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Author Topic:   United States Debt Default
Jon
Inactive Member


Message 91 of 211 (625272)
07-22-2011 2:02 AM
Reply to: Message 87 by AZPaul3
07-22-2011 12:29 AM


Re: minutiae
Get you a Miller and Modigliani on Macroeconomics and read the damn thing, Frog!

Don't you know?

One of the things Crash most prides himself on is the fact that he is an economic guru despite having never taken a single economic course in his life.

It's something all us fools who did take economic courses should really be bashing ourselves on the head for right now: Why in the hell did we waste all that time studying when divine inspiration was all we needed?

Jon


Love your enemies!

This message is a reply to:
 Message 87 by AZPaul3, posted 07-22-2011 12:29 AM AZPaul3 has seen this message but not replied

Replies to this message:
 Message 93 by crashfrog, posted 07-22-2011 2:21 AM Jon has not replied

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 92 of 211 (625273)
07-22-2011 2:17 AM
Reply to: Message 90 by Jon
07-22-2011 1:56 AM


Is there any law requiring the Fed to accept anything and everything minted by the Treasury?

Only the "law" of supply and demand; the Fed introduces far more dollars than the Treasury can print or could print.


This message is a reply to:
 Message 90 by Jon, posted 07-22-2011 1:56 AM Jon has replied

Replies to this message:
 Message 94 by Jon, posted 07-22-2011 2:45 AM crashfrog has replied

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


(1)
Message 93 of 211 (625274)
07-22-2011 2:21 AM
Reply to: Message 91 by Jon
07-22-2011 2:02 AM


Re: minutiae
One of the things Crash most prides himself on is the fact that he is an economic guru despite having never taken a single economic course in his life.

I don't pride myself on being a "guru" of any kind, in fact I'm on the record as believing that economics is mostly bullshit anyway.

But frankly the two of you should be utterly ashamed that you allow someone who's never taken a single economics course in his life to school you so utterly at it. The problem is - the two of you listen to so much conservative horseshit that you know less than nothing about the economic situation of the United States, so someone who knows nothing at all automatically knows more than the two of you put together.

If I'm wrong on the law, Paul should be able to demonstrate it. He's opted not to. If I'm wrong on the economics, Jon, you should be able to demonstrate how. You've opted not to. Why on Earth should anyone think it's the two of you who know what they're talking about, when the only abilities you demonstrate are the abilities to prevaricate, obfuscate, and slander?


This message is a reply to:
 Message 91 by Jon, posted 07-22-2011 2:02 AM Jon has not replied

  
Jon
Inactive Member


Message 94 of 211 (625277)
07-22-2011 2:45 AM
Reply to: Message 92 by crashfrog
07-22-2011 2:17 AM


Jon writes:

Is there any law requiring the Fed to accept anything and everything minted by the Treasury?

Only the "law" of supply and demand; the Fed introduces far more dollars than the Treasury can print or could print.

Glad to see you didn't want to answer my question. To repeat the request you have made of Paul, would you mind actually citing the law that would require the Fed to accept and circulate these platinum mega-coins you keep talking about?

Jon


Love your enemies!

This message is a reply to:
 Message 92 by crashfrog, posted 07-22-2011 2:17 AM crashfrog has replied

Replies to this message:
 Message 98 by crashfrog, posted 07-23-2011 1:52 AM Jon has not replied

  
AZPaul3
Member
Posts: 6837
From: Phoenix
Joined: 11-06-2006
Member Rating: 3.5


(1)
Message 95 of 211 (625293)
07-22-2011 4:39 AM
Reply to: Message 89 by crashfrog
07-22-2011 1:43 AM


Re: minutiae
So you admit that your figure of 102.63% of GDP is not only something you pulled out of your ass, but something you quoted completely out of context, as well?

source

I do not pull facts from my ass. That's your schtick like the Treasury can print $$ and take them directly to the bank.

I do not quote out of context. That's your schtick like misusing "issue" and conveniently overlooking a missing "legal tender" clause.

You owe me an apology, frog.

Do you notice how nobody thinks you're the one who knows what he's talking about?

I hadn't noticed that. God, I'm so embarrassed.

I give in to your superior intellect, Frog. You're the only one in the whole nation who has The SolutionTM and everyone knows it. Your personal interpretations of the Constitution, the US Code, the Federal Reserve Act and Macroeconomic Theory are flawless.

Yes, you are right. Treasury must pay all obligations on demand whether the funds are available or not. The Secretary can strike a platinum coin, roll it down to the local branch of Bank of America with his deposit slip in hand and say to the teller "I just made this and now I am issuing it. It says $1 Billion on it so it must be legal tender. Please deposit this into our account."

I don't know what came over me. Why did I not see the beauty in this elegant line of thought? I am so ashamed.

I'll leave the field to the victor now.


This message is a reply to:
 Message 89 by crashfrog, posted 07-22-2011 1:43 AM crashfrog has replied

Replies to this message:
 Message 100 by crashfrog, posted 07-23-2011 2:12 AM AZPaul3 has seen this message but not replied

  
Aware Wolf
Member (Idle past 741 days)
Posts: 156
From: New Hampshire, USA
Joined: 02-13-2009


Message 96 of 211 (625313)
07-22-2011 8:11 AM
Reply to: Message 89 by crashfrog
07-22-2011 1:43 AM


Re: minutiae
For what it's worth - not much, I suppose - I think AZ's right. Not that I know much about the specifics of your arguments. It just doesn't seem at all likely that there can be such a simple solution as you propose and nobody - not just Geithner, but also the press, Congress, the Administration - nobody has realized it.

This message is a reply to:
 Message 89 by crashfrog, posted 07-22-2011 1:43 AM crashfrog has replied

Replies to this message:
 Message 101 by crashfrog, posted 07-23-2011 2:24 AM Aware Wolf has not replied

  
Taz
Member (Idle past 2612 days)
Posts: 5069
From: Zerus
Joined: 07-18-2006


Message 97 of 211 (625398)
07-23-2011 1:25 AM


Edited by Taz, : No reason given.


  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 98 of 211 (625400)
07-23-2011 1:52 AM
Reply to: Message 94 by Jon
07-22-2011 2:45 AM


To repeat the request you have made of Paul, would you mind actually citing the law that would require the Fed to accept and circulate these platinum mega-coins you keep talking about?

I've not proposed that Geithner offer platinum coins to the Federal Reserve Bank; I've proposed that Geithner should strike and issue large-denomination platinum coins to claimants, or to banks on their behalf. And as I've said four times, the law that allows him to do this is US Code 31.5112(k).

I'm not aware of any law that forces the Federal Reserve Bank to do anything except for the Federal Reserve Act, but it strikes me that if the US Mint produces a coin that says "legal tender" on the front, and everyone agrees to treat it as legal tender, then there's really not jack shit the Federal Reserve Bank can do about it.


This message is a reply to:
 Message 94 by Jon, posted 07-22-2011 2:45 AM Jon has not replied

  
Taz
Member (Idle past 2612 days)
Posts: 5069
From: Zerus
Joined: 07-18-2006


Message 99 of 211 (625405)
07-23-2011 2:11 AM


Will you 2 shut the hell up?

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 100 of 211 (625406)
07-23-2011 2:12 AM
Reply to: Message 95 by AZPaul3
07-22-2011 4:39 AM


Re: minutiae
I do not pull facts from my ass.

In this case you appear to have pulled them from someone else's ass; according to your "source" these are

quote:
'guesstimated' projection by usgovernmentspending.com

I didn't want to make you look like a total idiot before, but you'll see that according to both CIA factbook figures, Eurostat, and the IMF, the US public debt as a percentage of GDP is under 100%; according to the factbook it's around 60%, which puts us at about 36th-highest public debt by percentage of GDP.

http://en.wikipedia.org/...f_sovereign_states_by_public_debt

You know, but don't let that stop you and Glenn Beck from shouting "fire" in any crowded movie theaters.

I do not quote out of context.

Really? I must have missed the part where you explained why public debt to the tune of 102.5% or whatever is such a calamity. Seems basically like you thought that throwing out some huge numbers would scare us. If you had an actual point to make you hit "submit" long before you actually made it, but that's kind of your thing - forgetting to make an actual argument in your posts. (And, of course, your other thing is that you have a huge hard-on for me, personally. You seem to have, since the day I got back.)

You're the only one in the whole nation who has The SolutionTM and everyone knows it.

No, I'm not the only one. For instance, here's political scientist Mark Kleiman:

quote:
Fortunately, the Debt Ceiling is not the only stupid law the Congress has passed. It turns out that, back in 1996, the platinum lobby managed to get the following section written into law:

quote:
The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Now, arguably a “bullion coin” is distinct from a “fiat coin” in that its face value is supposed to reflect its precious-metal content. But the law doesn’t say that.

So what if the Mint produces three platinum coins with face values of $1 trillion each? (There’s some debate about whose portraits should adorn them, but my nominees would be Ronald Reagan, George W. Bush, and Alfred E. Neumann; the last coin could have “What, me worry?” in place of “In God We Trust.”) The Treasury deposits the coins with the Fed; they’re legal tender, so the Fed exchanges them for $3T of Treasury bonds now in its reserves. And the coins are not debt: they’re money. Hey, presto! The debt shrinks by $3T, and we don’t have to issue more coins until after the 2012 election. Problem solved.


Mark Kleiman is

quote:
Mark Albert Robert Kleiman (born May 18, 1951) is an American professor, author, and blogger who is a Professor of Public Policy at the UCLA School of Public Affairs. Kleiman is a nationally recognized expert[1] in the field of crime and drug policy and the author of Marijuana: Costs of Abuse, Costs of Control and Against Excess: Drug Policy for Results. His most recent book is entitled When Brute Force Fails: How to Have Less Crime and Less Punishment.[2]
He is a research fellow at the Program for Criminal Justice Policy and Management at the John F. Kennedy School of Government at Harvard University, an adjunct scholar at the Center for American Progress, and was Thomas C. Schelling Visiting Professor at the School of Public Policy at the University of Maryland (2006-2007).
Kleiman grew up in Baltimore. He is a graduate of Haverford College, and received an M.P.P. and Ph.D. in Public Policy at the John F. Kennedy School of Government at Harvard University in 1985.
Kleiman was a legislative aide to Congressman Les Aspin and a special assistant to Polaroid CEO Edwin Land.
From 1979 to 1983, Kleiman worked for the Office of Policy and Management Analysis in the Criminal Division of the U.S. Department of Justice, and in 1982-83 he was its director and a member of the National Organized Crime Planning Council. From 1977 to 1979, he was Deputy Director for Management and Director of Program Analysis for the Office of Management and Budget of the City of Boston.
Kleiman is the editor of the Drug Policy Analysis Bulletin. Kleiman also advises governments from the local to federal levels on crime control and drug policy.

http://en.wikipedia.org/wiki/Mark_kleiman

Where's your Wikipedia entry, AZPaul? I mean, you must have one, with a biography at least as impressive as Mark Kleiman's, right? I notice that he's a research fellow at Harvard; what research do you do at Harvard? Kleiman served under Les Aspin; what Congressman did you ever work for?

Kleiman goes on to say:

quote:
Is it legal? Arguably, it would be illegal not to do it. The President is bound by the Constitution and his oath of office to “take care that the laws be faithfully executed.” Appropriations bills are laws; he’s not allowed to impound appropriated funds, but must expend them. If the debt ceiling isn’t raised – won’t have the cash to do so unless he issues the trillion-dollar coins. And if that’s the only way to carry out his Constitutional duties, then he is not just allowed, but required, to do precisely that.

Hrm, sounds familiar. Of course, I'm no Harvard scholar, and I wish I could say that I've just been cribbing from Kleiman this whole time, but if you'll observe the relevant dates, you'll see that my first message in this thread was two days before Kleiman published this blog entry.

http://www.samefacts.com/...ing/phony-problem-phony-solution

Oh, well. Great minds think alike, I guess!

The Secretary can strike a platinum coin, roll it down to the local branch of Bank of America with his deposit slip in hand and say to the teller "I just made this and now I am issuing it. It says $1 Billion on it so it must be legal tender. Please deposit this into our account."

Yes, exactly. By definition when the United States Treasury prints money, it cannot be counterfeit. They print the money! Therefore they can print as much of it as they need to.

Indeed they have to, because the Executive Branch doesn't have unallotment authority. Go on, prove me wrong - show me where in the Constitution the Executive Branch can unallot legislative appropriations.

I'll wait.


This message is a reply to:
 Message 95 by AZPaul3, posted 07-22-2011 4:39 AM AZPaul3 has seen this message but not replied

Replies to this message:
 Message 202 by crashfrog, posted 03-21-2020 11:27 AM crashfrog has not replied

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 101 of 211 (625408)
07-23-2011 2:24 AM
Reply to: Message 96 by Aware Wolf
07-22-2011 8:11 AM


Re: minutiae
For what it's worth - not much, I suppose - I think AZ's right. Not that I know much about the specifics of your arguments.

Well, fair enough. I'm prepared to admit, then, that AZPaul seems to be convincing people who admit to knowing absolutely nothing about the issue.

It just doesn't seem at all likely that there can be such a simple solution as you propose and nobody - not just Geithner, but also the press, Congress, the Administration - nobody has realized it.

Well, that's not accurate. Prominent political scientist Mark Kleiman has realized it, as I've just demonstrated; political blogger Matthew Yglesias is where I first heard about it. It's just new to you but as the debt ceiling deadline rolls closer with no sign that the Republican hostage crisis will be resolved, I think you'll hear a lot more about it. And here's econoblogger Mike Norman:

quote:
Congress provided the authority, in legislation passed in 1996, for the US Mint to create platinum bullion or proof platinum coins with arbitrary fiat face value having no relationship to the value of the platinum used in these coins. These coins are legal tender. So, when the Mint deposits them in its Public Enterprise Fund account at the Fed, the Fed must credit that account with the face value of these coins. This difference between the Mint's costs in producing the coins and the credit provided by the Fed is the US Mint's profit. The US code also provides for the Treasury to periodically “sweep” the Mint's account at the Federal Reserve Bank for profits earned from these coins. Coin seigniorage is just the profits from these coins, which are then booked as miscellaneous receipts (revenue) to the Treasury and go into the Treasury General Account (TGA), narrowing the revenue gap between spending and tax revenues. Platinum coins with huge face values, $1, $2, and $3 Trillion coins have been mentioned, could close the revenue gap entirely, and, if used often enough, technically end deficit spending, while still retaining the gap between tax revenues and spending.

http://mikenormaneconomics.blogspot.com/...-debt-crisis.html

Contra AZPaul, the Treasury has released Treasury notes as legal tender in the past, and even after the Federal Reserve Act direct Treasury notes are legal tender. Even though the vast majority of paper money in the US are Reserve notes, Treasury notes continue to be legal tender and can still be spent just like money - because they're money! That's why your old $2 bills are still worth 2 dollars. And the US Treasury retains the power to issue fiat currency; 31.5112(k) empowers the Treasury to strike and issue platinum coinage in any denomination, not limited to the actual value of the metal in the coin. AZPaul is simply full of shit, as usual.


This message is a reply to:
 Message 96 by Aware Wolf, posted 07-22-2011 8:11 AM Aware Wolf has not replied

  
Taz
Member (Idle past 2612 days)
Posts: 5069
From: Zerus
Joined: 07-18-2006


Message 102 of 211 (625527)
07-23-2011 7:13 PM


Are you two secret tea party agents? Only tea baggers would try to confuse people about the real issue by arguing on and on pages after pages about nonsensical stuff.

The latest news on the issue is this. Boehner now wants $3 trillion cuts without any tax raise at all. Let's step back a moment and take a look. Initially, the republicans wanted $400 billion cutsfrom social security and medicare without raising any taxes. After 2 weeks of negotiation, Obama agreed to cut $900 billion from social security and medicare without raising any taxes. Boehner walked away from the negotiations yesterday. Today, they announced they want $3,000 billion cuts.

Obama raised a good point yesterday. Will the republicans say yes to anything at all? They kept raising their demands everytime the democrats agreed to something.

Edited by Taz, : No reason given.


Replies to this message:
 Message 103 by crashfrog, posted 07-23-2011 8:46 PM Taz has replied

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 103 of 211 (625538)
07-23-2011 8:46 PM
Reply to: Message 102 by Taz
07-23-2011 7:13 PM


The latest news on the issue is this. Boehner now wants $3 trillion cuts without any tax raise at all.

And he's a fucking idiot; Obama will consider $3 trillion too much and Cantor will consider it too little ("Why couldn't Boehner get $4 trillion in cuts? Because he's too liberal. Vote Cantor for House majority leader!") so it has zero chance of passing.

The Republicans have set themselves up a hostage crisis with no way out, because however Boehner resolves this, Cantor is going to maneuver against him for Majority leader by portraying him as an appeaser. "Soft on hostages."

Obama raised a good point yesterday. Will the republicans say yes to anything at all?

No, because they can't. Boehner can't agree to a deal unless Eric Cantor will vote for it. But Eric Cantor, by definition, can't vote for anything Boehner agrees to because he wants Boehner's job, and therefore he wants to make Boehner out to be an appeaser.

If I were Obama, I'd come back to the table and I'd say "ok, guys, here's my final offer - absolutely fucking nothing. No cuts to anything. I tried to work with you morons and got shit on for it, so we're done with this farce. I'm just going to have Geithner use the 31.5112(k) option, print whatever platinum money I goddamn please, and completely ignore the debt ceiling. In fact the 14th Amendment requires me to do so - couldn't let the country default if I wanted. Sorry, fucko, but if you assholes don't like it, you shouldn't have let the platinum lobby write your laws."

He should. Will he? I think it's more likely that Cantor will let this one go, than be the guy who cost Congress power over the debt limit for all eternity.


This message is a reply to:
 Message 102 by Taz, posted 07-23-2011 7:13 PM Taz has replied

Replies to this message:
 Message 104 by Taz, posted 07-24-2011 4:17 AM crashfrog has replied

  
Taz
Member (Idle past 2612 days)
Posts: 5069
From: Zerus
Joined: 07-18-2006


Message 104 of 211 (625572)
07-24-2011 4:17 AM
Reply to: Message 103 by crashfrog
07-23-2011 8:46 PM


Obama is too moderate to do that. It will be interesting to see what happens next.

This message is a reply to:
 Message 103 by crashfrog, posted 07-23-2011 8:46 PM crashfrog has replied

Replies to this message:
 Message 105 by crashfrog, posted 07-24-2011 12:05 PM Taz has replied

  
crashfrog
Member (Idle past 788 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 105 of 211 (625607)
07-24-2011 12:05 PM
Reply to: Message 104 by Taz
07-24-2011 4:17 AM


Obama is too moderate to do that.

No, I disagree. If Obama is placed into the situation of having to choose between expanding executive power and preside over a historic default on the national debt, he'll expand executive power (just like every executive before him.) He's not a moderate, as I've explained before; he just looks that way because of fundamental limits on executive power.

If Republicans truly give him no choice he'll have to ignore the debt ceiling with the 31.5112(k) strategy. But I think it's more likely that Republicans will fall in line behind something that saves the fortunes of rich people.


This message is a reply to:
 Message 104 by Taz, posted 07-24-2011 4:17 AM Taz has replied

Replies to this message:
 Message 106 by Taz, posted 07-25-2011 3:10 PM crashfrog has replied

  
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