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.

  • ps:12

    Look, basically the new US healthcare law is not about health care and never was. It is about centralizing citizens into a microchip implant system. The power Elite are trying disparately to make a system that will be able to sustain there unsustainable system by the process of elimination. In other more proper terms, Genocide.

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    • ps:12

      See the irony, they cowardly show elite hiding behind their superficial monetary policy Moves they make over time that Ron Paul asked properly to be audited.

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  • http://www.youtube.com/profile?user=DarrickWagner Darrick Wagner

    I dream of the White House being turned into a museum of natural history for a form of government (democratic republicanism) that failed it’s own people. I see myself being flamed predominately by left-wingers with bleeding heart tendencies that democracy is the best form of government for the human race. Well my fellow Americans, you are not my brother and you are not my sister. I spit on the flag of the United States of America.

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  • robin

    French Canadian, Did the constitutional lawyer have anything important to share? I’m waiting to hear what is going on in terms of the impeachment process. What is going on today makes Watergate look like a cakewalk. People in this country and our congressional leaders are now bought off.

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  • robin

    Hi French Canadian. I know I saw the first interview you posted. Too late as he already did his interview this morning. I’m sure he’ll be asking the right questions. He usually does. I’m trying to share this with others to get them to start connecting the dots=those that want to be awake that is. Many do not. It will take tanks, gunfire, martial law to wake up many people who are too busy watching the latest issue of the Bachelor or playing Farmville, etc.

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  • jim

    We are destroying the entire natural world for profit and the making of money. We are also destroying the entire human civilization by reducing all life to a dollar amount. Life is leaving our planet, and will continue to leave. Look at the planet Mars. This is what we are doing to our gem of a planet earth. It will be devoid of life soon, sooner than we imagine. We will have chosen death over life, and we will have chosen death for money. Money and greed, and the addiction to power and control that emanates from the acquisition of money will destroy our own humanity, and all life. Letting go of money is the only way to save …. life itself. Time is running out.

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  • http://www.youtube.com/profile?user=Steviebob Stevie bob

    It is clear from Chuck Hagel’s confirmation hearing. Israel yields strong influence over our politicians. These Jewish groups and lobbies are working on a plan to get Americans to wage war with Iran & consequently, our soldiers will die for their Jewish state.

    Ron Paul’s foreign policy is not to wage war in the Middle East and he was defeated by these Jewish Lobby.

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  • French Canadian

    Robin.

    Alex already did 2 interviews with Jim Garrow, one last week and one yesterday. Here is the interview he did yesterday with him, you might want to foward it to Ben Swann:

    Obama Asks Top Brass: Will You Fire on American Citizens?
    http://www.youtube.com/watch?feature=player_embedded&v=j1aBTriGCZE

    “Alex welcomes Nobel Peace Prize nominee Dr. Jim Garrow to break down his information regarding the Army’s new “litmus test” for military leaders.”

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  • robin

    FROM BEN SWANN OF REALITY CHECK….
    Hey everyone… Many of you have heard of Dr. Jim Garrow. He is the man claiming that sources have told him that President Obama is using a litmus test to decide whether to cut high ranking military brass. That test, says Garrow, is whether or not they will fire on American citizens.

    Friday morning I will interview Dr. Garrow and I want YOU to be a part of it. Send me the questions you wanted answered about this story. My team will select some of those questions and I will make them part of the interview. You can also tweet me the questions @fox19benswann and use the #fulldisclosure

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  • robin

    French Canadian,
    A friend sent this to me and it articulates how we feel. We have always been anti-war no matter who is president. I am sharing this with my liberal friends who have gone back to sleep. They are outspoken about healthcare, Wallstreet, gun control, etc., but are completely silent about our wars and our loss of liberties. I think maybe I finally got through to one of my educator friends who finally is dealing with someone who was on the other side and the hypocrisy of liberals who are anti=war because Obama is president when they were so outspoken when Bush was president. This guy does a great job…http://www.corbettreport.com/calling-out-the-hypocritical-war-loving-left/

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  • French Canadian

    Robin,

    “If we had the money, we would be out of here and go to a remote island somewhere.”

    I’m afraid there will be no place left to go to if citizens can’t take back America.

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  • http://www.41worldusa.com 41 World USA Global Company

    Can anyone afford $1 Trillion Dollar Coins?, And It’s not a financially sound idea. The elite and richest Americans and/or World Citizens are the only likely potential buyers. Then: how to design, what metals to mint with, And how big are Trillion Dollar Coins?
    -41 World USA Global Company ”For One World and Future…Vision, Growth, Relationships, Service and Trust” Home: ”$100 Trillion USD Plan for America”
    At info@41worldusa.com , http://www.41worldusa.com , Fouroneworld Usaglobalcom, @www41WorldUSAco @www41WorldUSAcom

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  • http://www.youtube.com/profile?user=jessemaurais jesse maurais

    Responding to the title alone: NO ONE was claiming this. But its great to see Ron Paul and his clueless acolytes once again failing to see what’s going on.

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  • JJ

    http://www.dailyjobcuts.com

    enough said

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  • http://www.youtube.com/profile?user=TheFunkadelicFan TheFunkadelicFan

    This is sad. The ramblings of a senile old man.

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  • robin

    French Canadian,
    Actually, the naval base is old news, but new to me. It happened during the Clinton Administration and they were just leasing it for 10 years. Don’t know what has happened since, but plan to look into it. Of course, there’s the Panama Canal and another port in MA. The Chinese are not the only foreign nation, but I just never stopped to think about it until now. They also own oil fields here. The global take over of property in the US has been going on for a long time. The most alarming is that once again we are going to give the Chinese whatever they want in the US in exchange for lowering our debt. They also want free trade zones so they don’t have to pay a tariff tax.

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    • French Canadian

      Robin,

      YES, I know about all these things. It is very scary. Alex had many guests on his show recently talking about China taking american assets in exchange for the debts. Soon, China will be running your country.

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  • robin

    French Canadian, It is official international law supersedes our Constitution. We knew Obama would ask the UN if they can invade Syria, not our congress. It’s obvious that most Americans don’t understand what this means. Last year, we were looking into how they can close off our national forests and whether it is unconstitutional. We are environmentalists but are aware of UN Agenda 21 and how people like us are used as a tool to push this agenda. Al Gore was on the Today Show, and what a hypocrite that guy is, but we knew that he sold his soul to the devil-NWO in 2000. He gave in and was rewarded with a global warming platform/green energy, Nobel Peace price and a speaking and publishing career. I just couldn’t believe what he said. After looking into this national forest issue, we discovered that international law takes precedence over our constitution. We contacted a law professor who was suppose to be working on this, but it was obvious by his response that he was a neocon who supports the NWO. Thinks this is acceptable. I have a friend whose family farm has been in their family since the late 1800’s. FEMA is trying to require that they buy flood insurance and of course it is outrageously expensive and threatening if they don’t, to take their property from them. This is happening all over the country. Also, just read that the Obama administration is shutting down the air defense system by Texas, Mexico border..I guess to let in all those drug cartels, illegal aliens, terrorists, etc. to do their dirty work…I even read that China has just purchased one of our naval bases. Just unbelievable.

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    • French Canadian

      Robin,

      I don’t know what the Congress is waiting for to start impeachement. This thing of superseding your Constitution has gone much too far. It’s time to act now.
      “Tomorrow, Alex invites constitutional lawyer Bruce Fein to give his expert analysis on whether an Obama impeachment is feasible, and also to give his take on the gutting of our Second Amendment and Constitution”.

      As far as Al Gore is concern, I never like him from the first time I saw him. Samething with Obama. I can smell a rat from miles away.

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      • robin

        French Canadian,
        I will have to watch this program with the constitutional lawyer, but I’m afraid our congressional leaders have been bought off. We don’t have enough “real conservatives” who stand by their principles anymore, and those people I know who are progressive liberals are absolutely asleep and do not want to wake up. Look at McCain who so many people I know think is a true patriot. He’s part of the NWO agenda, but they listen to his rhetoric not how he votes. My liberal friends/family cling to Obamacare and use this as their justification that Obama is bringing us equality and is a visionary. Again, those psychologists on that 9/11 video I watched have nailed it. When marital law is declared, then they may wake up, maybe not. Again, some people love their servitude if they believe it serves the greater good. If we had the money, we would be out of here and go to a remote island somewhere. We’ll just have to work with our family to share our resources.

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  • French Canadian

    Ron Paul: U.S. Action in Mali is Another Undeclared War
    http://www.infowars.com/

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  • French Canadian

    LOL…

    Infowars.com Petition: We Demand Surveillance Technology in Congress and White House
    http://www.infowars.com/infowars-com-petition-we-demand-surveillance-technology-in-congress-and-white-house/

    —————

    Robin, I gave you a “Reply” on your last post.

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  • robin

    French Canadian, They are back at it again with Syria and Iran. With all our counter terrorism drills going on now, something big is going to happen soon. The stage is set, but most people I know don’t seem to care. If you seen the video they did on 9/11 this past September. What I thought was very important about it is what the psychologists had to say about why so many people don’t know how to respond to this contradictory information and this is true for all the other information that comes out that questions any official narrative. If you have not seen this video, it is well-done and what I share with my “educated” friends who need empirical evidence first. These professionals do an excellent job and explain that it is because they have an ethical responsibility to question what we have been told what happened that day. It is what woke us up and so many others, but I always start with the science piece and why the buildings could not have come down the way they claim=defies the laws of Physics. Also watched the Front Line special on the bank loan scandal that brought this country to it’s knees. Our criminal justice system is a farce and why the feds could not find enough evidence to indict any of the big shots. Now, I heard they are trying to make sure this gets off the internet anyway they can. Something big is going to happen soon. Our sheriff made a public statement, so at least we know where he stands. Don’t know if you heard the San Diego sheriff who thinks Obama is courageous and supports what he is doing. He said it will only take a year to confiscate all the guns. We know he’s been bought off.

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    • French Canadian

      Robin,

      Yes I know all about that. How could I miss something since I read every articles on infowars.com and listen to the daily show since a bit more than 5 years. This is why I am always so surprised that your friends are in such denial, because the callers on Alex’s show are so fully awake. I sometime wonder if your friends live in the same country as they do…lol

      Yes something big is bound to happen if people don’t wake up soon. Alex seems more confident every day that we can stop all of this, because the awakening has been so phenonomenal in the past months. His site is really exploding and the callers are almost all recent listeners who woke up in a jiffy by listening to his show following Alex’s interview with Piers Morgan. At this rythm, the whole country will be awake in no time.

      You see, Ben Swann and others are doing a very good job, but they are not passionate like Alex Jones. They reveal the truth with no emotion in their voices so people tend to think that it must not be so bad. Alex puts all his emotions in revealing these things and people feel that there is real danger going on here. THIS is what awakens them.

      Anyway, let’s hope for the best! What is happening in your country, will affect the whole word.

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  • French Canadian

    Hacked Emails Reveal ‘Washington-Approved’ Plan to Stage Chemical Weapons Attack in Syria
    http://www.infowars.com/hack-reveals-washington-approved-plan-to-stage-chemical-weapons-attack-in-syria/

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