The unimportant news thread

[Spotted Horses]

I keep reading that the U.S. has it its debt ceiling and that "extraordinary measures" are being taken to avoid default, but no information about what these extraordinary measures are, and whether they are any different than the measures taken every other time Congress plays chicken over the debt ceiling. Am I going to see Mt Rushmore on eBay?

[Karl Henning]

I keep reading that the U.S. has it its debt ceiling and that "extraordinary measures" are being taken to avoid default, but no information about what these extraordinary measures are, and whether they are any different than the measures taken every other time Congress plays chicken over the debt ceiling. Am I going to see Mt Rushmore on eBay?

Senate Minority Leader Mitch McConnell (R-Ky.) said on Thursday that it is important to remember that the country "must never default on its debt."

And just how much sway does McConnell have with the Chaos Monkey Caucus?

[Spotted Horses]

Senate Minority Leader Mitch McConnell (R-Ky.) said on Thursday that it is important to remember that the country "must never default on its debt."

And just how much sway does McConnell have with the Chaos Monkey Caucus?

McConnell specializes in a more dignified style of chaos.

[Todd]

Am I going to see Mt Rushmore on eBay?

That's only a National Monument, so it would not bring in enough.  The Grand Canyon should be sold.

It is telling that the debt ceiling has been in place for over a century and has not been removed.  That indicates that it has some political utility. 

Anyway, June is when fireworks could start. 

[JBS]

I keep reading that the U.S. has it its debt ceiling and that "extraordinary measures" are being taken to avoid default, but no information about what these extraordinary measures are, and whether they are any different than the measures taken every other time Congress plays chicken over the debt ceiling. Am I going to see Mt Rushmore on eBay?

They're more like "These 10 Wierd Accounting Tricks Will Astonish You!", but I don't remember what they are. Perhaps Todd or Drogulus can elaborate.

Some of the People Who Think They Should Be Taken Seriously On Stuff They Know Little Or Nothing About advocate coining a single $1 Trillion coin (from platinum, IIRC).  This would do...something or other. It probably belongs in the Weird Accounting Tricks folder.

[drogulus]

    The federal gov't creates money by spending and taxes it back to control the value. If there are excess savings (reserves) some is swapped for interest bearing dollars, otherwise interest rates will drop to zero. Cool, there's nothing else to be done. Fiscal policy sets any limit that needs to be set. That will be full employment/output, give or take.

    A country will default on debt in a currency it doesn't create. That's a real debt crisis.

    A country that can create a huge pool of savings in its own currency is what we call "rich". It has a fully functioning national debt which grows as the economy does, though unevenly.

    You can ask a standard issue libraservative economist if they would cancel the debt with a button push and many of them will actually say yes. But you can ask them again if they would push the button to extinguish all the US Treasury savings. Speak up, I can't hear you. It's an "absence of thought" experiment.

[SimonNZ]

It is telling that the debt ceiling has been in place for over a century and has not been removed.  That indicates that it has some political utility. 

That doesn't follow at all.

And it's still just regular "brinksmanship" is it? With these chaos monkeys?

[drogulus]

That doesn't follow at all.

And it's still just regular "brinksmanship" is it? With these chaos monkeys?

    It's almost that, but I think there's a beliefy element underneath. The US has been off the gold standard for decades, and now operates on a modern view of money as state credit/debt. The old view was money was stuff, and something you can run out of. On this view it makes sense to say "where will the money come from?"

    The modern view makes the question meaningless. The US can spend money and tax it back, but "having" or "not having" isn't in there. Something like a trust fund is an accounting gimmick, not something that can "run out".

    The failure comes from changing the money concept at the level of operations while the political class doesn't change beliefs to match. The technical people at the Treasury, Fed and parties they deal with know exactly how this works. Above them they don't. They blabber about dollars running out like it was 1899.

    A paper was published in 1998 that investigated the view I outline as an effort to disprove the thesis. The conclusion reached is, well.....

     Can Taxes and Bonds Finance Government Spending?

Thus, while bank money (Ml) is destroyed when demand deposits are used to pay taxes,
the government's money, HPM, is destroyed as the funds are placed into the Treasury's account
at the Fed. Viewed this way, it can be convincingly argued that the money collected from taxation
and bond sales cannot possibly finance the government's spending. This is because in order to
'get its hands on' the proceeds from taxation and bond sales, the government must destroy the
money it has collected. Clearly, government spending cannot be financed by money that is
destroyed when received in payment to the State!


     "Tax and spend" is impossible. You can't spend what taxation has destroyed. All spending dollars are new and have nothing to do with the process of tax redemption.

     I encourage the strong in spirit to read the whole paper and especially the details of reserve effects in the banking system.
     

[drogulus]

    Biden is a hoarder. Is it time to invoke the 25th amendment? I don't think "Oh, that's just Joe" covers this kind of thing. The amendment does.

   

     On a lighter note, Supreme Piece of Shit Kavanaugh is having a bad moment.

[drogulus]

    Since people have no effective means of worrying about sovereign debt in the language of economics (to say nothing about english), it's a welcome alternative to worry about ceilings. I would say that's the point except there isn't one. Aha, that's the point!
   

[Karl Henning]

What the Weird Clash Over Gas Stoves Tells Us About Conservatives and Risk

[Todd]

Brazil and Argentina to start preparations for a common currency

[Dry Brett Kavanaugh]

NY Times - Can Germany Be a Great Military Power Again?


https://www.nytimes.com/2023/01/24/magazine/germany-military-army.html

[Todd]

Mixed messages:

Health Canada recommends limiting alcohol to just 2 drinks per week

Canada Moves to Decriminalize Possession of 'Hard' Drugs

Decriminalization is in BC.  Oregon decriminalized all illicit drugs a couple years ago.  Everything is peachy.

[SimonNZ]

Mixed messages:

Health Canada recommends limiting alcohol to just 2 drinks per week

Canada Moves to Decriminalize Possession of 'Hard' Drugs

Decriminalization is in BC.  Oregon decriminalized all illicit drugs a couple years ago.  Everything is peachy.

See, your posting history is such that I have no idea if you believe that everything is in fact peachy or that everything is not at all peachy.

[Spotted Horses]

Mixed messages:

Health Canada recommends limiting alcohol to just 2 drinks per week

Canada Moves to Decriminalize Possession of 'Hard' Drugs

Decriminalization is in BC.  Oregon decriminalized all illicit drugs a couple years ago.  Everything is peachy.

The key to resolving the cognitive difference is to realize the "recommend" and "require" are not the same thing.

[Todd]

The key to resolving the cognitive difference is to realize the "recommend" and "require" are not the same thing.

Yes, I know what words mean.

[Spotted Horses]

Yes, I know what words mean.

You seem to think you are the only one.

[Todd]

You seem to think you are the only one.

No, not at all.  I just find it quite delightful that a contemporary government embraces neo-prohibition sensibilities tied to outright nanny state "thinking" as it pertains to alcohol, while simultaneously loosening restrictions on all other controlled substances.  BC officials needn't look too far south to see how not to do it.  I'll leave it to you to look up empirical data regarding outcomes in Oregon if you so choose.  And yes, I am aware of the fatalities and health related issues tied to alcohol consumption relative to controlled substances, etc, etc. 

[Karl Henning]

A breakfast place called 'Woke' opened in Connecticut. Controversy soon followed.