The Republicans made some tentative moves to reach an accommodation with the Democrats and President Obama today. At day's end, they announced an "encouraging" meeting with the President.
Perhaps the government shutdown, and the prospect of a default, will soon be resolved.
Of course, the fierce fighters of the Right aren't going to give up unconditionally; they're tough, dedicated, take-no-prisoners guys. There will be a hard price for Obama to pay. The Repubs have focused on the one issue that is, above all, raising howls of outrage from the American People, and they won't agree to anything until it is addressed.
They're still working on the slogan. Something along the lines of "Fifty-Four Forty or Fight!"
But no matter what, they demand, absolutely demand, alongside the millions who are marching in the streets, an end to the universally hated 2% tax on medical devices.
Friday, October 11, 2013
Tuesday, October 8, 2013
The Root of the Problem
Paul Krugman, in yesterday's column, points to the basic problem with the Republican Party: it's the Dunning-Kruger effect, which describes the relationship between incompetence and self-confidence. We've all experienced it: the guy at the next table, or on the bus, who loudly proclaims how something works, or what something means, when we know with certainty that he is far off base. Usually, it's someone, a "lay" person, who is spouting off about, say, a key aspect of our own professional life.
I have gotten this from an employee who, hearing that the top marginal tax rate is about to increase, demands that his salary be held at one dollar below the threshold at which the top rate begins to apply. He'll show 'em! Of course, he's making the mistake of assuming that the top rate applies to all the earnings of a person who hits that threshold; either he doesn't know that we have a graduated income tax, or he doesn't know what that means.
In the Dunning-Kruger Effect, the less a person knows, the more he is likely to overestimate his own competence or sophistication. In contrast, the more someone knows, the more he is likely to be uncertain. It's why some very smart people appear unable to give simple, straightforward answers to questions about which they are highly knowledgeable: they are too aware of nuances.
The Republicans, and especially the Tea Party, have seriously emphasized doctrinal rigidity. No surprise, their candidates tend to toe the line on issues. When that happens, someone who thinks deeply is at a disadvantage against someone who does not: the latter guy can confidently and boldly assert the truth. And the "truth" is by definition not nuanced at all: it's obvious, there for anyone to see.
So Republicans elect more and more "true believers" who do not admit to doubt or complexity. And governing the country involves hugely complex matters involving a lot of uncertainty. Their solution? Find someone who can be labeled an "expert, and who says that which you want to hear. There is then no need to delve deeply into any issue. And, by the way, the average person is often attracted to bold assertions of opinion (especially when labeled "fact") from political leaders, because it gives them comfort: these guys must know what they're talking about. This completes the circle, if you will, of incompetence.
Now, if we have the Truth, the other guys must be wrong; and, if they're evidently smart, they must also be devious because they know what they're saying is wrong. It's a short step from that to the notion that they are liars who Hate America. If they are also very different from Us --they are dark-skinned, or have odd names--, well, QED: of course they hate America: they're not even American.
So we come to the notion that the debt default won't really be a problem, because we'll still have enough revenue to pay the basic bills. After all, most of what the government spends is wasted, right? So we'll just get Paul Ryan's budget cuts, all at once. Next stop: prosperity!
So do not expect that the Republicans will limply give in, when confronted with the Disaster: they are cognitively incapable of appreciating that it could possibly be a disaster.
I have gotten this from an employee who, hearing that the top marginal tax rate is about to increase, demands that his salary be held at one dollar below the threshold at which the top rate begins to apply. He'll show 'em! Of course, he's making the mistake of assuming that the top rate applies to all the earnings of a person who hits that threshold; either he doesn't know that we have a graduated income tax, or he doesn't know what that means.
In the Dunning-Kruger Effect, the less a person knows, the more he is likely to overestimate his own competence or sophistication. In contrast, the more someone knows, the more he is likely to be uncertain. It's why some very smart people appear unable to give simple, straightforward answers to questions about which they are highly knowledgeable: they are too aware of nuances.
The Republicans, and especially the Tea Party, have seriously emphasized doctrinal rigidity. No surprise, their candidates tend to toe the line on issues. When that happens, someone who thinks deeply is at a disadvantage against someone who does not: the latter guy can confidently and boldly assert the truth. And the "truth" is by definition not nuanced at all: it's obvious, there for anyone to see.
So Republicans elect more and more "true believers" who do not admit to doubt or complexity. And governing the country involves hugely complex matters involving a lot of uncertainty. Their solution? Find someone who can be labeled an "expert, and who says that which you want to hear. There is then no need to delve deeply into any issue. And, by the way, the average person is often attracted to bold assertions of opinion (especially when labeled "fact") from political leaders, because it gives them comfort: these guys must know what they're talking about. This completes the circle, if you will, of incompetence.
Now, if we have the Truth, the other guys must be wrong; and, if they're evidently smart, they must also be devious because they know what they're saying is wrong. It's a short step from that to the notion that they are liars who Hate America. If they are also very different from Us --they are dark-skinned, or have odd names--, well, QED: of course they hate America: they're not even American.
So we come to the notion that the debt default won't really be a problem, because we'll still have enough revenue to pay the basic bills. After all, most of what the government spends is wasted, right? So we'll just get Paul Ryan's budget cuts, all at once. Next stop: prosperity!
So do not expect that the Republicans will limply give in, when confronted with the Disaster: they are cognitively incapable of appreciating that it could possibly be a disaster.
Wednesday, July 17, 2013
Flash!! Repubs Hate Obamacare!
Or anything else that contains the word "Obama." They voted, in the House today, to impose a delay on the individual mandate. The President ordered a one-year delay in the employer coverage requirement, right? So it's only fair to delay the individual mandate. Stands to reason.
Hearing a Republican appeal to Reason is richly comic, of course. There's not even a need to list the GOP's positions that defy science, facts, the best interests of the USA, fairness, compassion, even their favorite "common sense." So why not make a mockery of reasonableness?
The fact is, Obamacare (aka the Patient Protection and Affordable Care Act) is the law; and though the House may vote 40 more times, to go with the 40 previous attempts, to repeal it, the law won't be repealed. It is becoming clear that Obamacare may be the worst nightmare of the Republican Party: a federal program that works, and that involves more regulation, and that helps millions of people --and that was a Democratic initiative.
The insurance rates for various companies serving New York, released today, make it clear how far some premiums are likely to fall. Each new piece of evidence that the PPACA may be onto something, that it may actually achieve greater coverage at lower prices, must feel like a stake in the heart of the Tea Party. So it's understandable that the GOP just can't let go of the illusion that, somehow, they can eliminate it, ar, better yet, make it fail miserably. They have tried starving it of funds for implementation, They've held hostage virtually every Obama Administration appointment. They've spread misinformation far and wide, including the canard that Obamacare will bankrupt the government, that the deficit, already huge, will soar ...
... what's that? the deficit has fallen by half, and looks to continue heading down? In June the government actually ran a surplus?
Ignore the man behind the curtain! the facts, to paraphrase a famous Alan Greenspan lament, are misbehaving; and that tends to make people disregard what I am telling them.
That seems to be a particular affliction on the Right, these days. Better go over to the House floor and vote against something; it feels so good.
Hearing a Republican appeal to Reason is richly comic, of course. There's not even a need to list the GOP's positions that defy science, facts, the best interests of the USA, fairness, compassion, even their favorite "common sense." So why not make a mockery of reasonableness?
The fact is, Obamacare (aka the Patient Protection and Affordable Care Act) is the law; and though the House may vote 40 more times, to go with the 40 previous attempts, to repeal it, the law won't be repealed. It is becoming clear that Obamacare may be the worst nightmare of the Republican Party: a federal program that works, and that involves more regulation, and that helps millions of people --and that was a Democratic initiative.
The insurance rates for various companies serving New York, released today, make it clear how far some premiums are likely to fall. Each new piece of evidence that the PPACA may be onto something, that it may actually achieve greater coverage at lower prices, must feel like a stake in the heart of the Tea Party. So it's understandable that the GOP just can't let go of the illusion that, somehow, they can eliminate it, ar, better yet, make it fail miserably. They have tried starving it of funds for implementation, They've held hostage virtually every Obama Administration appointment. They've spread misinformation far and wide, including the canard that Obamacare will bankrupt the government, that the deficit, already huge, will soar ...
... what's that? the deficit has fallen by half, and looks to continue heading down? In June the government actually ran a surplus?
Ignore the man behind the curtain! the facts, to paraphrase a famous Alan Greenspan lament, are misbehaving; and that tends to make people disregard what I am telling them.
That seems to be a particular affliction on the Right, these days. Better go over to the House floor and vote against something; it feels so good.
Tuesday, July 16, 2013
... And Another Thing:
OK, I didn't go into the Race Thing when discussing Trayvon & George. So here goes.
Yes, Trayvon was probably "profiled" by George Zimmerman; it's likely that a similarly-attired, Skittles-carrying white kid would have passed by without notice. And that's a shame: it's just one more reason that the kid is dead.
Zimmerman, and you, can't help it: we "profile" every time we are out in public. Maybe it's girls: cute? ordinary? ugly? a "ten"? Or maybe it's people on LaSalle Street: Lawyer? Secretary? Messenger? Hustler?
These, and hundreds of others, are the categories into which we automatically sort people we encounter. It's based on our experience --some people are much better at it than others--; it saves time, just like when, in an unfamiliar store or other place, we look for the person we think can help us.
I am not saying that profiling by race or age or class or gender is okay; I'm just saying that we all do it, all the time. It can lead us to make mistakes. Some profiling is worse, by which I mean less helpful to us and more (potentially) unfair to the person being profiled. But every shampoo commercial in which the severe-looking woman suddenly removes her glasses and a few hairpins and, with a shake of the head, becomes someone else, is a tease based on our instinct to profile.
One reason skilled con men dress in suits and ties is that most people profile the suit-and-tie crowd as respectable (okay, maybe not exactly respectable: but, as Woody Guthrie sang, they may steal from you, but it will be with a fountain pen, not a pistol) and are willing to accept them --I almost wrote "at face value." And what does that phrase mean, except that we tend to judge by appearances? Had Trayvon Martin been wearing a suit and carrying a Bible, he could probably have knocked on dozens of doors without exciting alarm. No, it's not fair that a hoodie and jeans automatically produces a different reaction; but it's true. To take a more extreme example, it is perfectly possible that a steroid-enhanced biker with a head-scarf, bulging biceps in a cutoff leather vest, no shirt, boots, with a chain handing from his belt will elicit a sense of alarm, even if he's just a banker on his way to a costume party: the very point of his costume is to make us profile him, isn't it?
We should try to avoid profiling --sometimes. George Zimmerman apparently made a bad mistake, to the extent he was profiling Trayvon Martin, who evidently was a good kid. And I think we can say that people in positions of great power, such as cops and others authorized to walk around, armed, seeking out potential trouble in order to prevent or defuse it, should be extra careful about how and when they profile. But no one would give a second thought to a cop who, seeing a ten year-old on a bike, would, whistling, turn away to go about his business.
So, we should deplore the situation, and the habit of profiling that led to the killing of Mr. Martin. But we will never be able to control that habit, as long as we are meat-eaters. It's too useful.
Yes, Trayvon was probably "profiled" by George Zimmerman; it's likely that a similarly-attired, Skittles-carrying white kid would have passed by without notice. And that's a shame: it's just one more reason that the kid is dead.
Zimmerman, and you, can't help it: we "profile" every time we are out in public. Maybe it's girls: cute? ordinary? ugly? a "ten"? Or maybe it's people on LaSalle Street: Lawyer? Secretary? Messenger? Hustler?
These, and hundreds of others, are the categories into which we automatically sort people we encounter. It's based on our experience --some people are much better at it than others--; it saves time, just like when, in an unfamiliar store or other place, we look for the person we think can help us.
I am not saying that profiling by race or age or class or gender is okay; I'm just saying that we all do it, all the time. It can lead us to make mistakes. Some profiling is worse, by which I mean less helpful to us and more (potentially) unfair to the person being profiled. But every shampoo commercial in which the severe-looking woman suddenly removes her glasses and a few hairpins and, with a shake of the head, becomes someone else, is a tease based on our instinct to profile.
One reason skilled con men dress in suits and ties is that most people profile the suit-and-tie crowd as respectable (okay, maybe not exactly respectable: but, as Woody Guthrie sang, they may steal from you, but it will be with a fountain pen, not a pistol) and are willing to accept them --I almost wrote "at face value." And what does that phrase mean, except that we tend to judge by appearances? Had Trayvon Martin been wearing a suit and carrying a Bible, he could probably have knocked on dozens of doors without exciting alarm. No, it's not fair that a hoodie and jeans automatically produces a different reaction; but it's true. To take a more extreme example, it is perfectly possible that a steroid-enhanced biker with a head-scarf, bulging biceps in a cutoff leather vest, no shirt, boots, with a chain handing from his belt will elicit a sense of alarm, even if he's just a banker on his way to a costume party: the very point of his costume is to make us profile him, isn't it?
We should try to avoid profiling --sometimes. George Zimmerman apparently made a bad mistake, to the extent he was profiling Trayvon Martin, who evidently was a good kid. And I think we can say that people in positions of great power, such as cops and others authorized to walk around, armed, seeking out potential trouble in order to prevent or defuse it, should be extra careful about how and when they profile. But no one would give a second thought to a cop who, seeing a ten year-old on a bike, would, whistling, turn away to go about his business.
So, we should deplore the situation, and the habit of profiling that led to the killing of Mr. Martin. But we will never be able to control that habit, as long as we are meat-eaters. It's too useful.
Monday, July 15, 2013
Not Guilty
Trayvon Martin is dead. George Zimmerman, his killer, has been found Not Guilty.
This verdict does not mean that he didn't do it; he agrees that he shot the kid. It does not mean "Innocent" --or, as his attorney would have it, "Completely Innocent." It does not even mean that he bears no responsibility for Martin's death. It just means that, under the applicable law, he could not be proven legally culpable; he could not be found to have committed Second-Degree Murder, or Manslaughter.
The Rev. Al Sharpton, a few stone lighter than when he boldly took up the case of Tawana Brawley a couple of decades ago, disgracing himself in the process, of course has to step forward and demand a federal investigation. The Justice Department must assure one and all that it is looking into the matter. There must be demonstrations. All this is routine; it's fine.
And most reasonable people can pooh-pooh the defense attorney's assertion that Martin was, in fact armed, because there was a concrete sidewalk available to him. Which of us is not so armed?
We can almost certainly agree that, had Zimmerman not had a gun, there would probably have been no confrontation. We can wonder why a neighborhood "volunteer" --in a gated community, no less!-- has a need to carry a gun. Maybe it's because, without one, he would not have pursued so diligently the "ground" that Florida law allows him to "stand."
This was a sad, unnecessary affair. Zimmerman, if he has a conscience, will carry a burden to his own grave. Florida's (and, evidently, a couple dozen other states') "Stand Your Ground" laws are retrograde acknowledgements of a certain American macho mindset, best relegated to fat guys in Barca-Loungers on a Football Sunday, that asserts physical dominance as the emblem of manliness. Every society has its knuckle-draggers; only a few, such as our own, spends time and resources catering to them.
But I am tired of the growing tendency in this country to not let things be. Zimmerman was found Not Guilty. That should be an end of it. We can lament the verdict; but unless we heard all the evidence that was presented in court (not teed up for a good long Big Bertha drive by one "side" or the other in the press), we really have no right to an opinion. That's why we have juries. And to say that the verdict represented a miscarriage of justice is to say that the jurors were biased to the point of being willing to let a murderer go free. Not only is there no evidence of this; it's highly unlikely.
And I am tired of hearing, every time someone disagrees with a verdict, that now we should have another trial, based on substantially the same facts, to find a slightly different crime, such as a civil rights violation. That smacks of double jeopardy to me; and if there was a time in our history when it was necessary because of the systemic racism that ruled the law-enforcement system of some of our states, that time is past. What ever happened to the notion that we'd rather let a hundred criminals go free than convict one innocent man? A rational view would have to take into account that, absent a confession or some overwhelming eyewitness testimony --there was, clearly, neither--, a jury would have little choice but to entertain a reasonable doubt.
I don't like the fact that Trayvon Martin was killed. I don't like the gun laws. I don't like the notion of a citizen "deputized" by --who? someone or other-- to carry a weapon and be given the feeling that he's an important cog in the law-enforcement system. There are a lot of things I don't like; and I am sure that there are daily miscarriages of justice in the land, for lots of reasons.
And if I don't like these things, really, really a lot, then I am free to protest, to organize, to try and pass better laws or repeal bad ones. There's a process, folks. We've gone through it. Not Guilty means It's Over.
What's for dinner?
This verdict does not mean that he didn't do it; he agrees that he shot the kid. It does not mean "Innocent" --or, as his attorney would have it, "Completely Innocent." It does not even mean that he bears no responsibility for Martin's death. It just means that, under the applicable law, he could not be proven legally culpable; he could not be found to have committed Second-Degree Murder, or Manslaughter.
The Rev. Al Sharpton, a few stone lighter than when he boldly took up the case of Tawana Brawley a couple of decades ago, disgracing himself in the process, of course has to step forward and demand a federal investigation. The Justice Department must assure one and all that it is looking into the matter. There must be demonstrations. All this is routine; it's fine.
And most reasonable people can pooh-pooh the defense attorney's assertion that Martin was, in fact armed, because there was a concrete sidewalk available to him. Which of us is not so armed?
We can almost certainly agree that, had Zimmerman not had a gun, there would probably have been no confrontation. We can wonder why a neighborhood "volunteer" --in a gated community, no less!-- has a need to carry a gun. Maybe it's because, without one, he would not have pursued so diligently the "ground" that Florida law allows him to "stand."
This was a sad, unnecessary affair. Zimmerman, if he has a conscience, will carry a burden to his own grave. Florida's (and, evidently, a couple dozen other states') "Stand Your Ground" laws are retrograde acknowledgements of a certain American macho mindset, best relegated to fat guys in Barca-Loungers on a Football Sunday, that asserts physical dominance as the emblem of manliness. Every society has its knuckle-draggers; only a few, such as our own, spends time and resources catering to them.
But I am tired of the growing tendency in this country to not let things be. Zimmerman was found Not Guilty. That should be an end of it. We can lament the verdict; but unless we heard all the evidence that was presented in court (not teed up for a good long Big Bertha drive by one "side" or the other in the press), we really have no right to an opinion. That's why we have juries. And to say that the verdict represented a miscarriage of justice is to say that the jurors were biased to the point of being willing to let a murderer go free. Not only is there no evidence of this; it's highly unlikely.
And I am tired of hearing, every time someone disagrees with a verdict, that now we should have another trial, based on substantially the same facts, to find a slightly different crime, such as a civil rights violation. That smacks of double jeopardy to me; and if there was a time in our history when it was necessary because of the systemic racism that ruled the law-enforcement system of some of our states, that time is past. What ever happened to the notion that we'd rather let a hundred criminals go free than convict one innocent man? A rational view would have to take into account that, absent a confession or some overwhelming eyewitness testimony --there was, clearly, neither--, a jury would have little choice but to entertain a reasonable doubt.
I don't like the fact that Trayvon Martin was killed. I don't like the gun laws. I don't like the notion of a citizen "deputized" by --who? someone or other-- to carry a weapon and be given the feeling that he's an important cog in the law-enforcement system. There are a lot of things I don't like; and I am sure that there are daily miscarriages of justice in the land, for lots of reasons.
And if I don't like these things, really, really a lot, then I am free to protest, to organize, to try and pass better laws or repeal bad ones. There's a process, folks. We've gone through it. Not Guilty means It's Over.
What's for dinner?
Sunday, March 3, 2013
Entitlement
Q: Why am I opposed to "Means-Testing" Medicare or Social Security?
A: These programs are universally available to Americans. Turn 65, and you are automatically eligible to enroll in Medicare. When you reach 66 (currently; it'll be 67 in the future, which is a problem in its own right) you are eligible for Social Security benefits, assuming you or your spouse has paid into the system for a short period at some point in your working life.
This is what "entitlement" means. You are entitled to it, just as you are entitled (I.e., you have the right) to vote (except in an increasing number of Republican-controlled districts), to move wherever you can afford without getting a permit from anyone (since the defeat of Southern Democrat-led restrictive covenants in housing, starting 50 years ago).
To "means-test" these entitlements is to say, in Step One, that the wealthy are no longer entitled to them, because they don't need them. In other words, they become something akin to Welfare, and you will have to prove that you are financially eligible --in other words, prove that you are "poor." Mind you, there is no requirement to enroll in either of these programs; the civic-minded wealthy need not accept them.
Step Two will be to "end Welfare as we know it." That Clinton-Gingrich initiative certainly cut spending on welfare; it also contributed to overall levels of poverty and, in times of economic depression such as we are now experiencing, to severe economic distress.
To turn Social Security and Medicare into welfare programs is simply the beginning of a process that will result in their loss of legitimacy and an acceleration of the ongoing process of constructing a two-tiered society in which the rich prosper, the poor fall into Third-World levels of subsistence, and the middle class disappears.
Hey, the poor have always been easier to control than those who have even a small amount of personal independence, and who know they have rights.
A: These programs are universally available to Americans. Turn 65, and you are automatically eligible to enroll in Medicare. When you reach 66 (currently; it'll be 67 in the future, which is a problem in its own right) you are eligible for Social Security benefits, assuming you or your spouse has paid into the system for a short period at some point in your working life.
This is what "entitlement" means. You are entitled to it, just as you are entitled (I.e., you have the right) to vote (except in an increasing number of Republican-controlled districts), to move wherever you can afford without getting a permit from anyone (since the defeat of Southern Democrat-led restrictive covenants in housing, starting 50 years ago).
To "means-test" these entitlements is to say, in Step One, that the wealthy are no longer entitled to them, because they don't need them. In other words, they become something akin to Welfare, and you will have to prove that you are financially eligible --in other words, prove that you are "poor." Mind you, there is no requirement to enroll in either of these programs; the civic-minded wealthy need not accept them.
Step Two will be to "end Welfare as we know it." That Clinton-Gingrich initiative certainly cut spending on welfare; it also contributed to overall levels of poverty and, in times of economic depression such as we are now experiencing, to severe economic distress.
To turn Social Security and Medicare into welfare programs is simply the beginning of a process that will result in their loss of legitimacy and an acceleration of the ongoing process of constructing a two-tiered society in which the rich prosper, the poor fall into Third-World levels of subsistence, and the middle class disappears.
Hey, the poor have always been easier to control than those who have even a small amount of personal independence, and who know they have rights.
Thursday, February 14, 2013
The Trillion-Dollar Coin
The thing is, money is all about shared assumptions, conventions that are accepted generally. Even with gold, no one seriously believes that it is intrinsically "worth" such-and-such an amount per ounce. It's just a way of keeping score: if we had to exchange so many bushels of wheat or x-rays or dozens of eggs for a brake job or some such product or service, we'd all have to have huge lists, or databases, with us at all times in order to keep track of relative values. We'd never get anything done.
So, to a certain extent, all we are talking about when we talk about money is our shared willingness to agree on rates of exchange of products, and a quick and easy tool to enable us actually to make the exchanges we need to make.
So, as far as the trillion-dollar coin is concerned, we could just as easily pretend to have it; we could not make it, and say we had. The effect would be the same: okay, you've got this stuff, this "money" that we've all agreed to accept as a store of value and a medium of exchange. So, we'll take it, at convenient times and in convenient pieces, and in return we will mow your lawn or change the oil on your car --or provide you with a new car--; and then you will have what you want. Whatever we want, this stuff will be accepted by the next guy in return for it.
It seems to me that when you look at it this way, all the hand-wringing in Washington about the budget, the debt, and so forth is so much window-dressing. We have too much debt, it is said*. What that apparently is supposed to signify is this: other people have a lot of our debt. We owe other people way, way too much. We can't pay it all off. So, the people who have our debt might decide they are uncomfortable, and want to get paid. The thing they would want to get paid with is this "money;" which exists only because we create it. So can't we just make some more?
Ah, say the skeptics: you might think we can, but it isn't so. If we make too much of it, people will get upset and will demand a lot more in payment, or stop accepting it altogether and demand something else.
That's where the notion of "full faith and credit" of the U.S. comes in: we are a rich, productive country, and everyone knows this, and so pretty much everyone is willing to believe that we can back up our promises (that is, our money) with our resources. We can create value in the form of things people want. Never mind that a lot of this value is intangible; it's real as long as people think it is real.
A trillion-dollar coin is, fundamentally, no different than a dollar bill. It would represent our contract, in a universally-accepted form, to perform in the future.
Put it this way: if you have a brokerage account, and a 401(k), and so forth, what do you really have? Numbers on a piece of paper, and not much more --in fact, if, like me, you've stopped receiving monthly statements on paper, all you have are images on a computer screen. But you can change these images into bank deposits (another intangible) and eventually into cans of pork 'n' beans; and, ultimately, that's all you care about. The pixels floating out there, or the numbers on sheets of paper, are just a method of score-keeping: they verify your entitlement to that can of beans, whenever you might want to claim it.
There's nothing magic about a trillion-dollar coin; the Mint could strike one trillion dollar coins, or dollar bills for that matter (however, there are laws restricting the amount of paper currency --but not of coinage-- that can be in circulation at one time). It is well-established in traditional economic theory that, in our current circumstances, such printing would not be inflationary; indeed, in spite of a constant chorus of warning, over the past 5 years, from right-wing politicians about hyper-inflation, the dramatic expansion of government "stimulus" and significant annual federal deficits, there has been no inflation. We've even flirted with deflation from time to time. But physically printing all that volume of money would be time- and resource-consuming (even if it were legal); let's just take the large-denomination coin shortcut.
In its function, the trillion-dollar coin would be indistinguishable from debt; but then, all money is, debt, isn't it?
*The federal debt is, very roughly, equal to the current annual output of the national economy. Is that "too much" debt? Reasonable people may differ. But for all the "government ought to be run like a household" people, I have a question: How many of you bought your first house for an amount equal to your annual salary? Did that purchase mean you had "too much debt?" And did you cut back to two meals a day in response? That is, essentially, what we are being asked to do now, by the Right.
So, to a certain extent, all we are talking about when we talk about money is our shared willingness to agree on rates of exchange of products, and a quick and easy tool to enable us actually to make the exchanges we need to make.
So, as far as the trillion-dollar coin is concerned, we could just as easily pretend to have it; we could not make it, and say we had. The effect would be the same: okay, you've got this stuff, this "money" that we've all agreed to accept as a store of value and a medium of exchange. So, we'll take it, at convenient times and in convenient pieces, and in return we will mow your lawn or change the oil on your car --or provide you with a new car--; and then you will have what you want. Whatever we want, this stuff will be accepted by the next guy in return for it.
It seems to me that when you look at it this way, all the hand-wringing in Washington about the budget, the debt, and so forth is so much window-dressing. We have too much debt, it is said*. What that apparently is supposed to signify is this: other people have a lot of our debt. We owe other people way, way too much. We can't pay it all off. So, the people who have our debt might decide they are uncomfortable, and want to get paid. The thing they would want to get paid with is this "money;" which exists only because we create it. So can't we just make some more?
Ah, say the skeptics: you might think we can, but it isn't so. If we make too much of it, people will get upset and will demand a lot more in payment, or stop accepting it altogether and demand something else.
That's where the notion of "full faith and credit" of the U.S. comes in: we are a rich, productive country, and everyone knows this, and so pretty much everyone is willing to believe that we can back up our promises (that is, our money) with our resources. We can create value in the form of things people want. Never mind that a lot of this value is intangible; it's real as long as people think it is real.
A trillion-dollar coin is, fundamentally, no different than a dollar bill. It would represent our contract, in a universally-accepted form, to perform in the future.
Put it this way: if you have a brokerage account, and a 401(k), and so forth, what do you really have? Numbers on a piece of paper, and not much more --in fact, if, like me, you've stopped receiving monthly statements on paper, all you have are images on a computer screen. But you can change these images into bank deposits (another intangible) and eventually into cans of pork 'n' beans; and, ultimately, that's all you care about. The pixels floating out there, or the numbers on sheets of paper, are just a method of score-keeping: they verify your entitlement to that can of beans, whenever you might want to claim it.
There's nothing magic about a trillion-dollar coin; the Mint could strike one trillion dollar coins, or dollar bills for that matter (however, there are laws restricting the amount of paper currency --but not of coinage-- that can be in circulation at one time). It is well-established in traditional economic theory that, in our current circumstances, such printing would not be inflationary; indeed, in spite of a constant chorus of warning, over the past 5 years, from right-wing politicians about hyper-inflation, the dramatic expansion of government "stimulus" and significant annual federal deficits, there has been no inflation. We've even flirted with deflation from time to time. But physically printing all that volume of money would be time- and resource-consuming (even if it were legal); let's just take the large-denomination coin shortcut.
In its function, the trillion-dollar coin would be indistinguishable from debt; but then, all money is, debt, isn't it?
*The federal debt is, very roughly, equal to the current annual output of the national economy. Is that "too much" debt? Reasonable people may differ. But for all the "government ought to be run like a household" people, I have a question: How many of you bought your first house for an amount equal to your annual salary? Did that purchase mean you had "too much debt?" And did you cut back to two meals a day in response? That is, essentially, what we are being asked to do now, by the Right.
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