Man must cease attributing his problems to his environment,
and learn to exercise his will
his personal responsibility.
Albert Schweitzer
Progressives in a State of Denial on the Debt Ceiling
Probably the most interesting argument, to me, in the debate is the trillion-dollar coin would cut out the middle man: after all, isn't the Fed already effectively monetizing the debt, creating money out of thin air, in fact returns interest payments to the government: "free" loans de facto (see here, for instance). I think one of the more humorous things about said essay is that it seems to to regard private sector dealing in Treasuries as an intrinsically crony activity as if public debt is more equal than private debt and a bank cartel providing "free" debt service to the government does not have an ultimate crony relationship.
I saw an email float by today saying the Senate Dems would stand in support of the "Constitutional" approach, i.e., the Fourteenth Amendment. The Fourteenth Amendment simply requires the President to service the American debt; interest payments are about $300B a year and federal revenues over $2.5T. Obama may not like cutting other budget items, but the Fourteenth Amendment in no way implies funding is guaranteed for priorities other than servicing the debt. The President would violate the Constitution if he failed to service the debt; that would be an impeachable act. The Senate can't do squat without the House's consent.
As for pretending that a law intended to give the Treasury to mint differently denominated platinum coins (for coin collectors) is a loophole, whereby the Administration can work around the Congress: manifestly unconstitutional. It reminds me how Martin Luther responded to the issue of the Real Presence of Christ in the Eucharist: "I am captured by the Word of God and cannot find a way out. The words are there, and they are too strong for me." The Constitution vests authority to authorize increases of debt to the Congress, NOT the Executive Branch. The only way that could change is by an amendment to the Constitution.
The market monetarist Lars Christensen makes a strong case for the rule of law, rule-based monetary policy versus discretionary Fed or Treasury policy. I have reservations about NGDP targeting, though. I think regulatory or other policy is impeding growth, not monetary policy. Vuk Vukovic does a good job addressing a similar perspective:
Back in the US, a lot of business got outsourced to Asia which made a lot of workers in the West redundant, but no one fired them until it became too costly to keep them on. However this was a natural transition due to a technological change of the new decade. Now there must be a process or rediscovering new skills and new ways to create and sustain value in the West. This is what we should be focused on; creating new jobs, not restoring old ones. Creating a new long-run growth path for the economy, not pegging a target for the old growth path.
When thinking about how to solve a recession one needs to first understand what caused it. Focusing on monetary policy alone would be wrong. Reforming the welfare state, reforming the financial system, stop bailing out zombie banks, and rediscovering new patterns of production and specialization is the way forward.Ty Cowen thinks these gimmicks actually would have the unintended consequences for a political victory to the GOP without responsibility of the unpopularity of a government shutdown. For other perspectives, see Sumner, Kevin Drum, and Josh Hendrickson, not to mention multiple posts at the free banking website, e.g., Steve Horwitz.
Michael Savage and the Nationalist Party? Thumbs DOWN!
I have never read or listened to Savage's radio show, but I want to take issue with the bashing of Boehner. He's holding a weak hand with the Senate and White House playing prevent defense against long-overdue reforms of profligate spending and over $80T in unfunded liabilities, There's no reason why the GOP should not be in control of the Senate. Very winnable seats the last two elections in Indiana, Nevada, Missouri, Delaware, Nevada, Montana, Colorado, North Dakota, Wisconsin, Virginia, Maine and other places were lost in part because of more ideological candidates; red meat policies turn off mainstream voters. Running anti-immigrant policies, pushing on a string English as the official language, etc. may placate an activist base but turns off a wider voter base. I'm afraid all Savage will do is split the conservative coalition.
The term 'nationalist' comes across as statist and/or jingoist. I haven't coined my previously discussed wish for a pro-liberty party; I've toyed with LLP (unalienable rights) or Free Federalist (I want to contrast against the old Federalist Party with its mercantilist policies).
Musical Interlude: My Favorite Groups
The Carpenters, "Your Baby Doesn't Love You Anymore".This is effectively the last chart hit for the group, their last top 20 adult contemporary hit, yet another remake, this one an obscure hit from the 1960's. (Each sibling had a top 20 hit on their own project (in Richard's case, with a guest vocalist), which I hope to cover over the weekend.)
