Friday, January 11, 2013

The Trillion Dollar Coin and Popular Monetarism


The trillions dollar coin solution for the debt ceiling limit has generated some funny news. The Republican National Congressional Committee twitted the picture above, suggesting that the coin would have to have its weight in platinum to be worth a trillion, and would be so huge as to sink the Titanic. Even Jon Stewart, who is in political matters incredibly perceptive (forget funny), bought into the monetarist madness. He thinks: "We don’t need some trillion-dollar coin gimmick. We need a way to get the world to take the U.S. dollar seriously again."

I'll spare you the obvious explanations of why all of these common sense views are incorrect (for that go here or here), but it is important to note (as I did before) that there is a persistence in popular culture of monetarist interpretations of history. The funny thing is that at least the so-called progressives that are against minting the coin are clearly okay with the debt ceiling being raised, and hence the expansion of public debt, which could in part be monetized. Which means that somehow printing paper is okay, but minting coins is a sin. Go figure.

And yes mint the coin already!

4 comments:

  1. de uma hora pra outra krugman virou um MMTer?

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  2. Matias, como voce avaliaria a economia da Venezuela sob o comando de Chavez? Eu confesso que não tenho muito insight sobre como funciona e se melhorou, piorou, se fazem superavits primarios, metas de inflação ou são mais parecidos a Argentina (que também conheço pouco)

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    Replies
    1. Veja os textos do Mark Weisbrot, que é quem mais sabe do assunto. Por exemplo, http://www.cepr.net/documents/publications/venezuela-2012-09.pdf

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