Congresswoman Rashida Tlaib of Michigan has a big idea, almost Trumplike with a T.
Her proposal to save us from the Coronavirus and economic collapse involves giving every American $2,000 in a pre-loaded debit card, to be followed by additional $1,000 monthly recharges until the economy recovers (aka in perpetuity). This is simply a version of universal basic income schemes already proposed by many, and hardly noteworthy coming from a left-progressive.
But her legislation has a big twist when it comes to funding it: trillion dollar coins!
This is an old Paul Krugman idea from a few years back, and it effectively mimics the arguments of modern monetary theory supporters and old-fashioned Greenbackers: because the US federal government is sovereign, it can print (directly or indirectly) infinite amounts of money to pay its bills. Bankruptcy or insolvency is not an issue, and hey, why would anyone not want US dollars?
In fact, why not mint twenty four $1 trillion coins and pay off the entire US Treasury debt today?
Notice the allure of the almost mystical platinum coins, presumably housed in a super cool safe somewhere at the Treasury Department or US Mint. We could even go visit them, like the Constitution! Even Krugman and Tlaib on some level understand the appeal of “real” coins, in tangible physical form—and why the exact same scheme in purely digital execution would be a tougher sell politically. People still think of money in physical terms.
What will it take to get through to these knuckleheads that more money and credit does not mean more goods and services in the economy? That production precedes consumption? That incentives matter? Magical thinking will be the death of us.
