I'd be happy to engage you on this, if you'd care to before I rip you to shreds over at The Market Ticker for your commentary which you posted without (1) facts, and (2) understanding what Bill's actual position IS.My response to Denninger was along the lines of I am really busy right now and headed out, maybe tomorrow.
Happy to engage, if you do it before I decide to publicly excoriate you.
Denninger couldn't wait and attacked me in a column late last night.
But before I get to the column, I want to make a point about what Denninger said in his email, when he wrote that I didn't have the facts and didn't understand Still's position.
My comments were based on Bill Still's press release announcing his bid for the Libertarian nomination! Indeed, I quote from the press release!!
Here's what was written in the release and the referenced video:
Pillar #1: End government borrowing. A sovereign nation does not have to borrow, in fact, being debt-free is the very definition of sovereignty. Pay off the existing bonds -- which is our National Debt -- as they come due, but pay them off with debt free U.S. Notes (or their electronic equivalents) instead of Federal Reserve Notes, which are all borrowed into existence.
Please see my short (3 min 54 sec) YouTube on this topic:
Sure looks and sounds like Still wants to print up money (or coins) to pay off the debt, and that is very inflationary, as I stated in my original post. As for coins versus paper currency (or paper money with red insignias) that is created by the government, it doesn't really matter. If there is more money out there (that is accepted by the public) it will be more money out there bidding up prices.
Bizarrely Still's economic adviser Denninger seems to understand the inflationary consequences and says so in his attack on me!! He writes:
So what if Congress just emitted raw currency, as it is entitled to do under The Constitution? Why then there would be immediate inflation, and the people would see the damage right up front. There would be no Ponzi to be blown, as the people would have the harm "in their face" and shortly would, I'd expect, vote those critters out of office. Heh, there goes the overspending!...
Denninger's plan seems different than Still's. Here's more from Denninger:
This, however, is a vision for the future -- in other words, it's an endpoint. For obvious reasons were we to simply pay off all the debt with issued money in one fell swoop the impact would be insanely disruptive. But we don't have to do that -- there's a better way.In other words, Denninger is calling for some shrinkage of government debt (which in part will occur via tax receipts) but he calls for the simultaneous printing of "US notes" based on an equation (economic expansion less productivity increase). Some of this newly printed money will be used to pay down debt and some for "general spending" by the government.
Instead, the intent is to run a budgetary surplus, ending new borrowing immediately. This will mean taking the hard decisions now while we still can instead of pretending we will never have to and that they won't be imposed on us if we refuse to act on our own. It is without question that doing so will lead to a short-term economic contraction, and as such repairing our trade, tax, immigration and energy policies along with fixing our medical system must occur at the same time to both blunt the blow where we can and position our nation for the future.
The debt will, in short, be paid down over time from tax receipts. Until it is, Treasury will have the authority to roll over existing debt, but not issue new debt. In other words, the budget will run an actual surplus. To the extent the economy begins to grow once the base adjustment has been taken Treasury can (and will, under Congressional direction) use the privilege of seigniorage to issue currency (as US Notes) in the amount of the economic expansion less the productivity increase, if any. Some of this will be used to retire more debt while the rest will be used for general spending (above tax revenues), as directed by Congress exactly as the founders intended and authorized in The Constitution. Over time US Notes will replace Federal Reserve Notes in circulation and they will remain fungible through the transition.
Bottom line: There is nothing libertarian about the proposals of Still or Denninger. The government should be out of the money printing business, number one. Number two, what exactly is this expansion of "government spending" above tax receipts all about. Libertarianism is about cutting taxes to the bone. Further, what is this obsession with paying off the debt?
The debt was money borrowed by the government to fund banksters, the military-industrial complex and to buy the votes of the welfare block. This has nothing to do with the rest of us. The government should simply file bankruptcy and stiff those who funded the government extravaganza, if the assets held by the government after liquidation aren't enough to pay off the debt .
I don't follow the LP very closely, so I have no idea how much of a following Denninger and Still have in the Party, one would think not much, so I am not going to do much more commenting on their proposals. It is generally a waste of time. They speak in generalities, like "taxes" and don't mention whether they are discussing increases or decreases in taxes. It's sufficient to say that their programs are very unclear and where some detail is clear, such as on money printing, it is scary as hell.
If the LP embraces these two characters to any degree, it would be a deterioration of the LP beyond recognition.