Alan Grayson Blasts Tea Party Debate Audience's Reaction To Health Care Question: 'It's Sadism'
9/12/11
http://www.huffingtonpost.com/2011/09/12/alan-grayson-tea-party-debate-health-care_n_959383.html
The jubilant shouts of members of the GOP audience encouraging the death of a hypothetical uninsured man bring to mind the 2009 House floor speech delivered by former Florida Rep. Alan Grayson, in which he famously charged: "The Republicans want you to die quickly if you get sick." Members of the crowd at the Tampa debate agree with Grayson.
CNN's Wolf Blitzer, the event's moderator, posed the hypothetical question to Rep. Ron Paul (R-Texas): What do you tell a guy who is sick, goes into a coma and doesn't have health insurance? Who pays for his coverage? "Are you saying society should just let him die?" Wolf Blitzer asked.
"Yeah!" several members of the crowd yelled out.
HuffPost asked Grayson what he thought of the crowd cheering for the death of the uninsured man. He writes:
My speech was about the fact I had been listening to the Republicans for months, and they literally had no plan to help all those millions of people who can’t see a doctor when they’re sick. So I said, in sort of a wry manner, that their plan was "don’t get sick." All I really wanted to do was just call attention to the stark absence of a Republican plan. But Fox, trying to take the heat off Joe Wilson and Sarah Palin I guess, transmogrified that into a charge that Republicans want to kill people.
What you saw tonight is something much more sinister than not having a healthcare plan. It's sadism, pure and simple. It's the same impulse that led people in the Coliseum to cheer when the lions ate the Christians. And that seems to be where we are heading -- bread and circuses, without the bread. The world that Hobbes wrote about -- "the war of all against all."
Showing posts with label Ron Paul. Show all posts
Showing posts with label Ron Paul. Show all posts
Saturday, September 17, 2011
Sunday, August 21, 2011
Ron Paul Deserves More Respect
Ivan Eland, August 16, 2011
http://original.antiwar.com/eland/2011/08/15/ron-paul-deserves-more-respect
Robalini's Note: Let's just take a step back for a second and analyze this. Ron Paul is a fringe candidate who deserves to be mocked and dismissed, while Michele Bachman is a respectable politician who must be taken seriously? This is patently absurd...
Although Ron Paul placed second in the Iowa straw poll, behind Michele Bachmann by the slimmest of margins, most media commentators — both left and right — refused to anoint him as one of the “big three” candidates remaining in the Republican presidential contest. Translated, the media gatekeepers, as they did in his 2008 campaign, are telling the American people that Paul should not be regarded as a serious candidate. Apparently, only Bachmann, Mitt Romney, and Rick Perry have somehow earned this exalted designation.
Although the Iowa straw poll does not represent a cross section of the Republican Party, at least some likely voters participated in it. Romney and Perry, both of whom did miserably in the poll, seem to have earned their place in the elite candidates club merely on the basis of media conjecture as to their future viability — based mostly on “political buzz” or fundraising potential.
When candidates are effectively cut out of most media coverage because they are deemed “not serious” or are predicted to have “no chance of winning,” this can become a self-fulfilling prophecy. Despite his impressive showing in the Iowa poll, Paul is receiving the same ill treatment by the media this go-around as last. An example of media disparagement of Paul’s views could be seen a couple of days earlier in the behavior of Fox’s Chris Wallace, who was moderating the Republican debate. Wallace zeroed in on Paul’s previous statements on Iran and nuclear weapons, including his opposition to sanctions against that country and this remark: “One can understand why they might want to become nuclear capable, if only to defend themselves and to be treated more respectfully.” Wallace asked Paul if his policy was really that President Obama was too tough, not too soft, on Iran.
In responding to Wallace’s question, Paul cast aside the conventional wisdom on U.S. policy vis-à-vis Iran and cogently opined against sanctions, arguing the historically accurate case that they can often lead to war with the sanctioned country — for example, sanctions preceded U.S. wars with Saddam Hussein in Iraq and Manuel Noriega in Panama. Unbelievably (in the eyes of the nearly always sanctimoniously interventionist American media), Paul had the temerity to actually empathize with another country’s feelings of insecurity and to argue for negotiating, even with odious regimes.
Just think of the agitation and the worrying of a country that might get a nuclear weapon some day. And just think of how many nuclear weapons surround Iran. The Chinese are there. The Indians are there. The Pakistanis are there. The Israelis are there. The United States is there. All these countries — China has nuclear weapons.
Incredulous that he was hearing someone actually say that another country might try to develop nuclear weapons for the same reason that the United States had developed them — to enhance its security — Wallace gave Paul another 15 seconds to explain this seemingly astonishing position, saying, “I just want to make sure I understand. So your policy towards Iran is, if they want to develop a nuclear weapon, that’s their right, no sanctions, no effort to stop them?”
Paul calmly replied that trying to stop Iran from getting a nuclear weapon only makes its feelings of insecurity worse. He added that “we tolerated the Soviets [getting nuclear weapons]; we didn’t attack them. And they were a much greater danger [than Iran] — they were the greatest danger to us in our whole history.” Paul could have added that the United States also declined to bomb the even more radical communist Mao Zedong as he took China into the nuclear club in the 1960s and threatened nuclear war with America. Iran has never made such threats to the United States.
Paul’s yes-to-negotiations-and-no-to-sanctions-and-war-with-Iran position holds up well when all the hype about Iran’s threat to the United States is brushed away and the facts are uncovered:
•Iran is a relatively poor country compared to the United States, and, even if it got nuclear weapons, it would have only a few warheads. Developing a long-range missile to carry those warheads half a world away is also difficult. In contrast, the United States already has such long-range missiles and also has the most capable nuclear arsenal on the planet, containing thousands of warheads. That huge arsenal and those missiles would likely deter, with a threat to Iran’s existence, any contemplated Iranian nuclear attack. With its small number of warheads, Iran could not similarly threaten the existence of the United States.
•A nuclear Iran may be more of a threat to nearby Israel, but Israel has 200-400 nuclear weapons and can also deter any potential Iranian attack with such a hefty atomic response capability.
•Although Iran’s regime has spouted Islamist rhetoric, its government usually behaves pragmatically, especially when dealing with much stronger countries, such as the United States and Israel.
Thus, Paul’s position on Iran is just one example of his opposition to interventionist and jingoistic U.S. foreign policies — about which the media either is astonished (à la Chris Wallace) or exhibits disdain. Yet the reason Paul has such resonance with a certain segment of the American people, despite the media’s derision, is because those people take the time to go beyond political slogans and conventional wisdom and listen to Paul’s facts, analysis, and cogent explanations of and solutions to policy problems.
http://original.antiwar.com/eland/2011/08/15/ron-paul-deserves-more-respect
Robalini's Note: Let's just take a step back for a second and analyze this. Ron Paul is a fringe candidate who deserves to be mocked and dismissed, while Michele Bachman is a respectable politician who must be taken seriously? This is patently absurd...
Although Ron Paul placed second in the Iowa straw poll, behind Michele Bachmann by the slimmest of margins, most media commentators — both left and right — refused to anoint him as one of the “big three” candidates remaining in the Republican presidential contest. Translated, the media gatekeepers, as they did in his 2008 campaign, are telling the American people that Paul should not be regarded as a serious candidate. Apparently, only Bachmann, Mitt Romney, and Rick Perry have somehow earned this exalted designation.
Although the Iowa straw poll does not represent a cross section of the Republican Party, at least some likely voters participated in it. Romney and Perry, both of whom did miserably in the poll, seem to have earned their place in the elite candidates club merely on the basis of media conjecture as to their future viability — based mostly on “political buzz” or fundraising potential.
When candidates are effectively cut out of most media coverage because they are deemed “not serious” or are predicted to have “no chance of winning,” this can become a self-fulfilling prophecy. Despite his impressive showing in the Iowa poll, Paul is receiving the same ill treatment by the media this go-around as last. An example of media disparagement of Paul’s views could be seen a couple of days earlier in the behavior of Fox’s Chris Wallace, who was moderating the Republican debate. Wallace zeroed in on Paul’s previous statements on Iran and nuclear weapons, including his opposition to sanctions against that country and this remark: “One can understand why they might want to become nuclear capable, if only to defend themselves and to be treated more respectfully.” Wallace asked Paul if his policy was really that President Obama was too tough, not too soft, on Iran.
In responding to Wallace’s question, Paul cast aside the conventional wisdom on U.S. policy vis-à-vis Iran and cogently opined against sanctions, arguing the historically accurate case that they can often lead to war with the sanctioned country — for example, sanctions preceded U.S. wars with Saddam Hussein in Iraq and Manuel Noriega in Panama. Unbelievably (in the eyes of the nearly always sanctimoniously interventionist American media), Paul had the temerity to actually empathize with another country’s feelings of insecurity and to argue for negotiating, even with odious regimes.
Just think of the agitation and the worrying of a country that might get a nuclear weapon some day. And just think of how many nuclear weapons surround Iran. The Chinese are there. The Indians are there. The Pakistanis are there. The Israelis are there. The United States is there. All these countries — China has nuclear weapons.
Incredulous that he was hearing someone actually say that another country might try to develop nuclear weapons for the same reason that the United States had developed them — to enhance its security — Wallace gave Paul another 15 seconds to explain this seemingly astonishing position, saying, “I just want to make sure I understand. So your policy towards Iran is, if they want to develop a nuclear weapon, that’s their right, no sanctions, no effort to stop them?”
Paul calmly replied that trying to stop Iran from getting a nuclear weapon only makes its feelings of insecurity worse. He added that “we tolerated the Soviets [getting nuclear weapons]; we didn’t attack them. And they were a much greater danger [than Iran] — they were the greatest danger to us in our whole history.” Paul could have added that the United States also declined to bomb the even more radical communist Mao Zedong as he took China into the nuclear club in the 1960s and threatened nuclear war with America. Iran has never made such threats to the United States.
Paul’s yes-to-negotiations-and-no-to-sanctions-and-war-with-Iran position holds up well when all the hype about Iran’s threat to the United States is brushed away and the facts are uncovered:
•Iran is a relatively poor country compared to the United States, and, even if it got nuclear weapons, it would have only a few warheads. Developing a long-range missile to carry those warheads half a world away is also difficult. In contrast, the United States already has such long-range missiles and also has the most capable nuclear arsenal on the planet, containing thousands of warheads. That huge arsenal and those missiles would likely deter, with a threat to Iran’s existence, any contemplated Iranian nuclear attack. With its small number of warheads, Iran could not similarly threaten the existence of the United States.
•A nuclear Iran may be more of a threat to nearby Israel, but Israel has 200-400 nuclear weapons and can also deter any potential Iranian attack with such a hefty atomic response capability.
•Although Iran’s regime has spouted Islamist rhetoric, its government usually behaves pragmatically, especially when dealing with much stronger countries, such as the United States and Israel.
Thus, Paul’s position on Iran is just one example of his opposition to interventionist and jingoistic U.S. foreign policies — about which the media either is astonished (à la Chris Wallace) or exhibits disdain. Yet the reason Paul has such resonance with a certain segment of the American people, despite the media’s derision, is because those people take the time to go beyond political slogans and conventional wisdom and listen to Paul’s facts, analysis, and cogent explanations of and solutions to policy problems.
Awesome Quotes: Ron Paul
“Obviously they’re not. People are individuals, they’re not groups and they’re not companies. Individuals have rights, they’re not collective. You can’t duck that. So individuals should be responsible for corporations, but they shouldn’t be a new creature, so to speak. Rights and obligations should be always back to the individual.”
Ron Paul on Mitt Romney's claim that "corporations are people"
Ron Paul on Mitt Romney's claim that "corporations are people"
Thursday, August 18, 2011
The Market Has Spoken: Austerity Is Bad for Business
http://globalresearch.ca/index.php?context=va&aid=25916
Ellen Brown
Global Research, August 6, 2011
Web of Debt
It used to be that when the Fed Chairman spoke, the market listened; but the Chairman has lost his mystique. Now when the market speaks, politicians listen. Hopefully they heard what the market just said: government cutbacks are bad for business. The government needs to spend more, not less. Fortunately, there are viable ways to do this while still balancing the budget.
On Thursday, August 4, the Dow Jones Industrial Average fell 512 points, the biggest stock market drop since the collapse of September 2008.
Why? Weren't the markets supposed to rebound after the debt ceiling agreement was reached on Monday, avoiding U.S. default and a downgrade of U.S. debt?
So we were told, but the market apparently understands what politicians don't: the debt deal is a death deal for the economy.
Reducing government spending by $2.2 trillion over a decade, as Congress just agreed to do, will kill any hopes of economic recovery. We're looking at a double-dip recession.
The figure is actually more than $2.2 trillion. As Jack Rasmus pointed out on Truthout on August 4th:
Economists estimate the "multiplier" from government spending at about 1.5. That means for every $1 cut in government spending, about $1.5 dollars are taken out of the economy. The first year of cuts are therefore $375 billion to $400 billion in terms of their economic effect. Ironically, that's about equal to the spending increase from Obama's 2009 initial stimulus package. In other words, we are about to extract from the economy - now showing multiple signs of weakening badly - the original spending stimulus of 2009!
As others have pointed out, that magnitude of spending contraction will result in 1.5 million to 2 million more jobs lost. That's also about all the jobs created since the trough of the recession in June 2009. In other words, the job market will be thrown back two years as well.
We're not moving forward. We're moving backward. The hand-wringing is all about the "debt crisis," but the national debt is not what has stalled the economy, and the crisis was not created by Social Security or Medicare, which are being set up to take the fall. It was created by Wall Street, which has squeezed trillions in bailout money from the government and the taxpayers; and by the military, which has squeezed trillions more for an amorphous and unending "War on Terror." But the hits are slated to fall on the so-called "entitlements" - a social safety net that we the people are actually entitled to, because we paid for them with taxes.
The Problem Is Not Debt But a Shrinking Money Supply
The markets are not reacting to a "debt crisis." They do not look at charts ten years out. They look at present indicators of jobs and sales, which have turned persistently negative. Jobs and sales are both dependent on "demand," which means getting money into the pockets of consumers; and the money supply today has shrunk.
We don't see this shrinkage because it is primarily in the "shadow banking system," the thing that collapsed in 2008. The shadow banking system used to be reflected in M3, but the Fed no longer reports it. In July 2010, however, the New York Fed posted on its website a staff report titled "Shadow Banking." It said that the shadow banking system had shrunk by $5 trillion since its peak in March 2008, when it was valued at about $20 trillion - actually larger than the traditional banking system. In July 2010, the shadow system was down to about $15 trillion, compared to $13 trillion for the traditional banking system.
Only about $2 trillion of this shrinkage has been replaced with the Fed's quantitative easing programs, leaving a $3 trillion hole to be filled; and only the government is in a position to fill it. We have been sold the idea that there is a "debt crisis" when there is really a liquidity crisis. Paying down the federal debt when money is already scarce just makes matters worse. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.
Most of our money now comes into the world as debt, which is created on the books of banks and lent into the economy. If there were no debt, there would be no money to run the economy; and today, private debt has collapsed. Encouraged by Fed policy, banks have tightened up lending and are sitting on their money, shrinking the circulating money supply and the economy.
Creative Ways to Balance the Budget
The federal debt has not been paid off since the days of Andrew Jackson, and it does not need to be paid off. It is just rolled over from year to year. The only real danger posed by a growing federal debt is the interest burden, but that has not been a problem yet. The Congressional Budget Office reported in December 2010:
[A] sharp drop in interest rates has held down the amount of interest that the government pays on [the national] debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.
The interest burden will increase if the federal debt continues to grow, but that problem can be solved by mandating the Federal Reserve to buy the government's debt. The Fed rebates its profits to the government after deducting its costs, making the money nearly interest-free. The Fed is already doing this with its quantitative easing programs and now holds nearly $1.7 trillion in federal securities.
If Congress must maintain its debt ceiling, there are other ways to balance the budget and avoid a growing debt. Ron Paul has brought a creative bill that would eliminate the $1.7 trillion deficit simply by having the Fed tear up its federal securities. No creditors would be harmed, since the money was generated with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.
The Trillion Dollar Coin Alternative
The most direct solution to the debt problem is for the government to fund its budget with government-issued money. One alternative would be for the Treasury to issue U.S. Notes, as was done in the Civil War by President Lincoln.
Another alternative was suggested in my book Web of Debt in 2007: the government could simply mint some trillion dollar coins. Congress has the Constitutional power to "coin money," and no limit is put on the value of the coins it creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s.
This idea is now getting some attention from economists. According to a July 29th article in the Johnsville News titled "Coin Trick: The Trillion Dollar Coin":
The idea just started to get serious traction the last few days as the debt stalemate has grown more intense and partisan. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed yesterday (July 28th).
Today the idea has gone mainstream. It is covered by NY Magazine, CNBC, and The Economist. Even Nobel economist Paul Krugman of the NY Times has weighed in. Annie Lowrey of Slate discusses it as one of several gimmicks the government could use to resolve the debt-ceiling debacle. Krugman added:
These things [like coin seigniorage] sound ridiculous - but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?
The debt ceiling itself was a legal trick, a form of extortion based on a century-old statute that conflicts with the Constitution. However, said the Johnsville News article, "coin seigniorage is not a scam. It is legal . . . . This plan looks like it might be Obama's ace in the hole . . . ."
The article cites Warren Mosler, founder of MMT (Modern Monetary Theory), who reviewed the idea in a January 20th blog post and concluded it would work operationally.
Scott Fullwiler, associate professor of economics at Wartburg College, also did a comprehensive analysis and concluded that the trillion dollar coin alternative was unlikely to result in inflation. Comparing it to Ron Paul's plan, he wrote:
This option is much like Ron Paul's proposal-actually identical in terms of the effect on the debt ceiling and the Treasury-except that his proposal would destroy all of the Fed's capital (and then some), which is a potential problem politically . . . though not operationally, and which the Fed is therefore very unlikely to agree to.
On the inflation question, just because the Treasury has money in its account doesn't mean it can spend the funds. It needs the usual Congressional approval. To keep a lid on spending, Congress just needs to be instructed in basic economics. They can spend on goods and services up to full employment without creating price inflation (since supply and demand will rise together). After that, they need to tax -- not to fund the budget, but to pull excess money back in and avoid driving up prices.
Spending More While Borrowing Less
In an economic downturn, the government needs to spend more, not less, as history shows. This can be done while still balancing the budget, simply by taking back the government's Constitutional power to issue money.
The budget crisis is an artificial one, and the current "solution" will only guarantee a deeper recession and more widespread suffering. Rather than obsessing over deficits and debt, the government needs to turn its focus to jobs, sales and quality of life.
------------------------
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and "the money trust." Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.
Ellen Brown is a frequent contributor to Global Research.
Please support Global Research
Global Research relies on the financial support of its readers.
Your endorsement is greatly appreciated
Subscribe to the Global Research E-Newsletter Spread the word! Forward to a friend!
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: publications@globalresearch.ca
http://www.globalresearch.ca/ contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: media@globalresearch.ca
Copyright © Ellen Brown, Web of Debt, 2011
Ellen Brown
Global Research, August 6, 2011
Web of Debt
It used to be that when the Fed Chairman spoke, the market listened; but the Chairman has lost his mystique. Now when the market speaks, politicians listen. Hopefully they heard what the market just said: government cutbacks are bad for business. The government needs to spend more, not less. Fortunately, there are viable ways to do this while still balancing the budget.
On Thursday, August 4, the Dow Jones Industrial Average fell 512 points, the biggest stock market drop since the collapse of September 2008.
Why? Weren't the markets supposed to rebound after the debt ceiling agreement was reached on Monday, avoiding U.S. default and a downgrade of U.S. debt?
So we were told, but the market apparently understands what politicians don't: the debt deal is a death deal for the economy.
Reducing government spending by $2.2 trillion over a decade, as Congress just agreed to do, will kill any hopes of economic recovery. We're looking at a double-dip recession.
The figure is actually more than $2.2 trillion. As Jack Rasmus pointed out on Truthout on August 4th:
Economists estimate the "multiplier" from government spending at about 1.5. That means for every $1 cut in government spending, about $1.5 dollars are taken out of the economy. The first year of cuts are therefore $375 billion to $400 billion in terms of their economic effect. Ironically, that's about equal to the spending increase from Obama's 2009 initial stimulus package. In other words, we are about to extract from the economy - now showing multiple signs of weakening badly - the original spending stimulus of 2009!
As others have pointed out, that magnitude of spending contraction will result in 1.5 million to 2 million more jobs lost. That's also about all the jobs created since the trough of the recession in June 2009. In other words, the job market will be thrown back two years as well.
We're not moving forward. We're moving backward. The hand-wringing is all about the "debt crisis," but the national debt is not what has stalled the economy, and the crisis was not created by Social Security or Medicare, which are being set up to take the fall. It was created by Wall Street, which has squeezed trillions in bailout money from the government and the taxpayers; and by the military, which has squeezed trillions more for an amorphous and unending "War on Terror." But the hits are slated to fall on the so-called "entitlements" - a social safety net that we the people are actually entitled to, because we paid for them with taxes.
The Problem Is Not Debt But a Shrinking Money Supply
The markets are not reacting to a "debt crisis." They do not look at charts ten years out. They look at present indicators of jobs and sales, which have turned persistently negative. Jobs and sales are both dependent on "demand," which means getting money into the pockets of consumers; and the money supply today has shrunk.
We don't see this shrinkage because it is primarily in the "shadow banking system," the thing that collapsed in 2008. The shadow banking system used to be reflected in M3, but the Fed no longer reports it. In July 2010, however, the New York Fed posted on its website a staff report titled "Shadow Banking." It said that the shadow banking system had shrunk by $5 trillion since its peak in March 2008, when it was valued at about $20 trillion - actually larger than the traditional banking system. In July 2010, the shadow system was down to about $15 trillion, compared to $13 trillion for the traditional banking system.
Only about $2 trillion of this shrinkage has been replaced with the Fed's quantitative easing programs, leaving a $3 trillion hole to be filled; and only the government is in a position to fill it. We have been sold the idea that there is a "debt crisis" when there is really a liquidity crisis. Paying down the federal debt when money is already scarce just makes matters worse. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession.
Most of our money now comes into the world as debt, which is created on the books of banks and lent into the economy. If there were no debt, there would be no money to run the economy; and today, private debt has collapsed. Encouraged by Fed policy, banks have tightened up lending and are sitting on their money, shrinking the circulating money supply and the economy.
Creative Ways to Balance the Budget
The federal debt has not been paid off since the days of Andrew Jackson, and it does not need to be paid off. It is just rolled over from year to year. The only real danger posed by a growing federal debt is the interest burden, but that has not been a problem yet. The Congressional Budget Office reported in December 2010:
[A] sharp drop in interest rates has held down the amount of interest that the government pays on [the national] debt. In 2010, net interest outlays totaled $197 billion, or 1.4 percent of GDP--a smaller share of GDP than they accounted for during most of the past decade.
The interest burden will increase if the federal debt continues to grow, but that problem can be solved by mandating the Federal Reserve to buy the government's debt. The Fed rebates its profits to the government after deducting its costs, making the money nearly interest-free. The Fed is already doing this with its quantitative easing programs and now holds nearly $1.7 trillion in federal securities.
If Congress must maintain its debt ceiling, there are other ways to balance the budget and avoid a growing debt. Ron Paul has brought a creative bill that would eliminate the $1.7 trillion deficit simply by having the Fed tear up its federal securities. No creditors would be harmed, since the money was generated with a computer keystroke in the first place. The government would just be canceling a debt to itself and saving the interest.
The Trillion Dollar Coin Alternative
The most direct solution to the debt problem is for the government to fund its budget with government-issued money. One alternative would be for the Treasury to issue U.S. Notes, as was done in the Civil War by President Lincoln.
Another alternative was suggested in my book Web of Debt in 2007: the government could simply mint some trillion dollar coins. Congress has the Constitutional power to "coin money," and no limit is put on the value of the coins it creates, as was pointed out by a chairman of the House Coinage Subcommittee in the 1980s.
This idea is now getting some attention from economists. According to a July 29th article in the Johnsville News titled "Coin Trick: The Trillion Dollar Coin":
The idea just started to get serious traction the last few days as the debt stalemate has grown more intense and partisan. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed yesterday (July 28th).
Today the idea has gone mainstream. It is covered by NY Magazine, CNBC, and The Economist. Even Nobel economist Paul Krugman of the NY Times has weighed in. Annie Lowrey of Slate discusses it as one of several gimmicks the government could use to resolve the debt-ceiling debacle. Krugman added:
These things [like coin seigniorage] sound ridiculous - but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?
The debt ceiling itself was a legal trick, a form of extortion based on a century-old statute that conflicts with the Constitution. However, said the Johnsville News article, "coin seigniorage is not a scam. It is legal . . . . This plan looks like it might be Obama's ace in the hole . . . ."
The article cites Warren Mosler, founder of MMT (Modern Monetary Theory), who reviewed the idea in a January 20th blog post and concluded it would work operationally.
Scott Fullwiler, associate professor of economics at Wartburg College, also did a comprehensive analysis and concluded that the trillion dollar coin alternative was unlikely to result in inflation. Comparing it to Ron Paul's plan, he wrote:
This option is much like Ron Paul's proposal-actually identical in terms of the effect on the debt ceiling and the Treasury-except that his proposal would destroy all of the Fed's capital (and then some), which is a potential problem politically . . . though not operationally, and which the Fed is therefore very unlikely to agree to.
On the inflation question, just because the Treasury has money in its account doesn't mean it can spend the funds. It needs the usual Congressional approval. To keep a lid on spending, Congress just needs to be instructed in basic economics. They can spend on goods and services up to full employment without creating price inflation (since supply and demand will rise together). After that, they need to tax -- not to fund the budget, but to pull excess money back in and avoid driving up prices.
Spending More While Borrowing Less
In an economic downturn, the government needs to spend more, not less, as history shows. This can be done while still balancing the budget, simply by taking back the government's Constitutional power to issue money.
The budget crisis is an artificial one, and the current "solution" will only guarantee a deeper recession and more widespread suffering. Rather than obsessing over deficits and debt, the government needs to turn its focus to jobs, sales and quality of life.
------------------------
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and "the money trust." Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.
Ellen Brown is a frequent contributor to Global Research.
Please support Global Research
Global Research relies on the financial support of its readers.
Your endorsement is greatly appreciated
Subscribe to the Global Research E-Newsletter Spread the word! Forward to a friend!
Disclaimer: The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of the Centre for Research on Globalization. The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible or liable for any inaccurate or incorrect statements contained in this article.
The CRG grants permission to cross-post original Global Research articles on community internet sites as long as the text & title are not modified. The source and the author's copyright must be displayed. For publication of Global Research articles in print or other forms including commercial internet sites, contact: publications@globalresearch.ca
http://www.globalresearch.ca/ contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.
For media inquiries: media@globalresearch.ca
Copyright © Ellen Brown, Web of Debt, 2011
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