🚨New Paper🚨 (hi law reviews!)

‘Digitizing the Fisc’ is the first article to address the current separation of fiscal powers crisis, exemplified by Trump's takeover of the Treasury's payments IT systems, through a multidimensional legal, political economic, & technological lens
It contextualizes the current DOGE-led incursion within a broader history of inter- and intra-branch conflict between Congress, the President, the rest of the executive branch, and the Judiciary over the limits and boundaries of legislative and executive fiscal power.

Gonna say this once, and say it very slowly.

The Obama and Biden administrations made a huge mistake by validating the idea that the debt ceiling, if not raised/suspended, could require the Treasury to default on federal spending commitments.

It put the executive branch in the position to decide when spending was and wasn't feasible, and to selectively ignore Congress based on those directives.

We are now seeing the endpoint of that view - politicization of tsy payments infra, expanded impoundment powers justified on basis of funding availability

The most "serious" scholarly response to my coinage paper arg was that "sure, money is created out of nothing, but we can't **tell people that**".

I said that was elitist, and those with that view took offense and defended it by saying...this.

verdict.justia.com/2021/10/13/mon…
There wasn't much to say in response after that, it was a real "if the shoe fits" situation. But it certainly hits differently after the election.

Either you respect the electorate enough to be honest with them or you don't.

Enough lies. They aren't noble, they're just lies.

Here's how to #mintthecoin

1) Biden announces a new "emergency budget stability and national security seigniorage fund" at Tsy, and declares that every day between now and June 1 Yellen will deposit another $10bn platinum coin into the fund until R's pass clean ceiling increase 2) Then, on June 1, Biden/Yellen will begin depositing $100bn coins in the fund.

Crucially tho, Biden announces he has no intention of using the fund if the debt ceiling is increased cleanly - if that happens, he will instead recall the coins and shut down the fund

One of the most frustrating things about the debt ceiling/mainstream #MintTheCoin discourse is the complete erasure of non-tax, non-debt-issuance mechanisms for refilling the TGA that exist and occur *today*. The Mint returns hundreds of millions in seigniorage annually. The Fed returns tens of billions.

These are not "taxes or borrowing" yet the media acts as if the platinum coin would be the first time any revenue has ever entered the TGA outside of bond sales/taxes

[Very Serious Dems, in Charlie Kelly Voice]: "can we talk to you about the debt ceiling? We've been dying to talk to you about the debt ceiling all day." "So we have 3 ways of dealing with the ceiling.

The first is the plain meaning of legislation. We just basically ignore that. We figure, if Congress thought it was important for us to use existing law to avoid default, they'd have given us the legal authority to do so."

This is not the right way to do this, imo.

There are still options that Biden hasn't used (Ie the platinum coin) which means the ostensible tension between the debt ceiling and spending commitments doesn't actually exist yet.

14A should be invoked *after* coin is attempted.

https://twitter.com/thehill/status/1655645276231573505

I'd also have just issued the bonds and waited for others to sue rather than preemptively suing. Permission vs forgiveness, and all that.

But important to note: if the Court rejects this arg, then the coin remains a viable alternative since it's a legal way to finance spending.

Extremely excited to see this piece on "Paths Toward an Acceptable Public Digital Currency" by Jay Stanley at the @ACLU:

aclu.org/paths-toward-a… Some key highlights/personal favs:

1) Acknowledging from the outset that while a public digital dollar and CBDC are often conflated, the former could also be issued by the Treasury Department

(For more on this, see my Congressional testimony here: rohangrey.net/files/testimon…).

CONFERENCE ANNOUNCEMENT

Our Money, Our Future: Promoting Economic Democracy in Oregon Through Public Banking

A 3-day, public, hybrid conference spanning law, economics, and politics/organizing, held at @willamette_u, March 23-25.

ourmoneyourfuture.org Hosts: @WillametteLaw, @WillametteMBA & WU Econ Dept

Cosponsors: @WillametteLRev, @ORpublicbank, @LPE_Project, @themmtnetwork, @thepublicmoney.

Ft. @StephanieKelton, @NathanTankus, @Kiffmeister, @sonjadav, @ecuarauz, @RaulACarrillo, @tymoignee, @J_LaRosa415, @sydiot,

@nescio13 @NathanTankus @LevMenand @jvtklooster Thanks for this. My initial impressions:

1) Diehl is, I think, far more sanguine about the potential scope of the 5112(k) than Castle, who put his name on it and liked the goal (increasing seigniorage revenue and reducing the need to tax/borrow), but did not necessarily care @nescio13 @NathanTankus @LevMenand @jvtklooster what the unanticipated consequences of the law are. In this respect, I think Diehl’s interpretation is not only on far stronger footing, but consistent with the plain meaning in a way trying to limit the law to commemorative only is not (and as Diehl notes, would be inconsistent

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"

@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).

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.

No, they should punish crypto for the sins of crypto, of which FTX is one.

https://twitter.com/jenniferjschulp/status/1601332096253169664

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.

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.

https://twitter.com/JustinWolfers/status/1548756156583219200

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.

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.

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.

https://twitter.com/TheWhyOfFI/status/1518584223342284800

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

I enjoyed the opportunity to chat with @StephanieKelton about this Jon Stewart-Tom Hoenig exchange, which is very illuminating.

stephaniekelton.substack.com/p/jon-stewart-…

But equally cool was seeing Jon Stewart do a 180 on his previous skepticism of #MintTheCoin. Back in ~'13, Stewart was very dismissive of the trillion dollar coin, as seen in this back-and-forth w Paul Krugman.

businessinsider.com/jon-stewart-vs…

I'm not a fan of Krugman nor do I have much intrinsic respect for the economics "Nobel Prize", but it was notable in these interactions

The Fed's report on CBDCs is out, & predictably, on the most important issue of all - protecting/maintaining cash-like privacy - there is no analysis, just assertion, that anonymity is non-viable b/c greater scale/velocity of digital. Very disappointing.

federalreserve.gov/publications/f… I've made this point before, but it's important to emphasize: the Fed is not statutorily responsible for issuing cash, nor does its mandate or expertise extend to issues of preserving civil liberties or balancing security/privacy concerns. Its opinions/preferences are not gospel.

@conorsen Plenty of MMTers, including myself, have proposed a) voluntary/mandatory savings programs, b) auto-fiscal stabilizers, c) direct credit regulation (as an alternative form of monetary policy to interest rate hikes). Why are those not sufficient? Believing inflationary risk is real @conorsen does not require believing traditional approaches to managing inflation risk are good/appropriate.

This piece has four major errors.

1. Prates claims Fed only purchases Tsy securities. But that’s incorrect. The Fed buys both notes & coins from Tsy today, and then sells them onto commercial banks and others, who sell excess coins back to the Fed.

newyorkfed.org/aboutthefed/fe…

https://twitter.com/MarceloMPrates/status/1445126494402011142

2. The Fed is also legally the Tsy’s fiscal agent, and is required to accept monies deposited by the Tsy. There’s no indication that excludes coins and the law is quite clear if Tsy and Fed disagree on scope of that authority, the law sides with Tsy Sec.

rohangrey.net/files/coinage.…