Will Trillion-Dollar Coins Fix the Debt Crisis?
The Congressional spenders and the President are thieves. They pass laws to take our money in the form of a progressive income tax and redistribute it to people who don’t lift a finger to earn it. They print money to dilute the value of our investment accounts. They implement debt-ridden programs in order to buy votes.
The latest scheme to get around what’s left of the idea that there is such a thing as “sound fiscal policy” is a proposal to mint trillion-dollar coins. Should Congress fail to extend the U.S. debt limit for the umpteenth time, the president could ask the Treasury to begin minting trillion dollar coins.
Like so much our government does, it’s a form of monetary sleight of hand. Here’s what is being seriously proposed:
“While there are laws in place to regulate how much paper, gold, silver or copper currency can be circulated by the government, there is nothing so clearly stated when it comes to platinum. That door open, the Treasury could have the U.S. Mint, melt, and mold a few trillion dollars of it, then ship the goods over to the Federal Reserve for safekeeping until the time comes to pay the bills.”
That last line made me laugh: “until the time comes to pay the bills.”
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Why bother with this charade? Congress and the president could print the $16 trillion needed to eliminate the debt as well as the $222 trillion to pay for the projected unfunded liabilities that make up the politically protected Social Security and Medicare entitlement programs. There’s no one to stop them. The Federal Reserve has been creating money out of thin air for nearly a century. If it’s OK to debase our currency a little bit, certainly a much larger debasement will do wonders for our economy. Everybody wins. No more debt. No more unfounded mandates.
Where is the moral objection to be found? We gave up such pretenses of righteous indignation a long time ago. Why are we pretending that morality matters?
There was a time in America where most people believed there was a moral obligation to deal honestly with people in financial arrangements. “Sound money” was the operating phrase. Collateral was required for loans. Gold and silver were mandated for payment. Paper money was used to represent held reserves of gold and silver; it was never considered to be money.
Governments have manipulated money for millennia. Money is power. When governments control the money supply, they control you and me. As we see in every election, politicians buy votes with money. They get the money they need from taxes (progressive income tax), debt (kicking the can down the generational road), or inflation (stimulus spending). It’s not their money. They use the prosperity of workers as an ATM machine with a stolen PIN number.
The history of money manipulation can be seen by studying the coins we carry in our pockets. The way our coins were manufactured told us something about human nature: (1) humans are inherently corrupt and (2) steps need to be taken to limit human corruption.
Originally, gold coins had smooth edges; as a result, it wasn’t immediately noticeable if just a little gold was clipped from the edges using a sharp knife or a file. If this was done to several coins, the coin clipper would have enough raw gold to sell or trade while still holding onto his original coins. The same could be done with silver, although it’s a harder metal. This fraud describes inflation: adding fictional “value” to the money supply, thus diluting the value of the existing money. It’s like adding water to the soup while selling the diluted commodity at the original price. The customer is cheated.
To combat this fraud, the edges of coins were milled to have grooves cut into them. If you got a smooth-edged coin, you knew it had been clipped. Today, no one bothers with clipping government-issued coins since they are no longer made of gold and silver.
We’ve gotten long beyond coins and Federal Reserve Notes. We’re at the point of “Let it be written. . . Let it be done.” It’s a matter of adding zeroes to a spread sheet.
It’s not fraud since we elected these people to make us prosperous.