Ron Paul: Krugman’s Trillion Dollar Coin is NOT Real Wealth




by Ron Paul

Last week President Obama bluntly warned Congress that he will not negotiate when it comes to raising the statutory debt limit.  If Republicans attempt to use a debt ceiling vote to win concessions on spending from the White House, Mr. Obama threatens simply to raise the limit by executive order or other unilateral action.

This is business as usual in Washington.  Democrats literally do not believe we have a deficit and debt problem, and reliably propose greater borrowing and spending.  Republicans talk a good game when it comes to government debt, but have no credibility to argue against deficits or abuses of executive power.  Brinksmanship ensues, and ugly compromises are reached at the 11th hour.  We all lose as the endless borrowing and money printing further erode our dollar and our economy.

Keep in mind that the federal government relentlessly spends about $100 billion more each month than it collects in taxes. This means roughly 40% of every dollar Washington spends is borrowed, to be “paid back” only in highly devalued, newly created money. Ultimately this can only lead to the destruction of the US dollar, as history plainly teaches.  But in the face of this reality Obama just shrugs, turning to demagoguery and talk of little old ladies’ Social Security checks . Like Obama, far too many Americans view federal debt as a nonissue.  Consider Paul Krugman, America’s most reliable Keynesian economist and a beloved figure among mainstream journalists.  He recently wrote an article about the debt limit issue, in which he discussed a controversial proposal to have the federal government simply create a platinum coin with a face value of $1 trillion:

“Here’s how it would work: The Treasury would mint a platinum coin with a face value of $1 trillion (or many coins with smaller values; it doesn’t really matter). This coin would immediately be deposited at the Federal Reserve, which would credit the sum to the government’s account. And the government could then write checks against that account, continuing normal operations without issuing new debt.”

To be fair, Mr. Krugman acknowledges that minting such a coin would be an accounting “trick,” but he is dead serious about this option for the Obama administration.  This then is the state of modern economics discourse in America, where a respected New York Times economist literally can propose creating “money for nothing” and have the idea taken seriously.

Krugman’s suggestion is just another variant of the endless stimulus proposals, which purport to create greater aggregate demand in the economy by creating more money.  Whether this is done by the Fed or the Treasury is of little importance, as long as government is creating demand-side “growth,” however artificial.

But in just a few short sentences Professor Hans-Hermann Hoppe eviscerates the Krugmans of the world by pointing out the obvious: If governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth?  Why haven’t successive rounds of quantitative easing by the US Fed solved our economic recession?  And if Fed money creation really works, and doesn’t create inflation, why haven’t Americans gotten richer as the money supply has grown?

The truth is obvious to everyone.  Fiat currency is not wealth, and the creation of more fiat dollars does not mean that more rice, steel, soybeans, Ipads, or Honda Accords suddenly come into existence.  The creation of new fiat currency simply strengthens a fantasy balance sheet, either by adding to cash reserves or servicing debt.  But this balance sheet wealth is an illusion, just as the notion we can continue to raise the debt limit and borrow money forever is an illusion.



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253 Comments:

  1. Jew, Federal Reserve & Treasury Department -

    1. Obama next treasury secretary, Jack Lew - Jew

    2. Obama treasury secretary, Tim Geithner - Jew

    3. Bush treasury secretary, Hank Paulson - Jew

    4. Bill Clinton treasury secretary, Robert Rubin - Jew

    5. Federal Reserve chairman, Ben Bernanke - Jew

    6. Federal Reserve ex chairman, Alan Greenspan - Jew

    7. Federal Reserve deputy chairman, Janet Yellen - Jew

    8. Federal Reserve ex deputy chairman, Donald Cohn - Jew

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  2. Jew, Federal Reserve & Treasury Department -

    1. Obama next treasury secretary, Jack Lew - Jew

    2. Obama treasury secretary, Tim Geithner - Jew

    3. Bush treasury secretary, Hank Paulson - Jew

    4. Bill Clinton treasury secretary, Robert Rubin - Jew

    5. Federal Reserve chairman, Ben Bernanke - Jew

    6. Federal Reserve ex chairman, Alan Greenspan - Jew

    7. Federal Reserve deputy chairman, Janet Yellen - Jew

    8. Federal Reserve ex deputy chairman, Donald Cohn - Jew

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  3. French Canadian,
    I listened to the Corsi interview and I agree with him, but a few things bother me that he did not say. First, the CIA and our state department has been running drugs for Black Op operations and to create chaos in inner cities, etc(PSYOP) for years. This is nothing new. They are just much more open about it and that is what he needed to say. They don't care if people suspect because they believe people don't care if they become slaves. Secondly, he mentioned nothing about 9/11-briefly about the Patriot Act, which bothered me and used the Warren Commission as an example and not the 9/11 Commission. He never mentioned anything about conservatives who are part of this agenda, only liberals. I get very suspicious when people speak in these terms, and why I don't like when Alex does this. I think he needs to wake "conservatives" up who don't realize they are in on this as well. I just had a conversation with someone who posts information with captions like those idiotic liberals, etc. or Americans who Hate the Tea Party on the opposite side of the spectrum. I told my friend just stick to the facts and avoid those "conservative "liberal" sites that are derisive. I also can tell you that many people think we live in a global economy so people like China, Russia, etc. who are buying up land and companies is part of the new economic direction and they embrace it. There's a site I post=Democrats against Agenda 21 to help some of my friends realize this isn't some right wing conspiracy theory. It's time again to have a conversation with our local sheriff.

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    • Robin,

      Thanks for the feedback.

      It shows that you do not listen to Alex's daily Show. Alex never does that. He blast both republicans and democrats. He bashes also the Tea Party who was hyjacked by the neocons.

      As far as Corsi is concern, he comes a long way. He used to bash Alex about 9/11. Corsi thought at one time that Alex was a complete nut case saying thay 9/11 was an inside job...lol. So I think Corsi is now fully waking up. That's a good sign.

      Today, the Sunday edition of the show was fantastic. No friends of yours who would have listenned, could have denied the facts that Alex brought out. Like Alex said:" Sometimes when I listen to Mainstream Media, I realize that some of them are starting to talk about things I've told them 18 years ago... if only they would have investigated then, we wouldn't be in such a mess.

      I also gave you a "Reply" on your last post below.

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  4. Robin,

    You don't want to miss this:

    Special Report: Why People Think Sandy Hook is A Hoax
    http://www.infowars.com/why-people-think-sandy-hook-is-a-hoax/

    "Alex Jones now goes on the record with his thoughts and analysis. He highlights some red flags, shows the CNN track record of faking news reports and working with Military Intelligence"

    "The general public is becoming more distrusting of media, institutions, government. So it should not come as a surprise that citizen journalists around the world are analyzing the official Sandy Hook story to see if it can stand on it’s own. Many are finding that the story has many holes, some tell tale signs we have seen before, lack of security footage, change in weapons, sequestering media."

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    • Hello. I watched this and was aware of everything except the Hollywood set scud missiles, but I know that also did this with Syrian Danny=a phony journalist who was also making things up about Syria. Unfortunately, we know that all mainstream media has an agenda to push and are fabricating stories or blacking them out altogether. As far as this story, the majority of people want to believe it was just a simple mix up that happens during a crisis. They simply don't want to look into it for fear they may be labeled one of those crazy "conspiracy theorists".Remember when I told you a relative called me a conspiracy terrorist. So you have people out there who will turn on anyone who steps out of the group mind. Again, it won't be long before those same people will come back and ask themselves why they weren't willing to investigate to find out for themselves. I also tell people the same thing=don't take my word for it, find out for yourselves. Use your own critical thinking skills. I'm still not convinced anyone was shot, but time will tell as people look into this.

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    • Robin,

      "They simply don’t want to look into it for fear they may be labeled one of those crazy “conspiracy theorists”."

      LOL. I know. This is why I often say that Americans are snobs. They don't want to be associated with primitive passionated hillbillies like Alex Jones. Hey, he doesn't wear a tie and a suit... he gets mad, speak ordinary language... he must be a nut...lol

      Like if questionning things makes you a "conspiracy theorist". Like if getting mad make you a mental case. I mean with all the lies they give you, not questioning and not getting mad, THAT is the insanity.

      So you're still not convinced anyone was shot? No, I think they were shot. Hey, there is nothing these scumbags like better than killing children, do you really think they would have let this great opportunity go by?

      I read in a comment somewhere, that the Obama Phone Lady is tuning all of her friends to the Alex Jones Show. Who would have believed a few months back, that this women would be one day awakening people. This is great... all is not lost.

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  5. obama want ww3, its no illusion, sheep may wake up, when a radiation blast comes over their picket fence or an emp knocks their t.v out

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  6. obama want ww3, its no illusion, sheep may wake up, when a radiation blast comes over their picket fence or an emp knocks their t.v out

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  7. obama want ww3, its no illusion, sheep may wake up, when a radiation blast comes over their picket fence or an emp knocks their t.v out

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  8. Anonymous Hacks US Sentencing Website in Retaliation for Aaron Swartz’ Death (+ Video)
    http://www.infowars.com/anonymous-hacks-us-sentencing-website-in-retaliation-for-aaron-swartz-death/

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  9. THE REAL ISSUE IS THIS:Who shall have the power to issue a nation's currency-private banks or government entities? PLEASE SEE www.understandingmoney101.com

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  10. if printing more fiat currency would solve a nation's debt problems, zimbabwe would be the world's richest country and the weimar republic would be still going strong.

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  11. It's too bad Ron Paul isn't President. We'll continue to be jokes around communities here and internationally.

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  12. Robin,

    Forget about the deal the Zionists did with the Nazis en 1933. There is one much more important deal going on today. Obama made a deal with China, to let them grab your land and run it in exchange for the debts they own them. This is why China wants you disarmed. Today Jerome Corzi gave an incredible interview on Alex jones. I would like you to forward this interview to Ben Swann and get his take on that. And let me know what he thinks of it. I think Jerome Corsi hit the nail on this and we finally know the endgame.

    MUST LISTEN to this interview:

    Obama's Soviet Style Plan to Destroy America Revealed
    https://www.youtube.com/watch?v=M09HKwSFffE&list=UUvsye7V9psc-APX6wV1twLg&index=1

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  13. French Canadian,
    I'm afraid for my educator friends this interview would not change their minds. I've come to believe that many of the people I know don't mind being slaves. One teacher friend told me she doesn't mind paying more tax if it will help those less fortunate. There are just too many people on both sides of the spectrum that would prefer to not know the truth. Rand Paul is at it again and a friend of mine who is Muslim and is a Ron Paul supporter was just disgusted. My husbands reaction was he's better than most of the people out there and maybe he's using this strategy to get elected. His reaction really surprised me. It just makes me sick. I have a book for you to read which I just finished. It's called the Transfer Agreement by Edwin Black. I can see why the Jewish community and Black's parents(who were Jewish) did not like what is in this book, and it almost cost him his publishing career. He later had to recant what he wrote. I also read the Thirteenth Tribe by Arthur Kessler. Another good book.

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  14. INFOWARS LAUNCHES OPERATION PAUL REVERE
    http://www.infowars.com/infowars-launches-operation-paul-revere/

    See contest rules in this article:

    Three (3) Cash Prizes will be awarded:

    Grand Prize – $100,000 cash
    Second Place – $10,000 cash
    Third Place – $5,000 cash

    "The InfoWars alternative media operation is throwing everything we’ve got against the globalists because things are moving so quickly and free humanity has a real shot at turning the tide if we simply stand against evil. Everyone who enters this contest is a winner. By taking action your film will, at a bare minimum, reach thousands and potentially millions of people unaware of the matrix-like control grid being built around us. This is a win-win: wake up the masses while having a chance to win $115,000 in cash prizes. You are the militia in the InfoWar."

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  15. On the fake "fiscal cliff", fake "debt ceiling" and the entire state of fake USA economy

    slashdot . org/journal/303677/the-fake-fiscal-cliff-the-fake-debt-ceiling-and-the-fake-ss

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  16. Robin,

    I gave you a "Reply" on your last post below.

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  17. ASK DENNIS KUCINICH about monetary reform at www.monetary.org

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  18. If a parallel currency using commodities were begun and incrementally installed in place of the Fed's counterfeit fiat scheme, there would be a future for the American economy. Gloom and doom, however true, will never bring about a political solution to this problem. A mix of commodities such as was used in colonial north carolina would be an answer, along with such technologically produced fuels as butanol, thorium nuclear (molten salt reactors) methane from biomass (Landfills and farms), hydrogen from algae.

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  19. Hello French Canadian, That's why some of us are having discussions with our sheriff now because we see what is coming. It makes perfect sense and many progressive liberals I've talked to who can't step outside of the mainstream tell me it's a global economy so what do you expect. We anticipate a civil/race war and believe that was part of the Fast and Furious Plan to arm inner city gangs around the country and an excuse to have open borders. I've found that you can not reach people who believe in gun control because they don't want to see what is coming. We have come to the conclusion there are many people who are willing to relinquish their freedoms for the illusion of safety and are all too willing to be slaves. I suspect that will change when martial law is enacted. A friend is very concerned about UN Agenda 21 in our community. It's also interesting that the Chinese people are preparing for a war of some kind. People I know still see Obama as some kind of visionary and a man of the people. They just don't want to see reality because it's just too painful. They are purposefully trying to divide us in this country and use the gun issue to do it. We are doing what we can to prepare in our family-all our relatives.

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    • Robin,

      I understand what you are saying. And you are right. But all hope isn't gone. If the "Obama Phone Lady" who came on the Alex Jones Show recently, left with a complete new perspective on things... all is not lost.

      You've got to watch this interview... I would call it: How to turn an Obot into a Libertarian in one night... lol. Here it is:

      It starts at 0:22.59 and is commercial free:

      Infowars Nightly News Complete (Commercial Free) Monday January 14th 2013 - Obama Phone lady
      https://www.youtube.com/watch?v=ZrMWCXr41ms

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  20. Robin,

    PLEASE do not miss this incredible powerfull interview done yesterday and let me know later if youwatched it.

    Shocking Interview Obama Does Not Want You to See
    https://www.youtube.com/watch?v=76h7bKc_-YI&list=UUvsye7V9psc-APX6wV1twLg&index=7

    "2009 Nobel Peace Prize nominee Jim Garrow shockingly claims he was told by a top military veteran that the Obama administration's "litmus test" for new military leaders is whether or not they will obey an order to fire on U.S. citizens."

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