Silliness of behaviours of our politicians knows no limits - the lawmakers pass laws which require funding even though most of those voting on any particular bill may not be aware of its motivation or consequences, not to mention its content. In order to garner public exposure, they subsequently, decide to pronounce faux concerns regarding paying for the programs which had been approved. This, then, results in a political impasse with respect to 'balancing the budget'.
Since most politicians are inept as regards economic theory, they frequently depend upon 'experts' who, it turns out, are almost equally ignorant; however, the economists have completed the formal qualifications to justify their claim(s) to be 'experts'. The result of this sad situation is that President Obama proclaims on tv, that the United States is 'broke' and then goes on to explain how the financial operation of the government is similar to that of a corporation or of a family. While one who understands modern money theory (MMT) knows these claims to be incorrect, the people who are running the government of the US, as well as their trusted expert advisers, are perfectly content to live in their ignorance. as it serves their purpose to appear to be doing something of importance. The politicians are adamant that they should spend their time and the peoples' tax moneys pursuing a solution to the fiscal debt crisis which they claim will enslave future Americans even when such a threat does not exist.
The concept of the Trillion Dollar Coin was initially proposed at Warren Mosler's blog site by a lawyer who is familiar with laws involving the power of the US Treasury Dept. Those 1996 laws allow the Congress to coin money that the government may use for funding of operations; furthermore, any coins minted by the US Government (sovereign currency) may have a value unrelated to the going commercial value of those coins (thanks to former Pres Dick Nixon's insatiable pursuit of power).
This insight is understood by MMT economists, though, it does not yet appear to be understood by the neo-libleral or hard money crowds upon which the ignorant politicians depend for their mus-understanding of economics/finance. The Treasury Dept is empowered to create platinum coins of any denomination they may decide is necessary, desirable, adequate, etc. to serve a useful public purpose; thus, they can create platinum coins with a face value of $1T, $5T, $50T, etc and without limit. Unfortunately, the Treasury Secty Geithner (a Robt Rubin acolyte), a lawyer by profession, was/is uninterested in public purpose, thus, he dismissed the suggested proposal and belittled the TDC idea. The idea of the TDC is that should such exist, the Federal Reserve would have to make available currency equivalent to the notational value of the coin. The coin would not have to be minted from $1T-, $5T-, $50T-worth of commercially available metal any more so that a $100 Federal Reserve Note contains $100 worth of processed primary material such as wood, ink, cloth, or whatever; it only need be imprinted with some useful, convenient notational value to be determined by the Treasury Dept. With the coin at the Federal Reserve, the Dept of Treasury could dispense currency to fund any and all programs approved by Congress and Treasury Dept then signed by the President. In other words, the big attention-generating confrontation between the spokes-people for the Republicans and Democrats could be avoided and the Congress would have time to go and read the existing legislation to determine whether any unnecessary proposed legislation should be repealed, cancelled, etc. On the other hand, government lawmakers should not cancel allocations of funds to facilitate public-spirited projects even if the party out of power had already conducted adequate oversight to determine that such projects needed to be done.
Joe Firestone is quite familiar with government operations and has been an ardent advocate of concepts developed by a group of economists (some of whom are affiliated with the Economics Dept of the UMKC) who understand how our fiat (US Government-created) currency works and have developed the ideas which are summarized as modern money/monetary theory (MMT). For a long time (centuries), various clever (cunning) individuals have influenced the development of ideas designed to obfuscate the language to mislead the less wealthy and poor (99.99%) in order to persuade them that the wealthy individuals (0.01% or thereabouts) knew how a government should work. In actual fact they have succeeded in enhancing their own welfare to the detriment of society as a whole. Over the years, and especially since the Democrats came to power in the election of 1932, the main stream media (MSM) has been promoting the ideas of the 0.01% with propaganda suggesting that our politicians should exercise discipline with respect to government spending habits because government spending has frequently been overdone, misdirected, or otherwise misused. Such efforts have been especially overdone in the recent three/four decades as both major political parties have ceased supporting populist-related projects in favour of policies to enhance the well-being of their wealthy campaign-funding donors.
Peter Peterson, main billionaire member of the Concord Coalition (organized in the 1990s to assure that there was agreement between the economics as understood by that former Secty of Commerce and several influential Senators)
From the website:
"The Concord Coalition is dedicated to educating the public about the causes and consequences of federal budget deficits, the long-term challenges facing America's unsustainable entitlement programs, and how to build a sound economy for future generations. The Concord Coalition's national field staff and loyal group of volunteers cover the country holding lectures, leading interactive exercises, conducting classes, giving media interviews, and briefing elected officials and their staffs.
[...]"
The Concord Coalition has been particularly influential in trying to convince the public that they know what will happen in the future if the politicians do not follow their advice. While the Concord Coalition propaganda is incorrect and alarmist, most Congressmen are only too happy to follow the advice of any wealthy insider who lines their campaign coffers and then facilitates employment if/when they lose and election.
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