Sometime in the next 24 hours we will be switching European Tribune over to a new layout. This will involve a little downtime and no doubt some teething troubles. Do not adjust your set. - Colman

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So far the argument is that the Government cannot default on previous expenditure duly authorised by Congress. I think a lot of people - even on the left- would have a problem with Obama minting money to pay for expenses that haven't even been incurred yet.

But what would all the rich people who get interest for funding Govt. debt do if Obama simply paid them all off?

Where would they get their income from then?

What would they do with all the money they have accumulated? Heaven forbid that they should actually have to engage in entrepreneurial activity and invest in in productive assets.

Krugman and other economists talk a lot about the importance of managing inflation expectations. Expectations of inflation would skyrocket and general panic would ensue.

Hence my very specific proposal to fund a very specific and known past expenditure - on the Afghan and Iraqi wars. No one can deny it was a real and authorised (if unfunded) expenditure which has to be paid for.

Hence also my proposal that Obama propose a specific tax (Tobin, Carbon, Corporate) to pay for an ultimately buy back and smelt the coin.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot dotty communists) on Thu Jan 10th, 2013 at 05:27:00 PM EST
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