, arguably Clinton shares responsibility for the recession, for signing the repeal of Glass-Steagall.)
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
My only question: Does the US gov't happen to have $5T worth of platinum laying around somewhere? If not, how do they get around that minor obstacle?
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
As much as people hate the tea party, a balanced budget constitutional amendment is not evil.
It says a lot that the balanced budget argument is often these days reviled variously as crazy, ignorant, and/or evil.
I doubt most people even knew who he was, or what he did to try to save the American people from the banks.
The intrinsic value of a fiat currency is the value of its medium. No fiat currency in world history has succeeded.
The biggest of the big boys are sucking $5 trillion a year out of the system (i.e. Us) each year. Greed really does know no limits.
I come here for the love
The major changes we'd need to make are not going to go over well. We need to bring the military home. When we do, unemployment will go above 12%.
I'm not so sure about that. Maybe if we brought them all home *tomorrow*, and laid them off right away there's be a brief spike, but any sanely executed drawdown will probably take months. Further, military personnel are fairly intelligent, usually quite motivated, young, fit, and these days often have skills that would transfer over quite well.
I think we'd see the same effect that we saw after WWII, when there were similar fears. But not spending on a huge military would free up resources in the free market, and the influx of high quality workers would only serve to create more wealth and jobs. Just as then, when the draw down of the government drain of resources and manpower ushered in one of the greatest periods of prosperity and employment we'd see a similar improvement.
As long as government can resist spending the "savings" on even bigger domestic white elephants. Unfortunately, the military is NOT the biggest draw on the federal budget, despite being the only thing that the federal government is actually charged with doing. A smaller military is good, but however big or small it is, aside from debt service, everything else should be much less.
Can you be Even More Awesome?!
The denomination of the coin is not tied to the value of the metal. The coin just has to be made from a precious metal. The platinum coin itself could be the size of a dime.
That's the "Seigniorage" aspect to this. The coin doesn't have to have metal worth $5T in it, it just has to have "$5T" printed on it. Many coins are worth much less in their metal than in the face value. The presidential dollars, for example. Also, all paper bills are essentially worthless for their material, but that doesn't stop them from being worth $100 if that is printed on them. This plan must use a coin though, because there are laws in place governing paper bills that keep the President from doing it with paper.
Don't Bogart the fish sticks
Printing money is a stock standard used since money was invented technique of government.
And everybody knows that the US will print money before it actually defaults - since it's far less embaressing for the politicians involved.
And everybody, except the politicians and talking heads on TV apparently, knows that when you have an income in the trillions of dollars you don't default on a few billion dollars of interest payments. It'd be like a couple who earns $100,000/year after tax not paying the $420/month mortage because one of them won't let the other ask the bank to raise the credit limit on their visa.
The platinum coin will be stamped with a design that looks like the coin version of this paper money, with a few extra zeros.
Thank you for your reasoned posts. It's encouraging to see people who "get it" when it comes to inflation.
I would only add, to emphasize the fact that inflation has only to do with aggregate demand and supply (and not with "money supply", whichever definition happens to be the preferred one of the day), that it really doesn't matter where added demand comes from.
If all those Wall Street bankers decided to go on a shopping spree with their millions and billions (instead of putting it into treasuries and the like) that would have exactly the same inflationary pressure as when the Federal government goes on a shopping spree of equal volume.
This contradicts the entire spirit of a suicide pact.
Totally true. History is full of ideological crusaders who had blinkers to reality, and stuck to their guns as the world burnt up around them. We have seen one such suicide pacts convene. They /always/ think they are doing the right thing. CHARGGE!!!!!
Like all pain, suffering is a signal that something isn't right
If this were to happen the rest of my life would be dedicated to stealing the most valuable minted coin in history
Of course, if you were to print a large enough amount of money, it would lead to inflation (or asset price bubbles, which actually seem to occur first in the current economy).
The reason for this is clear: the current system is set up to benefit the rich: see this recent entry on billy blog
Since the rich have more money than they need already, their increased income does not go into consumption. Instead, they use that income to buy stocks and other assets, hence the quick recovery of the stock market since the great recession.
Fixing the system is just too hard, real financial solvency is just too hard, let's invent ways to get around it and pretend we're still solvent.
Then when we crash, we'll crash even harder.
It would seem to me that the seigniorage of BitCoins would be much higher than any precious metal. So this could help us.
Although a lot of posters pointed out that creating platinum coins and printing money are the same, and that printing money leads to inflation, no one has explained why. Here is the basic equation:
all the money
__________________ --------> 1
all goods and services
Read this as "All the money divided by all the goods and services tends to equal 1" This is obviously a dynamic; after a few cycles through the economy the prices stabilize to where the prices for all the goods and services pretty much sucks up all the money.
An example, simplified in true Economist fashion, would be the "dollar/apple" model". If all the money equals 1 dollar, and all the goods and services are 5 apples, the price of each apple will stabilize at $.20. If you increase the money to $2, the price of apples will stabilize at $.40. Or, if you increase the availability of goods and services to 10 apples, the price of each apple will stabilize at $.10. The whole economic picture is a lot more complex, but this clearly illustrates the underlying principle. The USA could devalue the currency by creating more money, and it will probably happen one way or another. This is a big worry for China and other countries that carry large reserves of American dollars or American debt.
Seigniorage also describes the fee, including profit, that governments paid to banks to mint coins or issue money based on precious metals. The difference is that money fully backed by precious metals tends to be pretty stable over time. Up until about 20 years ago an ounce of gold would buy pretty much what an ounce of gold would buy 150 years ago. An ounce of gold in 1860 would get you a very good suit, and an ounce of gold in 1990 would still get you a pretty good suit (say, a Hickey Freeman semi-custom at Marshall Fields.) Now an ounce of gold would buy you TWO pretty good suits, but the reason is more likely that the availability of good suits is twice what it was in 1990 (Which corresponds to the second illustration in the "dollar/apple" model). One reason extreme Libertarians push for money backed 100% by precious metals is that such money cannot inflate or devalue if the given quantity of the precious metal is relatively constant. (Paul Krugman's Nobel-prize winning model was based on metals-based currencies WITHOUT 100% backing, and showed how a devalued currency could cause the reserves of the issuing country to be drained.)
"The mind works quicker than you think!"
it would only increase inflation if it hit the economy.
The whole point is to allow the government to spend more money.
Anyway. It's ridiculous, won't happen. US bonds would become worthless overnight and the US dollar would die in fiery hyperinflation if the government attempted to inflate away it's debts in this manner.
What they will do instead is try to inflate away the debts without people noticing, the same as the UK is doing. i.e. Over 5-10 years.
Deleted
Why make a platinum coin, when zinc will do? This is the problem with "Fiat Currency".
http://video.google.com/videoplay?docid=5232639329002339531
My Monopoly money just became worth more than my bank account.
Oh yeah (duh!) thanks. Sorry, with all the talk about the "gold standard" I jumped to that conclusion.
Still, that would take a lot of Pt, even if the coins were in $1k denominations. Does the statute require that they use pure Pt, or could they use an alloy or plate process?
Either way, I like this idea! It would be nice to see the gov't printing its own cash for a change, instead of borrowing all its money at interest from a private bank.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
The federal budget has been growing faster than national GDP. ... Since GDP cannot be controlled, it is spending that must be controlled. Period and end of debate.
While the poster correctly identifies that the key to measuring the amount of sovereign debt (and deficit) is evaluating it relative to GDP, asserting the budget grows faster than GDP over any meaningful timeframe doesn't make it so. US spending on non-Social Security, Non-Medicare, Non-Debt Interest programs* is about 14.7% of GDP. Compare that to Eisenhower's administration in 1960 which turned in a budget excuding the same things (Medicare didn't exist yet) of 14.2%. It is perfectly reasonable to discuss budget growth outstripping GDP growth, but that isn't empirically what is occuring (again, excluding medicare - that is a legitimate long term underfunded issue that will either require cuts, taxes, or significant changes in health care spending trends to address).
The only undisputable portion of the above is that we take in less in revenue than we spend in outlays, but that doesn't mean that the only way to address that is with less spending, although that is one viable option. Increased revenue or simple GDP growth would also both address this issue.
For those wondering, James Kwak lays this out nicely in The Atlantic and he offers links from the CBO to back up these numbers - but you don't have to take my word for it (with a shout out to LeVar Burton!):
http://www.theatlantic.com/business/archive/2011/07/our-real-deficit-problem-has-nothing-to-do-with-traditional-government/242442/
*For reference, we exclude Soc Sec due to the fact that it has a separate dedicated tax system, medicare b/c it didn't exist at the comparison point, and Debt Interest b/c it doesn't measure the size of government programs.
It is most definitely a tax.
The first person who spends the devalued money does so without inflation, it is only as the money enters circulation that the inflation becomes apparent and the value of the money decreases. The people who lose are those at the bottom of the pyramid, furthest away from the fountain of money. Typically those on fixed incomes, the poor, pensioners, wage earners who's wages increase at a lower rate than the rate of devaluation etc.
Those who benefit on the other hand, are those who hold assets, they simply inflate in value. Stocks, shares, houses, commodities; oil, gold etc. There is nothing magical about "growth" or stock market increases, it's all simple devaluation of the currency.
Deleted
If I loan you a thousand dollars, you are not "in debt" until you spend that money on something I can't or won't accept as repayment, like your vacation.
Question about this particular point: what about interest on the loan?
We already do this, but you don't need to actually print money to "print money."
It's called computers.
A
The Republicans are boycotting all plans that place the slightest tax burden on rich people, hoping to chicken the administration into agreeing to its cuts to social spending. They do this because they know that while they wield enough power to obstruct the government, it's Obama's face in the news when the shit hits the fan, or the government takes ridiculous measures like this.
Like most good things, this had been anticipated by Terry Pratchett, to be specific in "Making Money".
He should claim prior art and if they don't cave in, hit them with his word. Made of meteoric iron. That he forged himself.
In effect, the interest adds to the cost of what you are buying. Nobody would take a loan and put the money under his mattress, but if you *did*, then yes, you'd be going into debt for the privilege of paying interest.
Note that businesses often take loans because the inflated cost is offset by the advantages of keeping their cash working in other places. I once had a rich kid working for me who bought a yacht with a bank loan. For most of us that would be stupid, but *he* did it because the loan interest was less than his investments were making.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
The U.S. does something like this, then the next thing you know, Sean Connery and Milla Jovovich are wearing black spandex and coming in through the roof.
Make it, say, a roll of $100 billion coins, that way when they get caught, one of the coins is lost in Milla's undies and they still get away rich.
A $5T coin? You could spend $100B on the ultimate heist and still turn a tidy profit.
Fencing it might be hard, though.
If I wanted a sig I would have filled in that stupid box.
mint money instead of print it?
No, the courts are the protector. Any such law is unconstitutional because it violates your right to property which is the original right that governments are supposed to protect.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Excellent summary. I hope you get +5 Informative.
http://en.wikipedia.org/wiki/The_Trouble_with_Trillions
http://en.wikipedia.org/wiki/Twenty-seventh_Amendment_to_the_United_States_Constitution
Changes in Congressional salaries can't take effect until after the next election. (The main idea was probably to keep congresscritters from immediately voting themselves raises, but the wording prohibits 'varying' rather than 'increasing'.)
However, ancillary Congressional expenses (staff, facilities, etc.) presumably could be cut.
You're right that it's a symbolic gesture of only a few million out of several trillion, though.
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
Read up on the term "money as debt" on the internet and it should be clear that there needs to be either a major debtor or an issuer of currency. The Europeans have constructed their ECB such that it is not supposed to issue too much currency, as not to cause inflation. As a result, they now face a state debt crisis in their weakest countries.
I fully agree that state debts should be kept as low as possible, but switching from printing tons of money to printing nothing would strangle the US economy.
It is sad that the republican party has encouraged "teabaggers" such that now these people form the base for their attempt to overly cut state debt and embarras Obama.
Hey don't blame me, IANAB
http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
3. The two "unfunded" wars.
These are wars the Democrats have embraced and extended.
In addition, there is a "kinetic action" that was wholly from a Democrat...
And you want to tag this on Republicans? How two years ago.
1. The Bush tax cuts.
Even a child knows if you ended them the government would have less revenue as a result. So when they need more money, why are you seeking to give the government less? Both Republicans and Democrats agreed to extend them, so you are pinning this on Republicans why exactly?
Basically once one party starts something and the other party extends the same thing, you lose all ability to blame one party only for that problem.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
How does stating the government must balance a budget (the only difference now between Republican and Democratic plans) have any benefit to someone with an "ulterior motive"?
You know what, I don't care, that's my motive too - a government that balances a budget. It works for a lot of states so it's the right time to have this at the federal level, and it's obvious the federal government cannot be trusted to continue without control.
People seem overly fond of government regulation on our lives, why not regulate the government too?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I'm going to detour from the Dire Straits references for a bit and make a Black Sabbath reference: Tony Iommi downtuned his guitar for the Master of Reality sessions to alleviate some stress on an injured hand. (Non-injured bassist Geezer Butler mirrored the move) Though I doubt you'll have as much luck as he/they did, try that. :)
I listen to both RIAA and non-RIAA stuff if I like the music, tangential business/politics nonwithstanding.
Your mission, should you choose to accept it, is to steal the $5 trillion coin held by the Federal Reserve. If you are captured or killed, the Secretary will disavow any knowledge of your actions. This message will self-destruct in 10 seconds.
Be who you are...and be it in style!
Austrians: Even Milton Friedman did not think that theory had much to do with reality
That theory? What theory is Austrian theory?
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The government takes about $200 billion dollars a month, of that $20 is debt service. That leaves $180 billion. They problem is that government spends more than it takes it. It's going to have to cut $150+ billion a month. Smaller government is not a bad thing. Also, Obama has no plan, he just criticizes other. And Obama says we all have to sacrifice, what about the 47% of tax payers who don't pay any? When are they going to sacrifice. The top 10% of taxpayers pay 70% of the taxes and 47% pay nothing. The is the travesty. This is a crisis created by Obama and the Democrats and their obsession to spend. Obama running up huge deficits and now blaming the conservatives who want to restore the financial credibility. Obama deserves all the negatives from this.
And wipe out the real economy even faster, which is already tanking.
It's pretty clear that the Fed or a proxy of the Fed is already buying a significant percentage of new issues in order to keep the interest rates down.
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See, I remember distinctly that the Nobel price for economics, a few years back, went to some guys
Yeah, that worked out so well for Al Gore, I'm sure these guys are equally informative.
Made you believe in economics as a hard science! Ha-Ha!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The states will all be raising the legal blood alcohol limit in order to reduce drunk driving incidents.
I read Slashdot for the headlines, because the headlines, unlike the articles, are usually original and never duplicated
The Republicans have passed two bills now trying to prevent default. Bills you could read, and see way was going on.
The Democrats have one bill - that you are not allowed to read - that even they refuse to vote on until the very last minute (the Republicans said they would vote on it immediately so work on a true compromise bill could begin).
So just who is trying harder to compromise here? The Republicans are trying different things in the open, the Democrats are coming up with a bill in secret that does only what they want with no consideration for anyone.
It's unfair to blame Republicans for anything when they are the ones doing all the hard work of producing real bills to vote on that try and satisfy both sides!
Currently about the only difference is the Republican bill wanted a balanced budget amendment. Is that so insane? Lotys of states have them. The limit can be overridden by majority in times of need, but in normal times it provides a degree of control that Washington has shown is required.
Many here seem to think that out of control companies need more regulation. Well then why not regulation for an out of control government?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Argue the difference!
MintCoin a store of value and store of currency .vs.
Statute of Limitations: valueless and currency stop
Tying a government's hands is ludicrously insane.
It sure would be. Which is why the thirty or so states which now have balanced budget amendments include a means for a super-majority to vote for additional debt to be taken on in times of crisis.
The states that have such an amendment are doing fine; Those without (like California) are failing. It's pretty clear we need this badly at a federal level since both Republcians and Democrats cannot keep hands out of the cookie jar.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The Fiat currency, known as Federal Reserve Notes, isn't real money to start with. It is a promissory note created out of thin air and issued by a private organization called the Federal Reserve and loaned with interest to the US Government. The Fed is owned and operated by a small number of global families that control the world's currencies. They have systematically bankrupted 100's of countries throughout history and they are mopping up the final ones now. "Seignorage" is just another brain dead uncollateralized loan scheme. Very few, if any, reading this have ever been paid in "real money". Before 1913 we had real money, Gold and Silver, and virtually zero inflation. Real money has inherent value - Fiat currency doesn't. Because of the ever-increasing printing of Federal Reserve Notes the value of a Dollar Today is worth less than two cents compared to 1913. These notes are an extension of credit backed by all the wealth of the issuing country. Your Car, Your House, Your Retirement, Your Bank Accounts, everything you have including YOU yourself have been pledged as collateral against the debt. This fraudulent debt created out of thin air can never be paid back! ALL the wealth and resources of the entire planet can't cover the derivative escalated $1,500 Trillion dollar debt. And the corrupt criminal banksters are here to collect. It's time to wake up, reclaim your Sovereignty, through off the slaves shackles and end them or they will end you. They have committed unspeakable crimes and must see their plans through or go to prison or worse. They know it! Now so do you! WAKE UP!
"I think we'd see the same effect that we saw after WWII, when there were similar fears. "
After WW2 the US was the only country with intact manufacturing capacities. Europe, Russia, Japan, China were in rubbles.
At some points, Americans and the American government are going to have to face reality: You can't keep living beyond your means indefinitely.
One or more of these three things will happen, whether Americans like it or not:
Unfortunately, given that in the US political system it's impossible to make hard decisions, the balance between 1, 2 and 3 is likely to be sudden and sub-optimal.
Well the Democrats are boycotting all plans that reduce spending and that benefits everyone.
So that pretty much equates to the Democrats being the Greater Dick here.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
A $5 trillion coin?
Hmmm... reminds me of this....
To agree with you: http://www.eco-action.org/dt/affluent.html ... The world's most primitive people have few possessions. but they are not poor. Poverty is not a certain small amount of goods, nor is it just a relation between means and ends; above all it is a relation between people. Poverty is a social status. As such it is the invention of civilisation. It has grown with civilisation, at once as an invidious distinction between classes and more importantly as a tributary relation that can render agrarian peasants more susceptible to natural catastrophes than any winter camp of Alaskan Eskimo."
"The Original Affluent Society... Hunter-gatherers consume less energy per capita per year than any other group of human beings. Yet when you come to examine it the original affluent society was none other than the hunter's - in which all the people's material wants were easily satisfied. To accept that hunters are affluent is therefore to recognise that the present human condition of man slaving to bridge the gap between his unlimited wants and his insufficient means is a tragedy of modern times.
And "The mythology of wealth"
http://www.conceptualguerilla.com/?q=node/402
"All of the "laws, ordinances, customs and usages" that regulate control over resources and relationships between people -- including their business relationships -- are nothing more than a set of rules invented by the imagination of some human being -- frequently one who has been dead since the middle ages. Those rights are frequently exchanged for -- get this -- printed pieces of paper with pictures of dead people on them. Where is the value of those pieces of paper? The answer is in your mind, in the mind of the person you are "bargaining" with -- and nowhere else. Itâ(TM)s all a big game. It is our mythology, and it is no more real than belief in Zeus, Hera and Aphrodite."
On the wheels coming off our system (scary, but incomplete as it ignores automation and the general decline of the paid value of most human labor, so it will be worse):
http://www.aftershockeconomy.com/
http://w3.newsmax.com/a/aftershockb/video.cfm
On moving beyond that (by me):
"Five Interwoven Economies: Subsistence, Gift, Exchange, Planned, and Theft"
http://www.youtube.com/watch?v=4vK-M_e0JoY
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
This isn't just inflation as some people think. It's not as simple as flooding the market with dollars. Or globally transferring actual value from every dollar holder equally to the US government. This is eroding one of the foundation pillars of what make America better than the other options (notice I didn't say "best" or "great"). You would lower the confidence in the dollar globally.
The only reason we are not in a worse shape than the rest of the world is because we suck least. Our government's financial management is piss poor, but it is still in the top 5. Not because it is good, but because everyone else is worse over the long run. But we have one more thing going for us, we don't mess around with the dollar... much. Not as much as say other countries with their currencies. When you put the currency + country, you still have crap, but it is the least stinking pile around. So if you have some wealth or real value, cause the world economy isn't booming, your current options are either to maintain value (buy things worth more to you) or lose it as slowly as possible (gold, savings, checking, stocks, etc). And all these things are done using the dollar.
America currently has a natural subsidy funded by all the other currencies in the world, we don't pay much transaction costs for buying oil and many other commodities. Countries like UK, Germany, India, & China not only need to buy the oil just like us, but also need to pay additional for the translation of dollar to their local currency. If the dollar is replaced as the global currency, America will be facing massive transaction costs on top of the inflated prices. This will last decades.
You mess around with the dollar's value directly (printing vs loans & trade balances), people will stop believing in the dollar and start looking at alternatives. Once that happens, the alternative has inertia to stick around and becomes difficult to replace (just like the dollar today). The Euro is actually better than the dollar, but not better enough to over come the transaction cost of dethroning the dollar. You mess with the dollar, the Euro isn't the problem, but rather India & China who hold the greatest Dollar debt in the world. They will have every incentive to create their own currency and cause they hold so much Dollar debt, they have the weight to replace it too. Currently it just isn't worth it for them (not cause financial & economic reasons, but sadly... cultural) cause they have a dependable currency to do transactions.
In a US default, only the lenders to the US government take the hit. This is China, India, some EU countries, and for the largest part... the US citizen (we hold the largest US debt). In printing dollars, everyone takes the hit. By hitting everyone, we get them all moving to create a dependable alternative.
If we default, or print money, the result will be pretty much the same. Everything becomes more expensive, our savings lose value, all loan & credit rates increase, and economic growth will be suppressed. Either way, the US would become just another country that took a bit longer to realize it. But devaluation via a default, our products will be cheaper globally, the economic suppression will be offset by exports, in a few years investors will lend to the US again (maybe not the government, but to our businesses), and we will recover to a boom what historians will someday call a "short time".
However, print money, and you are risking replacing the dollar. In which case, the offsets never happen. Our export transaction costs to a foreign currency will keep our exports expensive, and investors won't invest in the US government nor businesses when there is a better global alternative. Our recover will take a long time, long enough for other economies to cement themselves as the new leaders & innovators of the world. A position we will take as long to regain as they did to take from us (and only if they screw up like us).
Am I the only one that cannot get over a mental mispronunciation of the name Boehner?
Tsk!
Carol vs. Ghost
like, just before 1945?
http://cneh09.dal.ca/Schenk_CNEH.pdf
every day http://en.wikipedia.org/wiki/Special:Random
... it only has ONE huge problem: I think that our government, meaning OBAMA and the REPUBLICANS and quite a few DEMOCRATS, are actually TRYING to get the US to go into default.
The Robber Barons, who pay for these elections in our pretend representational government, WANT higher interest rates. Coming up with an excuse so that the bond rating agencies can lower our value, puts the US in the same debtor class as many third world countries.
>> The other issue here is that I WOULD LOVE, for the Treasury to go back to minting coins. The Federal Reserve is a clutch of bankers,... and all our money is created out of debt TO THEM -- so we cannot really pay it off. However, in the Constitution -- it's required that "Congress" shall mint coin -- and they do -- just not the dollars. When President Carter came out with the Susan B. Anthony silver dollar -- it sent a quiet shockwave through the halls of the Banksters -- and I think that's what started their animosity towards his administration -- who can say, really?
If all US money were coins -- ONLY Congress could print money. But since they are actually promissory notes -- this allows for an end-run around the Constitution via a technicality. Following the letter of the law but not the spirit.
>> This nonsense argument is merely a way so that Obama can trade what is left of his manhood and Social safety nets to the Republicans for a ride on their magical Unicorn of economic prosperity. How long now, have we been pretending that "trickle down" from lower taxes on the Wealthy is going to turn into jobs and growth for our economy?
>> Instead of increasing taxes to make up for the REVENUE shortfall -- how about increasing Tariffs on imported goods. China and India charge 40% and 20% respectively for imports versus our 2% charge. Imports cost us jobs -- so we should at least throw out that "myth" that higher tariffs will hurt our "global competitiveness.
But none of these ideas will work -- because the Democrats and Republicans have been playing "good cop --- bad cop" for over 30 years and now we have "bad cop -- insane cop" ... so really, the "ideas" aren't going to work, because the GOAL is to make us all indentured servants.
Obama could have pushed for trillions in stimulus and we could be building light rail and a new energy infrastructure -- easily dealing with the "unemployment problem." Raise the minimum wage a dollar an hour for the next few years as well.
>> And please, Libertarians, I already know your rebuttals. Your philosophies come out of the same corporate-backed think tanks financed from the same companies that populate the US Chamber of Commerce -- which is mostly transnationals that profit from outsourcing jobs.
>>"ad space available -- low rates!!!"
2. Medicare Part-D drug benefit (which prevents Medicare from negotiating bulk prices).
I forgot to mention this bit of absurdity, blaming Republicans for this when the Democrats forced Bush to sign it - kind of like how the Democrats are insisting we raise a bunch of taxes to increase the debt limit now...
I disliked Bush for caving in on that, just as much as the other fiscally idiotic things he did. Only now you have a whole party of Democrats that is acting just as stupidly and refusing to see that we need to reduce spending, instead of raising taxes to pay for more frivolity.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This is a terrible idea. But if Congress continues to be deadlocked, this may be the *only* legal option available to the administration.
The news is full of people saying that, come August Xth, the Treasury will have to "pick and choose which bills to pay." But I don't think that's legal. The 2011 budget is a *law*. The administration must pay the amounts listed in that law to the correct parties, or it is breaking that law. The administration must also obey the tax code laws, and the debt limit law.
If the administration wishes to obey all three of these laws, its *only* legal option is seigniorage. Yes, it will create inflation. But it might be the only way out.
We call that a "technical default" through currency debasement. If you owned US treasuries and were now getting paid back in this play money, you'd just call it a default plain and simple.
Oh yeah (duh!) thanks. Sorry, with all the talk about the "gold standard" I jumped to that conclusion.
Still, that would take a lot of Pt, even if the coins were in $1k denominations. Does the statute require that they use pure Pt, or could they use an alloy or plate process?
Either way, I like this idea! It would be nice to see the gov't printing its own cash for a change, instead of borrowing all its money at interest from a private bank.
They already covered this, skip producing them in $1k denominations, print one at $5,000,000,000,000 denomination.
WARNING! This girl exceeds the MAXIMUM SAFE standards established by the FDA for BRATTINESS
The British constitution has the "right of property" -- in the US Constitution -- it's "Life, Liberty and the Pursuit of Happiness."
You don't actually have a Constitutional Right to the value of your property.
>> And Defaulting on the debt is going to devalue our currency in a more sudden, and bigger way than merely printing more money like we've been doing for quite some time now.
>>"ad space available -- low rates!!!"
This isn't the budget, the budget is already passed, the only way to unfuck the deficit is with tax hikes, start with mirroring the bush cuts as tax increases instead
Snowden and Manning are heroes.
I hate Ron Paul because he is NEVER Right.... ... he's only amazing to people who've got a Business 101 understanding of Economics.
Nations, when they hit the debt to GDP ratio have NEVER come back
We aren't any worse off with this ratio than when Reagan was in office wrecking the economy...
Obama and a sane congress, could raise the debt ceiling, and pay off the creditors for another quarter and we would be fine. The dollar would not change much at all -- it's the only game in town after all, and all the countries like China that loaned us money, don't want their "dollars" being devalued either. Long term -- sure, it's going to hurt us, as the Creditors slowly turn their dollars into assets -- like our roads and buildings.
They could start a Public Works project, and build light rail, so that people can get to work, without killing the ecosystem in cars and going into debt for a vehicle.
>> EVERYTHING that we are told by the "Business 101" geniuses, that would hurt our economy -- is what CREATED the greatest economy in the world. Instead of the TSA -- which is a public works project -- we could be putting people to work adding parks and solar collectors -- ANYTHING, besides feeling up kids and sniffing people's shoes. If America got out of the War business -- fewer people would want to blow us up.
The ONLY thing that is really going to save our economy, is a New, New Deal -- more SOCIALISM. But let's pretend all the crooks who've been bullshitting us and screwing the Middle Class for decades now, have anything useful to say for another few years. Let's ignore history and real prosperity, and sell off all the public assets to the same people who PAID for Rush Limbaugh and all the "Think Tanks" who peddle this nonsense.
>>"ad space available -- low rates!!!"
You are living 30 years ago. The USA makes corn to feed livestock, turn into sugar and alcohol to fuel cars. They make soy, mostly for export. There is some oil harvesting, but with the recent oil spill in the Gulf of Mexico, that's not as much as it was anymore. They make cars, at a loss. They sell some software and ehr... thats it. The most profitable agricultural produce of the USA currently is marijuana. Yes, there's no tax income on that, but both per acre and totaled, this is what's making the most money in agriculture.
You may be laughing at Zimbabwe, but 2/3 of Africa has less debt per person than the USA. over 10% of the citizens of the USA (yes, citizens, not counting the millions of illegal aliens) lives in official, UN certified poverty. The USA is spending more than 20 percent of it's money on wars fought outside of it's own borders. About the same amount of money is spent on spying, black ops and non-directly war related defense costs. All that fighting, black ops and "defense" isn't helping the US economy by producing something you can eat locally, or sell abroad.
The USA economy is shrinking. Maybe the USA should stop spending so much money abroad and on war, paranoia and keeping arms traders rich and powerful. You can't eat weapons. You can't eat your suns and daughters returning home in a body bag. You can't eat DRM, patents and law suits. It won't be long before people in the USA will just be too hungry to care for all these things anymore.
I was promised a flying car. Where is my flying car?
It would work if the USA government would have any control over the value of the USA dollar. Most of those aren't owned by the USA or any of it's citizens. Most debt and "virtual money" is actually owned by foreign companies and investment funds. If China wants to break the US dollar, they can. If the Arabs or the Japanese want to break the US dollar, they can. They don't want to, because they want to sell goods to the USA and if the US dollar falls, the USA won't be able to afford the products anymore. The dollars are spent, in the USA. More and more of corporate USA is owned by foreign companies. The only way to counter this, is for the USA to stop spending it's money outside it's borders and start producing their own goods again. Sure, the dollar will drop in value, so the foreigners will be able to still sell their products, but that will end once the US starts exporting again. Then the dollar will increase in value again, because the products you can buy are worth it.
I was promised a flying car. Where is my flying car?
Still, that would take a lot of Pt, even if the coins were in $1k denominations.
You still miss the point. The denomination is whatever they want it to be. They can literally mint a single coin that says that it's worth 5 trillion dollars.
This sounds like the kind of crackpotedness my conspiracy-theorist friend would come up with. You know the kind of fellow I mean, the one that has all kinds of things to say about the Federal Reserve and probably watched the Zeitgeist movie too many times. I mean, I understand the legal theories behind it, but it seems too off-the-wall to be something that is actually happening.
For optimal comment enjoyment, take red pill now.
I didn't know the pop machine would take it as a quarter.
Have gnu, will travel.
--just take half the gold in Ft. Knox. Issue gold certificates backed by it at a value such that the debt is paid; but don't allow redemption.
Then there's the punster solution:
Get 14 $1 bills. Tear them in half. That's 14 terabucks.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
From wikipedia, http://en.wikipedia.org/wiki/United_States_federal_budget
Defense and Discretionary spending together accounted for 39%.
Individuals and SS together accounted for 82% of revenue while Corporations paid 9%.
Th right fix is to cut down Defense and Discretionary spending to less than 10% of the total and save over 1G$
Increasing corporate taxes and reducing individual taxes is the 100% logical solution to increase revenue and make peoples' lives less miserable despite all the horse shit spread by all sorts of "thinkers" and "theorists".
The problem with minting a five trillion dollar coin, is that creating an object that small that has that much value makes it the most collectable item ever, and just who do you trust to keep something like that safe. I would bet real money that it would simply disappear in the middle of the night... Something like that has the power to warp the very fabric of space and time. Only one man was ever born that could withstand that kind of temptation, and he died, then just sort of floated away like this coin would, IMHO.
Thank you too, in return. I just used that point on fish and water writing to someone else today, coincidentally.
I've been trying to get Richard Stallman and the FSF to consider supporting a campaign (suggesting maybe run by me for pay, so I'm biased, but OK if it was someone else) for fostering the cataloging, creation, and discussion of free software that explores conventional and alternative heterodox economics for a 21st century of abundance for all, based on this appeal:
http://www.responsiblefinance.ch/appeal/
"The authors of this appeal are deeply concerned that more than three years since the outbreak of the financial and macroeconomic crisis that highlighted the pitfalls, limitations, dangers and responsibilities of main-stream thought in economics, finance and management, the quasi-monopolistic position of such thought within the academic world nevertheless remains largely unchallenged. This situation reflects the institutional power that the unconditional proponents of main-stream thought continue to exert on university teaching and research. This domination, propagated by the so-called top universities, dates back at least a quarter of a century and is effectively global. However, the very fact that this paradigm persists despite the current crisis, highlights the extent of its power and the dangerousness of its dogmatic character. Teachers and researchers, the signatories of the appeal, assert that this situation restricts the fecundity of research and teaching in economics, finance and management, diverting them as it does from issues critical to society."
Also related indirectly:
"RSA Animate - 21st century enlightenment "
http://www.youtube.com/watch?v=AC7ANGMy0yo
So, it is more than a lack of visionaries. The world has no shortage of would-be visionaries, like Paul Hawken documents:
http://www.blessedunrest.com/
"Paul Hawken has spent over a decade researching organizations dedicated to restoring the environment and fostering social justice. From billion-dollar nonprofits to single-person dot.causes, these groups collectively comprise the largest movement on earth, a movement that has no name, leader, or location, and that has gone largely ignored by politicians and the media. Like nature itself, it is organizing from the bottom up, in every city, town, and culture. and is emerging to be an extraordinary and creative expression of people's needs worldwide."
The problem is more like visionaries are filtered out or bought off or changed or isolated or starved or turned into wage slaves doing unrelated stuff to survive. Example:
"The murdering of my years: artists & activists making ends meet"
http://books.google.com/books/about/The_murdering_of_my_years.html?id=iBA7vACOwngC
Related articles on how dissent in academia is systematically suppressed:
http://disciplinedminds.com/
http://www.chomsky.info/articles/199710--.htm
http://www.its.caltech.edu/~dg/crunch_art.html
Yet, things progres anyway, as a tribute to the better side of human nature. Here are examples of GPL'd software that could serve as a base for moving further into exploring alternative economics:
http://p.seppecher.free.fr/jamel/
http://freeciv.wikia.com/wiki/Main_Page
http://www.ryzom.com/en/
There is also a lot of other softwar
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
If you haven't diversified out of dollars and into something else by now, you are screwed.
Well, it's a surely a good thing then that my investment is my house (real estate!).
Devaluing the dollar might be one way to end the real estate crisis!
Who is going to buy $1.6 trillion of bonds from a country on the verge of defaulting on its existing debts and/or lowering its credit rating?
A more general idea along those lines: http://en.wikipedia.org/wiki/Basic_Income_Guarantee ... Winners of the Nobel Prize in Economics who fully support a basic income include Herbert Simon, Friedrich Hayek, James Meade, Robert Solow, and Milton Friedman."
"A basic income guarantee (or basic income) is a proposed system of social security, that regularly provides each citizen with a sum of money. In contrast to income redistribution between nations themselves, the phrase basic income defines payments to individuals rather than households, groups, or nations, in order to provide for individual basic human needs. Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it. The U.S. Basic Income Network emphasizes this absence of means testing in its precise definition, "The Basic Income Guarantee is an unconditional, government-insured guarantee that all citizens will have enough income to meet their basic needs."
If we took half the US GDP, that would be around US$2000 a month per person. The other half of the GDP, equivalent to what it was in the mid 1990s, would presumably be enough to motivate some people to work more who wanted more than that. As a plus for conservatives, we could get rid of the minimum wage law and various other things like that which so many US Republicans hate, given workers would no longer need so much protection as they could decide to live off the basic income or use that money to start their own business.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
It's a good idea. See:
"How to Do Agent-Based Simulations in the Future: From Modeling Social Mechanisms to Emergent Phenomena and Interactive Systems Design "
http://www.santafe.edu/media/workingpapers/11-06-024.pdf
"Since the advent of computers, the natural and engineering sciences have enormously progressed. Computer simulations allow one to understand interactions of physical particles and make sense of astronomical observations, to describe many chemical properties ab initio, and to design energy-efficient aircrafts and safer cars. Today, the use of computational devices is pervasive. Offices, administrations, financial trading, economic exchange, the control of infrastructure networks, and a large share of our communication would not be conceivable without the use of computers anymore. Hence, it would be very surprising, if computers could not make a contribution to a better understanding of social and economic systems. While relevant also for the statistical analysis of data and data-driven efforts to reveal patterns of human interaction, we will focus here on the prospects of computer simulation of social and economic systems. More specifically, we will discuss the techniques of agent-based modeling (ABM) and multi-agent simulation (MAS), including the challenges, perspectives and limitations of the approach. In doing so, we will discuss a number of issues, which have not been covered by the excellent books and review papers available so far. In particular, we will de- scribe the different steps belonging to a thorough agent-based simulation study, and try to explain, how to do them right from a scientific perspective. To some extent, computer simulation can be seen as experimental technique for hypothesis testing and scenario analysis, which can be used complementary and in combination with experiments in real-life, the lab or the Web."
And also:
http://www.brookings.edu/topics/agent-based-models.aspx
Or what I started almost a decade ago, but then had a kid and left on the back burner:
http://savannah.nongnu.org/projects/simulchaord
"This project is mainly to develop simulations of chaordic organizations, processes, and systems under the GPL license, with "chaordic" used as defined by Dee Hock at http://www.chaordic.org/ and in his book "Birth of the Chaordic Age"."
Something on the idea of a campaign to get more free software written about manstream and alternative economics:
http://slashdot.org/comments.pl?sid=2356864&cid=36936914
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
"The problem is that government spends more than it takes it."
Due to borrow and spend conservatives launching war rackets of choice?
http://www.lexrex.com/enlightened/articles/warisaracket.htm
Instead of tax and spend liberals who at least pay more as they go?
"Smaller government is not a bad thing."
Unless government is too small to account for externalities through taxes, subsidies, and regulation?
http://en.wikipedia.org/wiki/Externality
And so we pay in our health bills and tax bills (and even inability to eat wild-caught mercurly laden fish) on the back-end the costs we should be paying up-front at the gas pumps and electrical outlets and supermarkets, in which case renewables would have been cheaper than fossil fuels since the 1970s and we would not be having such a health care crisis?
http://en.wikipedia.org/wiki/Brittle_Power
http://www.seriouseats.com/2007/11/the-subsidized-food-pyramid.html
http://www.drfuhrman.com/library/foodpyramid.aspx
Or getting scammed by heart surgeons?
http://www.drfuhrman.com/library/PCI_angioplasty_article.aspx
And scammed by dermatologists who are causing by some estimates 30 cancers for every melanoma they prevent?
http://www.vitamindcouncil.org/health-conditions/cancer/
Due in part to lack of adequate investment in public health research?
Do US Republican generally wanting to privatize gains and socialize costs make them the worst sort of socialists?
"Also, Obama has no plan, he just criticizes other."
I agree that Obama has been a terrible president so far. He blew his chance to make big changes in the first few days by trying to negotiate with idealogues who would rather destroy the USA than lose an election. He could have just declared medicare covers anyone of any age his first day in office (as in, not enforcing age limits), and then moved on from there to ensuring everyone had a basic income (social security for all, withotu age limits) even if there are no more jobs, and moved on from there to bringing our troops home and shifting the US defense budget to the space program. :-)
Related: ... The most fundamental problem with [propertarian] libertarianism is very simple: freedom, though a good thing, is simply not the only good thing in life. Simple physical security, which even a prisoner can possess, is not freedom, but one cannot live without it. Prosperity is connected to freedom, in that it makes us free to consume, but it is not the same thing, in that one can be rich but as unfree as a Victorian tycoon's wife. A family is in fact one of the least free things imaginable, as the emotional satisfactions of it derive from relations that we are either born into without choice or, once they are chosen, entail obligations that we cannot walk away from with ease or justice. But security, prosperity, and family are in fact the bulk of happiness for most real people and the principal issues that concern governments. [Along with health and community.]"
http://www.amconmag.com/article/2005/mar/14/00017/
"This is no surprise, as [propertarian] libertarianism is basically the Marxism of the Right. If Marxism is the delusion that one can run society purely on altruism and collectivism, then [propertarian] libertarianism is the mirror-image delusion that one can run it purely on selfishness and individualism.
And:
"The Market as God: Living in the new dispensation"
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Horseshit! The MMA was notorious for the underhanded, high-pressure way it was rammed through Congress by the Republican leadership. Perhaps this piece from Forbes will refresh your memory:
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
US President, Administration, Congress and Judiciary have failed to lead America.
They should cut 50% of their salaries and other entitlements.
The issue isn't that they're really worried about running out of money. There are tricks that can be pulled to keep spending money that they don't have.
The problem is that the Tea Party backed Republicans aren't going to give Obama the ability to spread the blame around for it. The Obama administration can pull the platinum coin trick, there is at least one other legal method he can employ to keep spending money. The problem, for him, is that next year the Republicans are going to hammer him on the issue. If the Republicans stand strong and force him to employ other means of spending the money, they'll deal themselves a trump card for next year's elections.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Exactly. Apparently SuperKendall hasn't heard the news that even supply-siders are abandoning the ridiculous Laffer Curve claims that tax cuts always increase revenues.
Sure, it may have worked when Kennedy dropped the top marginal rate from 89% down to 76%, or when Reagan cut it down to 70%, but we've reached the point where there's nothing more to be gained from further cuts. (Reform would be great, and could bring down the rate while increasing revenue, but just blindly cutting more won't help anything.)
Judging by economic performance, job growth, budget deficits and debt growth, I'd say Clinton came pretty close to hitting that optimal balance you describe. (Too bad he signed the Gramm–Leach–Bliley Act though. What a disaster that turned out to be.)
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Yes they could do that, but nobody would accept such a coin. It's useless as a medium of exchange. But if they made the coins in denominations small enough to circulate, this scheme could scheme could actually work.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Yes they could do that, but nobody would accept such a coin. It's useless as a medium of exchange.
It doesn't have to be a useful medium of exchange. The only guys required to accept it - and even that only once - would be the Federal Reserve.
Regardless of how many stunts are pulled, the truth is the USA is bankrupt. You can only put off the inevitable for so long. The US can never repay it's debt therefore the $ is a failed currency.
If they minted actual currency that could be spent into the economy that would expand the money supply in a more tangible way. Whereas the single-$5T-coin idea would lack credibility, seeming like a "clever" parlour trick.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
I would point out that not all of the increase can be attributed to the sole inflationary effects of printing money. Energy prices have gone up as a result of the law of supply and demand, which has had a large direct or indirect on effect on the commodities you list.
I had trouble NOT reading it as that !
while (true != false) process_more_stupid_code();
This isn't new, nor a loophole. It's done every day already. It's called paper currency AKA the greenback AKA the dollar. And, yes the government can, will, and already has been printing additional money to pay debts and obligations. When you do the math, it takes more blind faith to believe in government than God.
Need permanent solutions.
1) The budget is LAW. Not raising the debt ceiling breaks the law. And as a minor side effect fucks old people, veterans and any one else who uses the services that we'd have to cut. Oh, and one other piddling matter of fucking the global economy. But what's really important is not raising taxes, right?
2) But that's a band aid. The real problem is that our money is debt. Raising the ceiling delays the next raising of the ceiling. We have to change our money.
3) There's a solution called the Monetary Reform Act. It would wipe out the debt and put us on the road to a balanced budget. i'll assume you know how to use google.
Step 1) End the Federal Reserve. 2) End fractional reserve lending. 3) treasury dept takes over minting. 4) ??? 5) Profit and enjoy debt free money with imperceptible inflation and no more boom/bust cycles.
Watch:
Money As Debt
The Money Masters
Add layers of tin and aluminum foil to your hat.
Utilizing the synergization of benchmark e-solutions to pre-workaround action items!
He's self centered because his parents raised him to be a self centered prick. All of the debt the the ceiling has to be raised for is due to Bush's two wars, handouts for the wealthy and a smaller amount of medicare B. Of course, self important pricks don't have any problem with spending a fortune on wars, since they think they can steal their stuff afterwords, but throwing granny out onto the street simply because you are too much of a leach to pay for the society that you've leached off of for your entire life is beyond the pale.
Most wage earners will be unaffected. Only those who hold plenty of currency will be impacted.
I'm in complete favor of the administration ducking around the political deadlock that comes from politicians trying to use this crisis as leverage, holding the country's economy hostage in exchange for pushing through their pet policies.
Our representatives should be ashamed of themselves.
"That makes a lot more sense than "quantitative easing" which prints the same amount of money just to give it to a few banks, who then lend it out at rate 10 times that at which they borrowed it."
You've probably seen this, but if not, you might like it:
http://www.moneyasdebt.net/
Parts are on YouTube, and in Money as Debt II there is a great animation of people on a treadmill as debts are created. There is also a section on the "casino economy" where much money ends up just betting on currency fluctuations and such, and is unavailable for transactions in the physical economy.
I liked your points elsewhere about printing extra money, when it is needed, creating more wealth than any inflation. The Social Credit movement argued something like that, and said the printed money should be distributed as a basic income. ...
http://en.wikipedia.org/wiki/Social_Credit
"Douglas disagreed with classical economists who divided the factors of production into only land, labour and capital. While Douglas did not deny these factors in production, he believed the "cultural inheritance of society" was the primary factor. Cultural inheritance is defined as the knowledge, technique and processes that have been handed down to us incrementally from the origins of civilization. Consequently, mankind does not have to keep "reinventing the wheel". "We are merely the administrators of that cultural inheritance, and to that extent the cultural inheritance is the property of all of us, without exception." Adam Smith, David Ricardo and Karl Marx claimed that labour creates all value. While Douglas did not deny that all costs are ultimately due to labour charges of some sort (past or present), he denied that the present labour of the world creates all wealth. Douglas was careful to distinguish between value, costs and prices. He claimed that one of the factors leading to a misdirection of thought in terms of the nature and function of money was economists' obsession over values and their relation to prices and incomes. While Douglas recognized "value in use" as a legitimate theory of values, he also claimed that values were subjective and not capable of being measured in an objective manner. Thus, he rejected the idea that the role of money is to act as a standard, or measure, of value. Douglas believed that the role of money is distribution of production.
Douglas believed that it was the third policy alternative upon which an economic system should be based, but confusion of thought has allowed the industrial system to be governed by the first two objectives. If the purpose of our economic system is to deliver the maximum amount of goods and services with the least amount of effort, then the ability to deliver goods and services with the least amount of employment is actually desirable. Douglas proposed that unemployment is a logical consequence of machines replacing labour in the productive process, and any attempt to reverse this process through policies designed to attain full employment directly sabotages our cultural inheritance. Douglas also believed that the people displaced from the industrial system through the process of mechanization should still have the ability to consume the fruits of the system, because he suggested that we are all inheritors of the cultural inheritance, and his proposal for a national dividend is directly related to this belief."
See also for points on the breakign link between work and income, from 1964:
http://www.educationanddemocracy.org/FSCfiles/C_CC2a_TripleRevolution.htm
Anyway, more hopeful/collaborative reading that many people have long been trying to deal with this social disease of greed and fear and ignorance, even while there is plenty to go around, and more and more every day.
I don't ag
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Of course it's a trick! The whole point of this is to get around the debt ceiling - an artificial legal limit - not to do anything meaningful for the economy.
This is a serious issue, however the idea that someone like Mr. G, doing something that is less than the chance that a flea might run for congress and win.
The title might be sensational, but it belongs on the cover of the national enquirer, (no offense meant to that fine publication) but I would sooner believe that aliens have invaded than to believe that this is a constitutionally valid option, (all spending bills shall originate in the House) period, that is all there is to it folks, the constitution is clear on this matter,) A good topic for discussion but not a serious discussion,
You lost me. So the way to fix the deficit is more deficit?
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
I can't believe I'm seeing a reference to Tuff Darts. I bought a copy of Tuff Darts! for $1 in a second hand record store donkey's years ago and I thought I must be the only person in the world who had heard of them. Awesome.
Just saw Isles (previously mentioned) had some videos:
http://www.youtube.com/watch?v=3krXLJEfdhQ
http://www.youtube.com/watch?v=9WX6dcsn-fc
http://www.youtube.com/watch?v=c52hHMHsOGU
etc.
My wife and I visited Isles, Inc about 18 years ago, to talk about our garden simulator. In Marty Johnson's office he had this quote under his computer monitor: "You can't plow a field by turning it over in your mind".
Of course, if you are a computer programmer or mathematician who spends a lot of time on mental things, that adage may be a bit less true, :-) but it's still a good sentiment about engagement.
I regret now not trying harder to figure out some way we could have worked together back then.
Those videos might be inspiring as far as thinking about the value of what you are doing in Chicago and what is possible.
Although I feel we still need bigger things like a basic income or other broader shifts, too, if our economy continues to implode with rising productivity (like from robotics) coupled with limited demand from currency issues and an environmental ethic and the law of diminsihing returns on having more stuff. Stronger local communities might lead to the energy to make bureaucracies accountable again and get better policies in place?
Related about a new book on US economic problems: ... "Five years from now, mark my words -- none of the people responsible for this -- not only not be held accountable -- they will be in more important positions -- that is what would happen in Russia." Rosner pretty much agreed. "My father was a federal prosecutor and my mother was a criminologist, and her speciality was Soviet criminology," Rosner said. "As she read our book -- she kept saying -- Jesus, this sounds like the way it is done there. Every piece of it. You have an entrenched bureaucracy without accountability." Rosner said a "code of silence" protects those complicit in the recent collapse."
http://www.counterpunch.org/mokhiber07292011.html
"Gretchen Morgenson and Joshua Rosner were at the Wilson Center in Washington, D.C. this week for a discussion about their book -- Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.
That new book mentioned there echoes this old one:
"They Thought They Were Free: The Germans, 1933-45"
http://www.press.uchicago.edu/Misc/Chicago/511928.html
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security."
Stronger local communities might be able to generate more social energy for national (and global) accountability?
"Visions of a Free Society"
http://www.youtube.com/watch?v=pjHTrwCstcM
I mentionian "localism" as one way to deal with increasing unemployment towards the end here (as one of four broad apporaches including a basic income, a gift economy, and better democratic resource-based planning):
http://knol.google.com/k/beyond-a-jobless-recovery
So, all the local efforts can add up nationally. How can we expect to have healthy national politics if our local politics are non-existent or dysfunctional? (I guess the Greens have been saying that for a long time.)
W
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
"The Man who Planted Trees"
Here's a good one: My t'ai chi master, a guy name Hsu Fun Yuen, who's one of the last of the great grandmasters who brought t'ai chi to this country in the 20th century, asked me to help him buy some trees. I found a group called the Arbor Foundation, that sells trees for very low cost if you buy a very cheap ($15) membership. The trees end up being about $7 each. I'm talking about really good fruit trees, like plums, cherries, peaches.
Here's a guy who's 86, and the thing he wants to do is plant some baby trees that aren't going to bear fruit for at least maybe 10 years. That's what's known as "optimism". I hope to have that kind of outlook.
Considering the things you're trying to do, ten years, twenty...who knows? But one thing you know for sure: if you don't plant the trees, you're not going to get any fruit growing in your back yard 20 years from now. Likewise, if someone like you doesn't start doing the things you talk about, I don't like the chances for the world my daughter's going to inherit 10 years, 20 years down the road.
You are welcome on my lawn.
Been there done that. . . Barbarians got pissed. Confidence was lost. Empire Fell.
Captcha = "Poetic".
Thanks very much *takes a bow*
and been successful.
Everyone says 'Germany', but Germany has a declining population, a rapidly-aging population, 7+percent unemployment (all govs under-estimate this), an average of 1% real growth over the last 12 years, and is on the hook for all of the debts of the insolvent members of the EU, unless Germany is willing to allow all of Europe's banks to go bust.
No country who has followed Keynes' ideology has had a successful 50+ years. Many have managed to spend themselves into insolvency faster than that, Germany is just taking a bit longer.
No country has been successful managing its own economy. Slashdot's readers can easily understand why: Presented as an optimization algorithm (NP-complete in lots of dimensions) or as a control system (NP-complete, problems of density of sensors and effectiveness and sensitivity of effectors), it is clearly a problem far beyond our current intellectual capabilities.
"The Constitution, the WHOLE Constitution, and nothing but the CONSTITUTION."
Presented as an optimization algorithm, you would not be describing national economies as they really exist.
And Germany was very successful with a Keynesian model long before the EU came into existence. The fact that they are able to support the insolvent countries of the EU to such an extent is absolute proof that Keynes' model works just fine, thank you very much.
There are other countries I could name, but they'd just make you howl in protest. The fact that you believe the mathematical systems you've named even come close to describing the workings of such economies makes me believe that no amount of proof would convince you.
You are welcome on my lawn.
Thanks for the example on trees. I guess that is the value in a symbolic project like "The Long Now", to help get people thinking about that:
http://longnow.org/
I've found my optimism has increased with trying to list all the things I'm thankful for before I got to sleep each day, and also getting more sunlight (and vitamin D) and eating better, etc..
The good news is, lots of people are planting all sorts of "trees", like in that Paul Hawken book:
http://www.blessedunrest.com/
"A leading environmentalist and social activist's examination of the worldwide movement for social and environmental change
Paul Hawken has spent over a decade researching organizations dedicated to restoring the environment and fostering social justice. From billion-dollar nonprofits to single-person dot.causes, these groups collectively comprise the largest movement on earth, a movement that has no name, leader, or location, and that has gone largely ignored by politicians and the media. Like nature itself, it is organizing from the bottom up, in every city, town, and culture. and is emerging to be an extraordinary and creative expression of people's needs worldwide.
Blessed Unrest explores the diversity of the movement, its brilliant ideas, innovative strategies, and hidden history, which date back many centuries. A culmination of Hawken's many years of leadership in the environmental and social justice fields, it will inspire and delight any and all who despair of the world's fate, and its conclusions will surprise even those within the movement itself. Fundamentally, it is a description of humanity's collective genius, and the unstoppable movement to reimagine our relationship to the environment and one another."
But he says in that book how unaware everyone is of what other people around them are doing that is positive. I guess the mainstream media does not focus much on those planting "trees"? Although, maybe, sometimes focusing attention on new trees would get them vandalized? So that inattention may not be all bad.
The number one thing suggested in the book "Small is Possible" (by George McRobie about EF Schumacher's work, from 1981) is to figure out what is going on around you.
Maybe we need a Google Maps for good news about new trees being planted? :-) But maybe we just need something simpler and more local.
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
Fucking Hackers, I hope they go to prison.