Monday, January 7, 2013

Magic Mind Tricks (Platinum Coin Economist Edition)

Paul Krugman has endorsed the idea of printing a platinum coin with  a notional value of one trillion dollars. Now, we have other economists following in his magic mind steps.

Mark Thoma writes:
So perhaps it's okay to match ridiculous tactics with ridiculous responses. Mint the coin, but make absolutely sure the public knows that it is only being done because the other side refuses to play fair, refuses to play by the explicit and implicit rules of political engagement. That's key to winning the battle for public.

Note how Thoma frames the debate. The other side refusing "to play fair," is the side, though limited in real backbone, that is at least posturing for less spending and a smaller government. If you are in favor of this, you are apparently not playing fair, according to Thoma. Nice way to frame the debate. If you are in favor of smaller government and lower taxes you are a crude beast. Oh yeah, let's start the debate with that baseline.


  1. If they want to mint a $1 trillion coin then they aught to do the decent thing and back it with real metal. Given the current price of platinum being around $1550/oz, that means a coin 20 tons in size. If they wanna make 20 ton coins then I say go for it, but I have a hunch that's not really what they're thinking, heh. Any $1 trillion coin with less than 20 tons of platinum in it is just another fiat gimmick.

    1. Sorry I was off by quite a bit, my bad... the figure above is for $10^9 (billion), not $10^12 (trillion). $1 trillion in platinum would be a **20,000 ton** coin. That's roughly 100x the amount of platinum produced worldwide in an average year.

  2. I would like to humbly suggest a more appropriate material for the new coin - cow shit. Now hear me out on this. The government has a long history of making coins with this theme. There's the buffalo head nickel and the gold buffalo, why not the buffalo chip trillion dollar coin?

    It could be stamped "E failibus unum" (United We Fail) and "In Crap We Trust". We would be able to say with unbridled confidence that our money "ain't worth shit", and in a pinch it could provide much needed warmth and a useful cooking fire. Ultimately, it would be worth considerably more than the bogus Fed fiat paper covered in green ink that has been forced upon us. And the good news - there is clearly no shortage of cow shit in Washington D. C.

    Just sayin'...

  3. The Simpsons already did it (but with a trillion-dollar bill). Keep it away from Castro (or his next of kin)!

  4. You mean Mark Thoma is still full of shit after all these years?

    I still remember his angry maunderings from the 2004 election season. (Of course back then, deficits were bad.)

  5. Krugman does the same sly framing trick.

    "First of all, we have the weird and destructive institution of the debt ceiling; this lets Congress approve tax and spending bills that imply a large budget deficit — tax and spending bills the president is legally required to implement — and then lets Congress refuse to grant the president authority to borrow, preventing him from carrying out his legal duties and provoking a possibly catastrophic default."

    Notice how he says "tax and spending bills the president is legally required to implement" and then jumps to "president authority to borrow". Borrow? But I thought Krugman said this was about taxing and spending? If the president can't afford to implement the spending without requisite revenue, then why did he sign the law? Why doesn't he reduce spending elsewhere to make up the shortfall? See, Krugman slyly creates two false dichotomies. 1. That borrowing more is president/government's legal duty and there is no alternative and 2. that it's borrow more OR ELSE.