Some fair proportion of readers are already aware of the proposal to have the U.S. Mint produce a $1 trillion face amount coin to be deposited at the Federal Reserve and credited to the account of the Treasury Department to pay Federal bills. The $1 trillion would render the ‘debt ceiling’ debate irrelevant because it wouldn’t be funded with debt. It would demonstrate the contrived nature of the austerity ‘debate’ in Washington. Most fundamentally, it would lay bare the social nature of the institutions put forward as immutable facts. The current arrangement of affairs, debt based money, is not socially ‘neutral,’ it serves the political economic interests of some to the detriment of others. By making this visible, the trillion-dollar coin idea is extremely useful. So of course, the White House has said it has no use for the idea....
Mr. Obama’s rapid dismissal of the platinum coin idea, even as a bargaining piece in ‘negotiations’ with Congressional Republicans (and Democrats), likely has two components. In the first, Mr. Obama has been a staunch proponent and defender through every policy that has come before him of the reigning plutocracy. The insight into the social nature of our institutions provided by the platinum coin idea is no doubt threatening in that it could lead to a lot of other uncomfortable questions being raised about the existing social order. Second, by removing the platinum coin as a strategic tool, Mr. Obama can allow Republican ‘austerians’ to take responsibility for cuts in social programs such as Social Security, Medicare and Medicaid that he supports but that his long-suffering political base doesn’t. But again, if the Federal government can simply create the money to pay for these programs, as it can and should, what could possibly be the motivation for hiding behind the canard of ‘fiscal discipline’ to cut them other than fealty to plutocrat control of the political economy?
In dismissing the platinum coin idea the White House pointed to the Treasury Department’s contention it wouldn’t put the idea forward and the Federal Reserve’s claim it wouldn’t accept the coin if offered. Nonsense. The Treasury Department will do what the President tells it to do and in legal disputes with the Federal Reserve over established law the Treasury Department decides the matter. The further contention the monetary and financial systems could be called into question and / or be discredited assumes they haven’t been discredited already. Even casual readers of the business press would have noticed everyday reporting on the doings of the major banks and the Federal Reserve reads like angry missives from the radical left of decades past. Radical critique of the financial status quo is thoroughly mainstream in 2013. A former Citicorps executive to replace Timothy Geithner at Treasury? Fuck you!
Regardless of whether or not official Washington uses the idea, radical versions of the platinum coin idea should continue to be put forward. The broad frames used in political-economic debates in Western Capitols are designed to bring about outcomes in line with the interests of Western plutocrats. In fact, without effectively calling into question these frames the cognitive disjuncture needed to shift these institutions back toward the public interest won’t be found. The existing money system is at the heart of these institutions and it is not socially ‘neutral.’ And only by putting it forward as if it was does the existing order retain control of ‘the conversation.’You get the idea. Very understandable analysis and good framing. Read the whole piece.