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Rohan Grey Profile picture
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Dec 21 • 9 tweets • 3 min read
Almost that time again....

nytimes.com/2022/12/09/us/…
I respect @jeannasmialek's reporting but this is just incorrect.

"Failure to raise the statutory cap on the nation’s borrowing power...would lead to a first-ever default, creating financial chaos in the United States and the global economy"
It's possible that a default would occur in that situation, but it would be b/c Tsy Secretary Yellen refused to use other options available at that moment to prevent default. Whether she has the legal authority to refuse in that moment is...questionable

rohangrey.net/files/coinage.…
How the public understands this upcoming political showdown will depend in large part on how it is reported by the media. I sincerely hope they do not repeat the same mistakes as the last few debt ceiling shutdowns and treat Dems refusal to #MintTheCoin as an inevitability.
Yes, this is a stupid problem and it only exists because the Republicans are being cynical. But the Dems are also being cynical in refusing to use the tools available at their disposal to neutralize the problem because they dont want to look 'unserious' or risk legal challenge.
Those reasons are emphatically *not* the same as saying 'we have no options to avoid default'. They do. They just would prefer to create a 'There Is No Alternative' dynamic so any political fallout is exclusively the fault of Repubs. Understandable politically but not honest.
So you have a situation where the Republicans are pointing a gun to the US economy's head and the Dems are saying "sorry, economy, if they shoot you, it's their fault, there's nothing we could do", when in fact they have a red button they could use but dont want to bc reasons.
That is the reality of the dynamic and how the media should be presenting it to the public. The Republicans are willing to let the economy burn, and Dems are willing to let them. A pox on both right-wing nihilism and centrist Dem 'serious economics', both of which got us here.
If you want to understand the "real" debt ceiling clash, it's not b/w Ds & Rs, it's b/w moderate Dems who want to preserve the 'Noble Lie' about money and progressives who dont. The former are keeping all of us trapped in this hell dance with Rs. Shame

nytimes.com/2021/10/06/opi…

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More from @rohangrey

Rohan Grey Profile picture
Dec 20
@TyKeynes This is why the trillion dollar coin is so important, both symbolically and legally. The need for a +ve balance interday (but not intraday) is indeed a relevant legal constraint. But, at least in the US context (and thus conceptually, if not practically in every case), the TGA
@TyKeynes can be refilled through a range of mechanisms, only one of which is issuing bonds. Greenbacks can also be issued, albeit up to their own instrument-specific "ceiling" which happens to be orders of magnitude lower than the ceiling on Tsys (but otherwise legally identical).
@TyKeynes And coins have their own restrictions, but they are primarily qualitative not quantitative (you can issue as many quarters as you want, provided they are worth 25c each etc). But the platinum Coin stands as the one example lacking both qualitative and quantitative restrictions
Read 8 tweets
Rohan Grey Profile picture
Dec 14
Making payments anonymously is not inherently criminal. Too many progressives, in their zealousness against truly bad actors, are letting the surveillance state into their minds and their politics.

It's really bad. Private greed and bureaucratic surveillance are twin enemies.
The problem with crypto is not that it cares about anonymity. It's that it doesn't. It cares about saying it cares about anonymity while getting rich and offering a form of digital payment that will never work as a proper substitute for cash because it's not good money.
You don't need to pathologize the idea of cash itself to go after scammers offering a shitty, knock off, fundamentally flawed product as part of a get rich scheme. Just offer a good version of the real product and make the distinction crystal clear.
Read 6 tweets
Rohan Grey Profile picture
Dec 11
No, they should punish crypto for the sins of crypto, of which FTX is one.
There is a thing called the crypto industry. It has structures, players, culture, dynamics, etc. It is structurally designed to encourage and care about some things and not others. That system resulted in FTX being the second largest platform in the ecosystem and SBF's rise.
When an industry exhibits a pattern of producing disproportionate and high profile frauds among the leading institutions and leaders of that industry, that industry has a problem. Saying the symptom has nothing to do with the illness isnt about fairness it's just deflection.
Read 4 tweets
Rohan Grey Profile picture
Jul 17
As a teacher, you assign readings, have formalized assessments, and dozens of students go through the same learning process.

A bunch of orthodox economists with a vested interest in defending their own framework claiming they don't understand is not a classroom it's a cabal.
It's tiring when Krugman, Summers, Furman, Wolfers, etc deliberately refuse to cite any texts, repeat the same mistakes over and over even after leading MMT economists correct them, and blame others for their failures.

I learned MMT via blogs and managed not to misunderstand.
So did many many many others, which is why MMT is so famous now despite the dismissiveness of the saltwater and freshwater leaders of the profession.

Including, incidentally, other famous heterodox econs like Jamie Galbraith, who the Summers of the world point to as "serious"
Read 5 tweets
Rohan Grey Profile picture
May 13
There have been a lot of #notallstablecoin takes flying around from crypto advocates in the last few days. It's worth reiterating a few points from the last time we were going around on this topic.

First, while there are obviously differences between models of stablecoins, and
Specific stablecoins - whether there's a single central issuer, whether it's backed by collateral, what kind of collateral, whether it relies on an algorithmic or actively managed stabilization approach, etc - these differences are all focused on the "backing" side of things.
When it comes to the obligation or liability side, all of these coins are essentially promising the same thing - a fixed or stable nominal price and redemption into a higher form of money/liquidity on demand. Some bury disclaimers in fine print or even quite explicitly say they
Read 12 tweets
Rohan Grey Profile picture
Apr 25
This is simply not true. It simply codifies a particular kind of human error (presumption that inelastic currency is pro-social) and chooses not to subject that error to the same degree of political/social scrutiny as governments.
If you start from the political belief that Austrian econ/hard money/sound finance is optimal, then sure, all you're doing is locking in that one political decision and *then* letting people do their thing on top. But that's a big "if"! One I would say the history of democracy is
pretty informative about. But this blindspot toward the implicit collective political value-judgments required for the rest of "market" forces to work as alleged has always been a blindpost of libertarian econ-inspired types.

neweconomicperspectives.org/2013/07/an-mmt…
Read 5 tweets

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