1 00:00:11,039 --> 00:00:14,880 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,920 --> 00:00:19,960 Speaker 1: I'm Joe Wisn't Thal And I'm Tracy Hallaway. So Tracy, 3 00:00:20,160 --> 00:00:25,119 Speaker 1: you know, like I'm a serious financial journalist. I'm a 4 00:00:25,160 --> 00:00:28,960 Speaker 1: serious journalist and one aspect of journalism that I think 5 00:00:29,080 --> 00:00:31,720 Speaker 1: is important. Why are you laughing? Sorry? I shouldn't laugh 6 00:00:32,240 --> 00:00:34,400 Speaker 1: I shouldn't. I'm sorry, I just know where this is 7 00:00:34,440 --> 00:00:39,760 Speaker 1: going go on. No, No, I just feel like one 8 00:00:39,960 --> 00:00:44,199 Speaker 1: important aspect of journalism is impartiality. Like you know, I 9 00:00:44,240 --> 00:00:47,560 Speaker 1: don't think we should like take views on many things. 10 00:00:47,680 --> 00:00:50,760 Speaker 1: We should be open minded, we should be intellectually honest, 11 00:00:50,960 --> 00:00:52,920 Speaker 1: but it is not really our job to take a 12 00:00:52,960 --> 00:00:55,880 Speaker 1: position on things, you know what I'm saying. Sorry, I 13 00:00:55,880 --> 00:01:00,000 Speaker 1: don't know why I can't stop laughing, Because impartiality is very, 14 00:01:00,080 --> 00:01:02,880 Speaker 1: very important. I think the difficulty comes when when you 15 00:01:03,440 --> 00:01:06,399 Speaker 1: I mean, in a lot of financial journalism, people have 16 00:01:06,480 --> 00:01:09,800 Speaker 1: strong opinions about one topic one way or the other, 17 00:01:09,959 --> 00:01:14,480 Speaker 1: and sometimes those opinions seem to be grounded in logic, 18 00:01:14,600 --> 00:01:16,840 Speaker 1: and so you get frustrated if other people don't see 19 00:01:16,920 --> 00:01:19,319 Speaker 1: the same logic. But yes, like we are not supposed 20 00:01:19,360 --> 00:01:21,680 Speaker 1: to take sides, We're supposed to lay out both sides 21 00:01:21,680 --> 00:01:26,320 Speaker 1: of the argument every time. So I I take this 22 00:01:26,440 --> 00:01:32,000 Speaker 1: responsibility as a serious Capital j journalist very seriously. But 23 00:01:32,040 --> 00:01:35,360 Speaker 1: I have to admit, if I'm being completely honest, if 24 00:01:35,360 --> 00:01:38,920 Speaker 1: I've been completely honest, there is one topic that I 25 00:01:38,959 --> 00:01:46,600 Speaker 1: find very hard to Um, let's say, avoid showing my bias. Um, yes, okay, 26 00:01:46,760 --> 00:01:50,680 Speaker 1: uh so we're talking about minting the trillion dollar coin, 27 00:01:51,040 --> 00:01:53,240 Speaker 1: of which you have been an advocate for a very 28 00:01:53,280 --> 00:01:56,720 Speaker 1: long time. First of all, I can't believe that we've 29 00:01:56,720 --> 00:01:59,440 Speaker 1: managed to do what is it like six years of 30 00:01:59,440 --> 00:02:02,280 Speaker 1: the Odd Lots podcast and we haven't yet done a 31 00:02:02,480 --> 00:02:06,640 Speaker 1: mint the Coin episode. Um, that's one thing. And then secondly, 32 00:02:07,600 --> 00:02:10,800 Speaker 1: I mean, this is the one thing that I remember 33 00:02:11,240 --> 00:02:14,400 Speaker 1: about your writing, or like the foremost thing about your 34 00:02:14,400 --> 00:02:17,320 Speaker 1: writing before we started working together at Bloomberg. It was 35 00:02:17,400 --> 00:02:21,120 Speaker 1: the big post you did at Business Insider. I think 36 00:02:21,160 --> 00:02:27,040 Speaker 1: it was way back in something like that about minting 37 00:02:27,080 --> 00:02:30,040 Speaker 1: the coin and the discussion people were having about it 38 00:02:30,120 --> 00:02:33,360 Speaker 1: at the time. And I remember reading that and thinking 39 00:02:34,320 --> 00:02:37,360 Speaker 1: this must be a joke. This is so weird. Um, 40 00:02:37,400 --> 00:02:39,040 Speaker 1: you know, I started thinking about whether or not we're 41 00:02:39,040 --> 00:02:42,600 Speaker 1: in a simulation again. And and now like fast forward 42 00:02:42,639 --> 00:02:47,120 Speaker 1: to one and there are actual politicians in Washington who 43 00:02:47,160 --> 00:02:50,600 Speaker 1: were talking about it. It's been a really incredible decade. 44 00:02:50,720 --> 00:02:54,240 Speaker 1: So yes, I am going to fully my bias. Actually 45 00:02:54,240 --> 00:02:56,720 Speaker 1: admitted it to one of our colleagues the other day. 46 00:02:57,160 --> 00:03:00,160 Speaker 1: I was like, you know, I'm a serious journalist, but 47 00:03:00,240 --> 00:03:02,200 Speaker 1: I have to admit that I really think the debt 48 00:03:02,240 --> 00:03:05,959 Speaker 1: sailing is a very absurd law and that a very 49 00:03:06,000 --> 00:03:09,360 Speaker 1: good solution is for the Treasury to mint a trillion 50 00:03:09,400 --> 00:03:12,080 Speaker 1: dollar platinum coin and just end as far as once 51 00:03:12,080 --> 00:03:14,600 Speaker 1: and for all. So yes, this is my bias. But 52 00:03:14,720 --> 00:03:16,400 Speaker 1: you know, people, it is weird, and I will be 53 00:03:16,440 --> 00:03:18,440 Speaker 1: the first to admit it's like a weird thing. Like 54 00:03:18,480 --> 00:03:21,120 Speaker 1: I'm not going to deny that it's strange that it 55 00:03:21,160 --> 00:03:23,440 Speaker 1: seems that it's a legal loophole, that it's a hack. 56 00:03:23,760 --> 00:03:27,320 Speaker 1: That people have lots of questions, both on the economics, 57 00:03:27,480 --> 00:03:31,640 Speaker 1: the legality and the sort of like the institutional aspects 58 00:03:31,639 --> 00:03:34,320 Speaker 1: of how this can be done and who is the 59 00:03:34,400 --> 00:03:37,120 Speaker 1: unilaterally authority to just create a train dollar the money. 60 00:03:37,320 --> 00:03:39,680 Speaker 1: I admit that there's a lot of questions and people 61 00:03:39,760 --> 00:03:43,440 Speaker 1: have reason to be skeptical. Nonetheless, I think it's a 62 00:03:43,440 --> 00:03:46,760 Speaker 1: good idea. Maybe you do too well, maybe you'll be convinced. 63 00:03:47,280 --> 00:03:50,720 Speaker 1: And I think though it is surprising that after all 64 00:03:50,760 --> 00:03:53,440 Speaker 1: these years of the Outlaws podcast, where finally for the 65 00:03:53,520 --> 00:03:56,880 Speaker 1: first time doing a coin episode, because, as you point out, 66 00:03:57,400 --> 00:03:59,880 Speaker 1: I've actually been writing about this topic for really a 67 00:04:00,000 --> 00:04:02,280 Speaker 1: most a decade. Yeah, so this is going to be 68 00:04:02,360 --> 00:04:04,280 Speaker 1: one of the episodes where I think I sit back 69 00:04:04,400 --> 00:04:08,040 Speaker 1: and learn a lot from both you and our guests, 70 00:04:08,120 --> 00:04:11,000 Speaker 1: and I think I'm probably going to be representative of 71 00:04:11,400 --> 00:04:15,280 Speaker 1: maybe the average person who encounters the idea. I kind 72 00:04:15,280 --> 00:04:21,080 Speaker 1: of get how the mechanics of it would work, but again, instinctively, 73 00:04:21,200 --> 00:04:25,120 Speaker 1: it just seems absolutely crazy to I guess, try to 74 00:04:25,200 --> 00:04:30,480 Speaker 1: fix the absurdity of American political theater with what basically 75 00:04:30,520 --> 00:04:33,600 Speaker 1: amounts to more absurdity. But I have a feeling we're 76 00:04:33,600 --> 00:04:35,880 Speaker 1: going to get into that there is some logic to that. 77 00:04:36,160 --> 00:04:38,320 Speaker 1: So yeah, I I hope you play an active role 78 00:04:38,320 --> 00:04:42,400 Speaker 1: in this conversation because we have to ask the tough questions. 79 00:04:42,640 --> 00:04:45,080 Speaker 1: Let's let's get started. So alright, let's without further ado, 80 00:04:45,160 --> 00:04:47,200 Speaker 1: we have the best guest, I think to discuss it. 81 00:04:47,200 --> 00:04:49,880 Speaker 1: We're gonna be speaking to Rowan Gray. He is an 82 00:04:49,920 --> 00:04:54,400 Speaker 1: assistant professor of law Lambit University. He is also a 83 00:04:54,440 --> 00:04:58,719 Speaker 1: longtime coin advocate, and he has in fact written what 84 00:04:58,800 --> 00:05:02,839 Speaker 1: I think is probably the definitive sort of law review 85 00:05:03,240 --> 00:05:07,600 Speaker 1: article on the legality of the coin. It is extremely thorough, 86 00:05:08,080 --> 00:05:11,320 Speaker 1: both in terms of talking through its economics, some of 87 00:05:11,320 --> 00:05:14,360 Speaker 1: the common objections to it, and why he believes it's 88 00:05:14,360 --> 00:05:19,160 Speaker 1: illegal and perhaps even mandatory route to circumvent the debt ceiling. 89 00:05:19,760 --> 00:05:23,080 Speaker 1: It is titled Administering Money, Coinage, Debt Crises in the 90 00:05:23,120 --> 00:05:29,200 Speaker 1: Future of Fiscal Policy, a very serious, thorough, rigorous legal work, 91 00:05:29,920 --> 00:05:32,440 Speaker 1: and in addition to advocating, he's also a bit of 92 00:05:32,480 --> 00:05:36,920 Speaker 1: a sort of policy entrepreneur, having worked with elected representatives 93 00:05:37,279 --> 00:05:40,960 Speaker 1: to introduce laws that would bring about the coin. So 94 00:05:41,080 --> 00:05:45,440 Speaker 1: he is a scholar and an activist and an entrepreneur 95 00:05:45,520 --> 00:05:48,880 Speaker 1: on the subject. So the best guest to discuss it Rowan. 96 00:05:49,120 --> 00:05:51,960 Speaker 1: Thank you so much for coming on, coming back on 97 00:05:52,000 --> 00:05:54,840 Speaker 1: all lots. Thank you so much for having me. It's 98 00:05:54,839 --> 00:05:58,960 Speaker 1: a pleasure to be here talking about a jointly favorite topic. Yeah, 99 00:05:59,160 --> 00:06:02,360 Speaker 1: so let's let's actually just start with like the really 100 00:06:02,400 --> 00:06:05,480 Speaker 1: big picture, because you know, there are still some people 101 00:06:06,000 --> 00:06:08,920 Speaker 1: who are, like I encounter on Twitter and so forth, 102 00:06:08,920 --> 00:06:11,560 Speaker 1: they're like, can you just point me, just like the 103 00:06:11,720 --> 00:06:15,400 Speaker 1: simple version, like, how does the coin work? Yeah, I 104 00:06:15,400 --> 00:06:17,760 Speaker 1: mean the starting point is that the coin works like 105 00:06:17,880 --> 00:06:20,960 Speaker 1: all coins work, which is that the Mint, which is 106 00:06:21,000 --> 00:06:24,479 Speaker 1: the oldest monetary institution in the United States, predating the 107 00:06:24,520 --> 00:06:28,080 Speaker 1: Federal Reserve by over a century, which is housed within 108 00:06:28,120 --> 00:06:32,480 Speaker 1: the Treasury, would mint a coin of a certain value 109 00:06:33,040 --> 00:06:37,560 Speaker 1: and would deposit that coin at the Federal Reserve uh, 110 00:06:37,600 --> 00:06:40,440 Speaker 1: and the Federal Reserve would take that coin and then 111 00:06:40,520 --> 00:06:42,760 Speaker 1: own that coin and record it on its balance sheet 112 00:06:42,800 --> 00:06:44,599 Speaker 1: as an asset like you and I would if we 113 00:06:44,680 --> 00:06:47,120 Speaker 1: go to coin that someone gave us UH, and then 114 00:06:47,160 --> 00:06:49,800 Speaker 1: it would credit the Treasury for the equivalent amount of 115 00:06:49,839 --> 00:06:53,279 Speaker 1: dollars that the coin is worth, which is legally speaking, 116 00:06:53,279 --> 00:06:56,480 Speaker 1: its face value, and that money would then be available 117 00:06:56,480 --> 00:07:00,800 Speaker 1: in the Treasury's regular spending account to end in the 118 00:07:00,839 --> 00:07:04,000 Speaker 1: same way as it would if it sold any other 119 00:07:04,040 --> 00:07:07,039 Speaker 1: financial instrument like a Treasury bond or a Treasury note, 120 00:07:07,680 --> 00:07:10,480 Speaker 1: and then it would go about the daily spending, and 121 00:07:10,680 --> 00:07:13,840 Speaker 1: this coin would work the way that all the other 122 00:07:13,880 --> 00:07:16,160 Speaker 1: coins that get minted on a regular basis work, in 123 00:07:16,200 --> 00:07:20,000 Speaker 1: the sense that the Mint would would issue it and 124 00:07:20,040 --> 00:07:22,880 Speaker 1: then take the money in and then sweep the money 125 00:07:22,920 --> 00:07:25,600 Speaker 1: back into the treasury sort of general account. It's general 126 00:07:25,600 --> 00:07:28,360 Speaker 1: spending account. Um. The only difference here would be that 127 00:07:28,480 --> 00:07:30,640 Speaker 1: the number of zeros on the end of the coin 128 00:07:30,680 --> 00:07:33,600 Speaker 1: would be substantially larger than most other coins, and for 129 00:07:34,120 --> 00:07:36,360 Speaker 1: a change, it would be made out of platinum instead 130 00:07:36,400 --> 00:07:40,440 Speaker 1: of cop rosing or whatever else. So, I mean, the 131 00:07:40,520 --> 00:07:43,720 Speaker 1: idea here is that basically you would bypass all the 132 00:07:43,800 --> 00:07:47,160 Speaker 1: political wrangling that we see, you know, every three or 133 00:07:47,200 --> 00:07:51,840 Speaker 1: four years nowadays, I guess over raising the debt ceiling. 134 00:07:52,200 --> 00:07:55,480 Speaker 1: And I'm wondering maybe just to like step back even further, 135 00:07:56,000 --> 00:07:59,400 Speaker 1: could you explain why we have a debt ceiling in 136 00:07:59,440 --> 00:08:01,360 Speaker 1: the first is sort of limits on the amount of 137 00:08:01,400 --> 00:08:07,800 Speaker 1: debt in the US and what that's supposed to accomplish. Yeah. Thanks, 138 00:08:07,880 --> 00:08:10,160 Speaker 1: I think it's a great starting point. The starting point, 139 00:08:10,160 --> 00:08:12,000 Speaker 1: at least to me, is to think about what the 140 00:08:12,000 --> 00:08:16,960 Speaker 1: world was like before the debt selling, and before there 141 00:08:17,160 --> 00:08:20,880 Speaker 1: was a practice where if Congress wanted to create a 142 00:08:20,880 --> 00:08:24,120 Speaker 1: new spending program or or spend on a particular project, 143 00:08:24,160 --> 00:08:28,280 Speaker 1: you know, a canal or a war or the postal service, 144 00:08:29,080 --> 00:08:33,640 Speaker 1: it would appropriate the funds used through the appropriations process, 145 00:08:34,440 --> 00:08:37,920 Speaker 1: and then usually either in a separate accompanying bill, or 146 00:08:38,000 --> 00:08:42,080 Speaker 1: sometimes in the same bill. It would direct the Treasury 147 00:08:42,600 --> 00:08:46,960 Speaker 1: on how to finance that spending. So sometimes it would say, 148 00:08:47,280 --> 00:08:50,360 Speaker 1: issue a bunch of three month bills. Sometimes it would 149 00:08:50,400 --> 00:08:53,439 Speaker 1: say issue a bunch of thirty year bonds. Sometimes it 150 00:08:53,440 --> 00:08:57,360 Speaker 1: would say issue some combination. Sometimes it would say, raise 151 00:08:57,440 --> 00:09:01,320 Speaker 1: the revenue through a cuss TAM's taxes, or through a 152 00:09:01,360 --> 00:09:04,679 Speaker 1: new tax, or through sign your ridge with the mint. 153 00:09:05,240 --> 00:09:08,160 Speaker 1: And it would tell the Treasury how which which sort 154 00:09:08,160 --> 00:09:11,640 Speaker 1: of financing mechanism, and that financing mechanism would be specific 155 00:09:11,679 --> 00:09:14,679 Speaker 1: to that spending bill. And for a long time this 156 00:09:14,760 --> 00:09:17,360 Speaker 1: was the way that things worked. Each spending commitment had 157 00:09:17,400 --> 00:09:20,480 Speaker 1: its own financing authority. But when World War One comes 158 00:09:20,520 --> 00:09:23,000 Speaker 1: along and the United States is sort of getting bigger, 159 00:09:23,000 --> 00:09:26,400 Speaker 1: and this really started probably with the Civil War with Lincoln, 160 00:09:26,400 --> 00:09:29,000 Speaker 1: but it kind of reached its sort of mature form 161 00:09:29,000 --> 00:09:33,800 Speaker 1: in the twentieth century. Um it became basically logistically unwieldy, 162 00:09:33,840 --> 00:09:39,360 Speaker 1: impractical to have a different spending authority, different financing authority, 163 00:09:39,400 --> 00:09:42,839 Speaker 1: I should say, four different spending commitments in a way 164 00:09:42,840 --> 00:09:45,520 Speaker 1: that the Treasury had no discretion. So you would have 165 00:09:45,559 --> 00:09:48,240 Speaker 1: situations where there'd be excess money left over in this 166 00:09:48,360 --> 00:09:51,720 Speaker 1: financing authority, and then a different spending commitment would not 167 00:09:51,800 --> 00:09:55,079 Speaker 1: have enough and the Treasury Secretary wouldn't be able to 168 00:09:55,160 --> 00:09:58,600 Speaker 1: move that spending a financing authority around to make sure 169 00:09:58,640 --> 00:10:01,000 Speaker 1: that it could finance everything. And so the debts in 170 00:10:01,120 --> 00:10:03,120 Speaker 1: which sort of started nine seventeen and then kind of 171 00:10:03,120 --> 00:10:07,480 Speaker 1: reached its mature forming in nine. But it was never 172 00:10:07,520 --> 00:10:10,280 Speaker 1: originally intended to be a limit on spending. It was 173 00:10:10,320 --> 00:10:15,160 Speaker 1: intended to facilitate more executive branch autonomy and discretion and 174 00:10:15,200 --> 00:10:20,160 Speaker 1: flexibility in financing practices. So so that's really interesting, and 175 00:10:20,200 --> 00:10:22,680 Speaker 1: I already learned something new because I always had just 176 00:10:22,720 --> 00:10:25,280 Speaker 1: sort of been under this assumption that the only purpose 177 00:10:25,520 --> 00:10:30,160 Speaker 1: was to create this sort of like nominal or you know, 178 00:10:30,360 --> 00:10:33,400 Speaker 1: fig leaf restraint on the amount of debt, and I 179 00:10:33,480 --> 00:10:36,920 Speaker 1: hadn't realized that actually sort of served this purpose to 180 00:10:37,160 --> 00:10:43,280 Speaker 1: establish flexibility. So these days, obviously most people would agree 181 00:10:43,320 --> 00:10:47,000 Speaker 1: is just an opportunity for politicians to grandstand and to 182 00:10:47,040 --> 00:10:50,120 Speaker 1: say they opposed the debt, even if they rang it up. Now, 183 00:10:50,360 --> 00:10:54,400 Speaker 1: you mentioned that the trillion dollar platinum coin would really 184 00:10:54,440 --> 00:10:57,400 Speaker 1: be like any other coin, except that a it would 185 00:10:57,400 --> 00:10:59,360 Speaker 1: have a lot more zeros at the end of it 186 00:10:59,679 --> 00:11:02,640 Speaker 1: and be it would be made out of platinum. What 187 00:11:02,760 --> 00:11:04,800 Speaker 1: don't you talk us about it have to be made 188 00:11:04,800 --> 00:11:07,960 Speaker 1: out of platinum. Well, this is the key thing. So Roan, 189 00:11:08,080 --> 00:11:11,240 Speaker 1: what don't you talk to us about the specific law 190 00:11:11,880 --> 00:11:16,439 Speaker 1: and where that law came from, where that gives legal 191 00:11:16,480 --> 00:11:21,440 Speaker 1: authority to the creation of this high denomination clips. Yeah. So, 192 00:11:21,520 --> 00:11:23,880 Speaker 1: you know, when you think about the debt ceiling, one 193 00:11:23,920 --> 00:11:26,840 Speaker 1: way to think about it is that there's a quantitative cap. 194 00:11:26,920 --> 00:11:29,280 Speaker 1: But within that cap, the Treasury Secretary has a lot 195 00:11:29,360 --> 00:11:31,840 Speaker 1: of discretion. They want to issue three months, one year, 196 00:11:31,880 --> 00:11:35,280 Speaker 1: two year, ten year, thirty year, or you know, fifty year. 197 00:11:35,360 --> 00:11:38,120 Speaker 1: As as Minutian was floating for a hot minute when 198 00:11:38,160 --> 00:11:40,760 Speaker 1: he was the Treasury secretary. The dead ceiling is really 199 00:11:40,760 --> 00:11:44,160 Speaker 1: talking about the aggregate cap. The Coinage Act has a 200 00:11:44,240 --> 00:11:48,520 Speaker 1: very different set of constraints. It constrains qualitatively. That is 201 00:11:48,559 --> 00:11:50,440 Speaker 1: to say, you know, if it's going to be one 202 00:11:50,480 --> 00:11:52,320 Speaker 1: center has to look like this, if it's going to 203 00:11:52,360 --> 00:11:53,920 Speaker 1: be made of gold, it could only be up to 204 00:11:53,960 --> 00:11:57,160 Speaker 1: one dollar, etcetera. But it has never and does not 205 00:11:57,280 --> 00:12:00,440 Speaker 1: today impose any quantitative cap. There's not a point where 206 00:12:00,440 --> 00:12:02,280 Speaker 1: the Mint says, oh, we produced the number of coins 207 00:12:02,280 --> 00:12:04,079 Speaker 1: we can for this year, we'll have to stop shop 208 00:12:04,120 --> 00:12:05,959 Speaker 1: in September or something. You know, it was a big 209 00:12:06,040 --> 00:12:09,200 Speaker 1: year for coins. Nothing like that. There's been no limit 210 00:12:09,200 --> 00:12:11,560 Speaker 1: on the number of coins that can be issued, but 211 00:12:11,679 --> 00:12:14,080 Speaker 1: there has been these qualitative caps and so you know, 212 00:12:14,280 --> 00:12:17,040 Speaker 1: we probably have seen you know, dollars, silver dollars, things 213 00:12:17,080 --> 00:12:20,800 Speaker 1: like that, and they're above a single dollar. There's commemorative 214 00:12:20,880 --> 00:12:24,200 Speaker 1: usually coins, you know, twenty five dollar palladium coins, certain 215 00:12:24,320 --> 00:12:27,040 Speaker 1: kinds of sort of collector coins and things. But in 216 00:12:27,080 --> 00:12:31,120 Speaker 1: the nineties particularly, there was a bill that was passed 217 00:12:31,120 --> 00:12:34,120 Speaker 1: that amended the Coinage Act to create a new provision 218 00:12:34,520 --> 00:12:39,280 Speaker 1: on two K which granted the Treasury Secretary of the 219 00:12:39,320 --> 00:12:44,480 Speaker 1: authority to Mint an issue platinum bullion or platinum proof coins. 220 00:12:44,480 --> 00:12:47,480 Speaker 1: And proof there just means a high production grade, like 221 00:12:47,880 --> 00:12:52,080 Speaker 1: very very very shiny coins of whatever denomination the Treasury 222 00:12:52,120 --> 00:12:55,960 Speaker 1: Secretary wished whatever they thought was useful and socially beneficial. 223 00:12:56,280 --> 00:12:59,040 Speaker 1: And this was originally a bill that was sponsored by 224 00:12:59,080 --> 00:13:03,319 Speaker 1: a Republican member who was the Subcommittee on Coinage is 225 00:13:04,240 --> 00:13:08,120 Speaker 1: chair named Mike Castle, in very close consultation with then 226 00:13:08,240 --> 00:13:10,920 Speaker 1: director of the Mint, Philip Deal, who was previously, I 227 00:13:10,960 --> 00:13:14,240 Speaker 1: believe the legal director of the Senate Finance Committee. It 228 00:13:14,280 --> 00:13:16,840 Speaker 1: could be Banking Committee. I could be confusing those Mint 229 00:13:16,840 --> 00:13:18,760 Speaker 1: Director Deal was probably one of the most sort of 230 00:13:18,840 --> 00:13:23,600 Speaker 1: visionary MINT directors of our generation because even putting aside 231 00:13:23,679 --> 00:13:26,680 Speaker 1: this provision, he transformed the internal budget of the MINT. 232 00:13:26,760 --> 00:13:29,840 Speaker 1: He he made it off budget in the way that 233 00:13:29,880 --> 00:13:33,440 Speaker 1: the FED is off budget. He gave it more autonomy. 234 00:13:33,559 --> 00:13:35,960 Speaker 1: He created a whole range of new products and things 235 00:13:36,040 --> 00:13:38,520 Speaker 1: to bring in more revenue. And one of the reasons 236 00:13:38,520 --> 00:13:42,320 Speaker 1: that Mike Castle like this was because it would bring 237 00:13:42,400 --> 00:13:45,200 Speaker 1: in sign rridge revenue, that is, the difference between the 238 00:13:45,200 --> 00:13:47,120 Speaker 1: face value of the coin and how much it costs 239 00:13:47,120 --> 00:13:50,040 Speaker 1: to produce, and that that revenue would go into the 240 00:13:50,080 --> 00:13:53,480 Speaker 1: Treasury's account and reduced the need for additional borrowing. So 241 00:13:53,679 --> 00:13:55,960 Speaker 1: Mike Castle was a fiscal conservatos like this is good 242 00:13:56,320 --> 00:13:57,839 Speaker 1: and from the Mint's point of view, this was a 243 00:13:58,040 --> 00:14:01,600 Speaker 1: was a pretty kind of powerful catch all provision. At 244 00:14:01,640 --> 00:14:04,760 Speaker 1: the time, the aim was actually to allow the mid 245 00:14:04,840 --> 00:14:07,320 Speaker 1: directed to make even smaller coins than the ones that 246 00:14:07,360 --> 00:14:10,240 Speaker 1: were being sold and to give more flexibility on that end. 247 00:14:10,320 --> 00:14:13,400 Speaker 1: But the way the language was written, and again Director 248 00:14:13,440 --> 00:14:16,240 Speaker 1: Deal was very intentional and very smart about this. Gave 249 00:14:16,280 --> 00:14:20,160 Speaker 1: the Treasury Secretary under the plane language, complete discretion. But 250 00:14:20,240 --> 00:14:21,840 Speaker 1: wanted to be a five dollar coin, want to be 251 00:14:21,880 --> 00:14:23,440 Speaker 1: a five hundred dollar coin, want to be a five 252 00:14:23,440 --> 00:14:25,600 Speaker 1: thousand dollar coin, Wanna be a five million dollar coin? 253 00:14:25,840 --> 00:14:29,640 Speaker 1: The law said, this is within the Treasury Secretary's discretion, 254 00:14:30,680 --> 00:14:32,640 Speaker 1: just like it's within their discretion whether to issue a 255 00:14:32,680 --> 00:14:34,600 Speaker 1: thirty year bond or a five year bond or a 256 00:14:34,640 --> 00:14:38,800 Speaker 1: fifty year bond. That law stayed on the books, and 257 00:14:39,280 --> 00:14:43,240 Speaker 1: when the regular financing system works the way it's supposed to, 258 00:14:43,360 --> 00:14:46,360 Speaker 1: nobody is looking in the draw for the crazy hail 259 00:14:46,440 --> 00:14:50,200 Speaker 1: Mary statutes. But the dead ceilings showdown sort of they were. 260 00:14:50,240 --> 00:14:52,040 Speaker 1: They were going on in a low grade way since 261 00:14:52,080 --> 00:14:54,000 Speaker 1: about the fifties, but never really to the point of 262 00:14:54,080 --> 00:14:58,560 Speaker 1: kind of complete government shutdown until about the midies, and 263 00:14:58,600 --> 00:15:01,240 Speaker 1: then it really got bad with President Obama. That was 264 00:15:01,280 --> 00:15:03,920 Speaker 1: when really for the first time that it looked like 265 00:15:03,960 --> 00:15:06,640 Speaker 1: one party would would just not play ball at all 266 00:15:07,040 --> 00:15:09,600 Speaker 1: rather than just do the regular kind of grandstanding and 267 00:15:09,600 --> 00:15:14,640 Speaker 1: grumbling and eventually pass something. And that was when a 268 00:15:14,720 --> 00:15:16,880 Speaker 1: lawyer named Carlos Mitscher, who at the time was going 269 00:15:16,960 --> 00:15:20,080 Speaker 1: under the internet Monica Beowulf did some digging because he 270 00:15:20,120 --> 00:15:22,320 Speaker 1: had heard some people talk about, you know, coinage as 271 00:15:22,320 --> 00:15:25,520 Speaker 1: a power that was under explored, and found this law 272 00:15:25,560 --> 00:15:27,720 Speaker 1: on the books and said, look, you know, we could 273 00:15:27,800 --> 00:15:32,440 Speaker 1: use this now and avoid the need to continue to 274 00:15:32,480 --> 00:15:34,920 Speaker 1: sort of have these recurrent crisis and this law is 275 00:15:34,960 --> 00:15:38,520 Speaker 1: pretty clear. This is this is a pretty clear interpretation. 276 00:15:38,600 --> 00:15:44,160 Speaker 1: There is no ambiguity here, there's no asterisks, and it 277 00:15:44,160 --> 00:15:47,680 Speaker 1: would be consistent with how coinage works in general. Again, 278 00:15:47,800 --> 00:16:06,640 Speaker 1: just a matter of degree, not kind. When the idea 279 00:16:06,680 --> 00:16:11,680 Speaker 1: of first surfaced, like, what was the intention behind it? 280 00:16:11,720 --> 00:16:14,200 Speaker 1: Do you think was it basically a thought experiment of 281 00:16:14,280 --> 00:16:17,760 Speaker 1: how you could solve the dead ceiling crisis? Or was like, 282 00:16:18,440 --> 00:16:22,160 Speaker 1: was it basically just like trolling by you know, some 283 00:16:22,240 --> 00:16:25,000 Speaker 1: finance nerds, a little bit of both. I think, you know, 284 00:16:25,040 --> 00:16:28,440 Speaker 1: I'll let Carla speak for himself, but I think, um, 285 00:16:28,480 --> 00:16:31,520 Speaker 1: he was making this comment on an MMT blog, And 286 00:16:32,040 --> 00:16:34,120 Speaker 1: you know, one of the things that mmts like to 287 00:16:34,120 --> 00:16:37,800 Speaker 1: talk about is the fact that the government spending limits 288 00:16:38,360 --> 00:16:41,120 Speaker 1: are not on the financial side, they're on real resource 289 00:16:41,160 --> 00:16:45,320 Speaker 1: and inflationary capacity, etcetera. But to the extent that there 290 00:16:45,320 --> 00:16:49,400 Speaker 1: are procedural restrictions on how the treasury spends or how 291 00:16:49,480 --> 00:16:52,400 Speaker 1: you know whether the Treasury spending account can go into 292 00:16:52,440 --> 00:16:56,280 Speaker 1: a negative overdraft or not. And those kinds of questions, Um, 293 00:16:56,320 --> 00:16:59,600 Speaker 1: they're all self imposed. They are all things that we 294 00:16:59,640 --> 00:17:01,960 Speaker 1: passed a law and could pass a different law tomorrow 295 00:17:02,000 --> 00:17:04,880 Speaker 1: and change destruction. Right, They're not They're not a sort 296 00:17:04,880 --> 00:17:09,479 Speaker 1: of physical constraint. There are a socially constructed constraint. And 297 00:17:09,560 --> 00:17:12,040 Speaker 1: so that was the sort of water that Carlos was 298 00:17:12,080 --> 00:17:16,000 Speaker 1: swimming in when he started looking into this stuff. This 299 00:17:16,119 --> 00:17:18,960 Speaker 1: was the sort of general discussions that we were having 300 00:17:19,000 --> 00:17:21,439 Speaker 1: on those blogs back in the day that was, you know, 301 00:17:21,920 --> 00:17:24,480 Speaker 1: there are things like the dead ceiling, there are things 302 00:17:24,520 --> 00:17:28,159 Speaker 1: like treasury bond auctions that happened, But are they because 303 00:17:28,200 --> 00:17:30,480 Speaker 1: they need to or just because they're sort of a 304 00:17:30,600 --> 00:17:33,439 Speaker 1: leftover of a different regime, or because they serve a 305 00:17:33,520 --> 00:17:37,160 Speaker 1: useful social fiction. And it was just one more example 306 00:17:37,240 --> 00:17:42,760 Speaker 1: of showing how arbitrary and stupid and self imposed these constraints. 307 00:17:43,040 --> 00:17:45,399 Speaker 1: Remember this is taking place against the backdrop of the 308 00:17:45,560 --> 00:17:49,400 Speaker 1: Deficit Reduction Commission and Obama saying, you know, we're out 309 00:17:49,440 --> 00:17:51,680 Speaker 1: of money now when asked when the government's going to 310 00:17:51,760 --> 00:17:53,840 Speaker 1: run out of money? And all these things. So, in 311 00:17:53,840 --> 00:17:56,320 Speaker 1: addition to solving the acute problem with the dead ceiling 312 00:17:56,359 --> 00:17:58,920 Speaker 1: crisis with this sort of clever legal hack that required 313 00:17:58,920 --> 00:18:03,000 Speaker 1: only the President's um and I guess the Mint stamping machines, 314 00:18:03,760 --> 00:18:08,720 Speaker 1: it was also a very pedagogically and and symbolically powerful 315 00:18:08,760 --> 00:18:10,680 Speaker 1: way to make the point that there's a big, fat 316 00:18:10,720 --> 00:18:13,760 Speaker 1: infinity sign next to how many dollars the US government has, 317 00:18:13,800 --> 00:18:15,840 Speaker 1: and and that's always been the case, even if we 318 00:18:15,920 --> 00:18:20,960 Speaker 1: do create laws to obscure that fact. Let's talk a 319 00:18:21,040 --> 00:18:25,360 Speaker 1: bit more about the intent behind the law and why 320 00:18:25,400 --> 00:18:27,920 Speaker 1: you're doing to see that as a problem. So, Mike 321 00:18:28,000 --> 00:18:33,000 Speaker 1: Castle from Delaware, the congressional author obviously was not thinking 322 00:18:33,040 --> 00:18:36,119 Speaker 1: of this as a way to circumvent the dead ceiling. 323 00:18:36,160 --> 00:18:39,359 Speaker 1: It was about a collectible coinage and senior edge revenue 324 00:18:39,400 --> 00:18:43,720 Speaker 1: at the Mint. Philip Deal, the Mint director at the 325 00:18:43,720 --> 00:18:47,040 Speaker 1: time we draft the language, He's like, yeah, this is legal, 326 00:18:47,480 --> 00:18:50,960 Speaker 1: but this is clearly like not the intent of the law. 327 00:18:51,080 --> 00:18:55,440 Speaker 1: It was about creating more collectible coins for people. Why 328 00:18:55,520 --> 00:18:58,960 Speaker 1: isn't that a problem? Decided It's like, look, obviously this 329 00:18:59,119 --> 00:19:02,080 Speaker 1: was not their intent. This is just about creating some 330 00:19:02,160 --> 00:19:06,600 Speaker 1: more options for collectible coin collectors. Etcetera. Why should we 331 00:19:06,640 --> 00:19:10,160 Speaker 1: now just dismiss this as sort of like an absurd 332 00:19:10,240 --> 00:19:16,600 Speaker 1: reinterpretation that's clearly not what the law is intended for. Yeah. 333 00:19:16,680 --> 00:19:18,720 Speaker 1: I think there's a couple of layers. So the first 334 00:19:18,840 --> 00:19:23,000 Speaker 1: layer is intent can be looked at narrowly or broadly. 335 00:19:23,600 --> 00:19:27,280 Speaker 1: The narrow intent here, the short term, immediate intent was 336 00:19:27,400 --> 00:19:31,800 Speaker 1: to actually make it possible to create smaller denomination platinum coins, right. 337 00:19:32,280 --> 00:19:35,120 Speaker 1: But the way that that problem was solved was not 338 00:19:35,560 --> 00:19:38,399 Speaker 1: to write a law that said the maximum value of 339 00:19:38,440 --> 00:19:41,280 Speaker 1: this coin is a hundred dollars or smaller. It was 340 00:19:41,359 --> 00:19:42,840 Speaker 1: to say, you know what, let's get out of the 341 00:19:42,840 --> 00:19:46,240 Speaker 1: business entirely of regulating what the denomination is. Let's leave 342 00:19:46,240 --> 00:19:49,720 Speaker 1: that up to the Treasury Secretary. So even if the 343 00:19:49,800 --> 00:19:53,160 Speaker 1: immediate problem is one thing, if you develop a broader 344 00:19:53,200 --> 00:19:56,760 Speaker 1: solution that it fixes that problem and fixes potential other problems, 345 00:19:56,800 --> 00:19:59,920 Speaker 1: that's fine. The second thing is, at a broader level, 346 00:20:00,320 --> 00:20:03,320 Speaker 1: the goal of this bill was to give the Mint 347 00:20:03,720 --> 00:20:07,520 Speaker 1: more tools to use the sign rridge power to generate 348 00:20:07,560 --> 00:20:10,360 Speaker 1: additional revenue that would reduce the need to borrow. That's 349 00:20:10,359 --> 00:20:13,160 Speaker 1: what my Castle has said, That's what Deal has said, 350 00:20:13,560 --> 00:20:16,320 Speaker 1: was that the goal of these commemorative coin programs, which 351 00:20:16,359 --> 00:20:18,760 Speaker 1: again remember deal kind of ramped up as the mint 352 00:20:18,800 --> 00:20:21,520 Speaker 1: director was to bring in more revenue, which meant less 353 00:20:21,520 --> 00:20:25,000 Speaker 1: borrowing was necessary. So in that sense, using it in 354 00:20:25,040 --> 00:20:28,240 Speaker 1: this way, and again I wouldn't deny it all that 355 00:20:28,280 --> 00:20:30,200 Speaker 1: there's a lot more zeros than any of the people 356 00:20:30,200 --> 00:20:32,400 Speaker 1: that wrote this whatever expected to appear on a coin 357 00:20:32,480 --> 00:20:35,920 Speaker 1: like this. In a broader sense, that is still entirely 358 00:20:35,960 --> 00:20:38,840 Speaker 1: consistent with what it's doing. It's minting a coin to 359 00:20:38,960 --> 00:20:43,760 Speaker 1: generate revenue to reduce the need to issue additional government debt. 360 00:20:44,320 --> 00:20:48,280 Speaker 1: There's another layer, which is about legislative intent, you know, 361 00:20:48,359 --> 00:20:50,080 Speaker 1: And of course we're at a time now where the 362 00:20:50,119 --> 00:20:53,040 Speaker 1: politicization of the courts is pretty overt and obvious. No 363 00:20:53,080 --> 00:20:55,239 Speaker 1: one would look at the Supreme Court and pretend that 364 00:20:55,600 --> 00:20:58,320 Speaker 1: decisions aren't going to be, you know, impacted by the 365 00:20:58,320 --> 00:21:00,600 Speaker 1: fact we have a six three court now in one way, 366 00:21:01,080 --> 00:21:03,600 Speaker 1: but a number of the people on the Court have 367 00:21:03,720 --> 00:21:06,399 Speaker 1: been pretty dismissive of legislative intent as something that they 368 00:21:06,440 --> 00:21:09,280 Speaker 1: should look to it all. Um. So if they're consistent 369 00:21:09,280 --> 00:21:11,680 Speaker 1: with their own principles, which I don't expect it will 370 00:21:11,680 --> 00:21:14,960 Speaker 1: always happen. But if they were, then that shouldn't even 371 00:21:15,000 --> 00:21:17,760 Speaker 1: be an issue for them. Um. But even even sort 372 00:21:17,760 --> 00:21:20,199 Speaker 1: of more progressive members of the Court have said, you know, 373 00:21:20,240 --> 00:21:23,919 Speaker 1: we're all textualists now, and whatever we might look to 374 00:21:24,000 --> 00:21:28,320 Speaker 1: legislative intent, we don't usually do so when the plain 375 00:21:28,480 --> 00:21:32,400 Speaker 1: meaning of the statute is so obvious, when it's very 376 00:21:32,520 --> 00:21:34,919 Speaker 1: very clear, when there's no room for sort of wiggle 377 00:21:35,040 --> 00:21:38,119 Speaker 1: room or interpretation, there's no point where we have to 378 00:21:38,160 --> 00:21:40,679 Speaker 1: sort of ask more deeply than what's being said to 379 00:21:40,760 --> 00:21:43,639 Speaker 1: us plainly to our faces. Then we don't get into 380 00:21:43,680 --> 00:21:46,640 Speaker 1: that kind of messy process of trying to work out 381 00:21:46,720 --> 00:21:49,680 Speaker 1: legislative intent. The fact that this is not the one 382 00:21:49,880 --> 00:21:53,400 Speaker 1: narrow thing that people uginally created this law for shouldn't 383 00:21:53,400 --> 00:21:55,600 Speaker 1: be fatal to it, because it's not fatal to any 384 00:21:55,600 --> 00:21:59,840 Speaker 1: other law we use. We creatively reinterpret laws all the time, 385 00:22:00,880 --> 00:22:06,000 Speaker 1: especially in moments of crisis, especially when the alternative is 386 00:22:06,080 --> 00:22:10,800 Speaker 1: even worse. And in this situation, that's I think that 387 00:22:11,080 --> 00:22:14,480 Speaker 1: the context in which this comes up is that the 388 00:22:14,560 --> 00:22:20,320 Speaker 1: alternative here is catastrophic and unconstitutional, and if we can 389 00:22:20,480 --> 00:22:24,240 Speaker 1: read this on its face, take it on its face, 390 00:22:24,840 --> 00:22:28,879 Speaker 1: and in doing so, of the not only a political 391 00:22:28,920 --> 00:22:32,360 Speaker 1: crisis and an economic crisis, but a legal constitutional crisis. 392 00:22:33,040 --> 00:22:37,600 Speaker 1: I think that's entirely consistent, and so do constitutional scholars 393 00:22:37,600 --> 00:22:40,199 Speaker 1: like Lawrence Tribe and Jack Balkan and a number of 394 00:22:40,280 --> 00:22:44,320 Speaker 1: others who have far more experience with the canons of 395 00:22:44,320 --> 00:22:50,600 Speaker 1: constitutional interpretation than I do. So two things here. I 396 00:22:50,640 --> 00:22:54,879 Speaker 1: think I understand the legality argument, and I understand also 397 00:22:55,280 --> 00:22:58,200 Speaker 1: the argument that the way the debt ceiling is currently 398 00:22:58,200 --> 00:23:02,000 Speaker 1: being used, it basically seems like an ana criticism, and 399 00:23:02,080 --> 00:23:05,760 Speaker 1: it seems like it's damaging the economy. You know, increasingly 400 00:23:06,000 --> 00:23:10,280 Speaker 1: frequently we have these like brinkmanship theater like events in 401 00:23:10,320 --> 00:23:13,359 Speaker 1: Congress where uh, they get closer and closer to a 402 00:23:13,359 --> 00:23:15,880 Speaker 1: technical default and market start to panic and it ends 403 00:23:15,960 --> 00:23:18,399 Speaker 1: up feeding back into the real economy. So that's not great. 404 00:23:19,320 --> 00:23:23,720 Speaker 1: But is minting the coin really the best way to 405 00:23:23,960 --> 00:23:28,760 Speaker 1: solve the issue? And are there any other options on 406 00:23:28,800 --> 00:23:33,640 Speaker 1: the table for permanently solving the issue of the debt ceiling? 407 00:23:33,720 --> 00:23:39,080 Speaker 1: And how realistic are those alternatives? Yeah, I mean there's 408 00:23:39,119 --> 00:23:42,760 Speaker 1: some other creative accounting gimmicks, and I think it's important 409 00:23:42,760 --> 00:23:45,439 Speaker 1: to acknowledge this is basically an accounting gimmick. But it's 410 00:23:45,480 --> 00:23:48,280 Speaker 1: an accounting gimmick to deal with an accounting failure. And 411 00:23:48,320 --> 00:23:50,240 Speaker 1: if you've ever worked in business and things, you know 412 00:23:50,320 --> 00:23:52,359 Speaker 1: that's a very common way to get around a silly 413 00:23:52,400 --> 00:23:56,040 Speaker 1: accounting restriction is to use creative accounting. So this isn't 414 00:23:56,080 --> 00:23:58,520 Speaker 1: sort of outside the realm of normality in that sense. 415 00:23:58,520 --> 00:24:00,960 Speaker 1: In fact, one of theirs as times that we really 416 00:24:01,000 --> 00:24:02,760 Speaker 1: did go to the wire with the debt ceiling was 417 00:24:03,720 --> 00:24:07,119 Speaker 1: the Treasury Secretary rated the Social Security Fund there in 418 00:24:07,160 --> 00:24:09,639 Speaker 1: a way that the Government Accountability Office later said was 419 00:24:09,680 --> 00:24:12,359 Speaker 1: probably a violation of the Social Security Act. But you know, 420 00:24:12,480 --> 00:24:17,000 Speaker 1: quote um, considering the extraordinary circumstances of the moment, it 421 00:24:17,080 --> 00:24:21,440 Speaker 1: was sort of understandable. But there are sort of other alternatives. 422 00:24:21,440 --> 00:24:25,399 Speaker 1: For example, debt held by the public. Some lawyers have 423 00:24:25,520 --> 00:24:29,160 Speaker 1: suggested that we could interpret that to exclude the treasury 424 00:24:29,160 --> 00:24:32,080 Speaker 1: securities held by the FED. The FED is currently considered, 425 00:24:32,119 --> 00:24:34,240 Speaker 1: you know, part of the public for accounting purposes for 426 00:24:34,240 --> 00:24:37,240 Speaker 1: the budget, because that's how we ignore the Fed's balance 427 00:24:37,320 --> 00:24:39,960 Speaker 1: sheet when doing budget analysis. People are saying, we could 428 00:24:39,960 --> 00:24:42,159 Speaker 1: just not count that part, and that would give us, 429 00:24:42,160 --> 00:24:44,840 Speaker 1: you know what, another five or seven trillion or something 430 00:24:44,840 --> 00:24:47,520 Speaker 1: of a breeding room. I don't find that a long 431 00:24:47,640 --> 00:24:50,720 Speaker 1: term fix it just sort of staves off the inevitable, 432 00:24:50,800 --> 00:24:52,960 Speaker 1: and hopefully we would you change the debt ceiling in 433 00:24:52,960 --> 00:24:54,919 Speaker 1: the meantime, but it's a temporary stop gap in a 434 00:24:54,960 --> 00:24:59,320 Speaker 1: way that the coin is more permanent. Others have suggested 435 00:24:59,359 --> 00:25:02,400 Speaker 1: we could issue a console, which is basically a perpetual 436 00:25:02,760 --> 00:25:06,840 Speaker 1: government bond, because the way that the debt ceiling statute 437 00:25:06,960 --> 00:25:11,240 Speaker 1: is written is that the only instruments whose quote principle 438 00:25:11,400 --> 00:25:15,960 Speaker 1: and interest is guaranteed is under that ceiling. But consoles 439 00:25:16,000 --> 00:25:18,080 Speaker 1: do not have a principle to be repaid. So this 440 00:25:18,200 --> 00:25:20,520 Speaker 1: is actually another Carlos Mitcher classic, you know, shout out 441 00:25:20,560 --> 00:25:22,840 Speaker 1: to him for for trying to follow up his his 442 00:25:22,960 --> 00:25:26,679 Speaker 1: debut album with some other sophomore hits as well. The 443 00:25:26,720 --> 00:25:29,439 Speaker 1: only sort of categorical solution I've seen that sort of 444 00:25:29,480 --> 00:25:31,720 Speaker 1: comes at the same level is just to blow through 445 00:25:31,720 --> 00:25:35,119 Speaker 1: the debt ceiling and say that the alternative would be 446 00:25:35,359 --> 00:25:38,640 Speaker 1: a default, and that violates Section five of the fourteenth 447 00:25:38,640 --> 00:25:41,720 Speaker 1: Amendment that the public debt shall not be questioned, So 448 00:25:41,840 --> 00:25:43,879 Speaker 1: we should just do that. And I think that that's 449 00:25:43,920 --> 00:25:48,640 Speaker 1: actually a much worse solution in terms of the political implications, 450 00:25:48,640 --> 00:25:52,080 Speaker 1: because it requires the press talk about that a little 451 00:25:52,080 --> 00:25:56,000 Speaker 1: bit because you mentioned the sort of you know, a 452 00:25:56,119 --> 00:25:58,800 Speaker 1: breach of the dead ceiling and a theoretical default. It's 453 00:25:58,800 --> 00:26:03,080 Speaker 1: a political crisis, it's a financial crisis because treasuries are 454 00:26:03,160 --> 00:26:05,960 Speaker 1: the world's safest asset that their defaults in the pod 455 00:26:06,240 --> 00:26:07,840 Speaker 1: it is kind of unthinkable what that would do to 456 00:26:07,880 --> 00:26:10,680 Speaker 1: the financial system. And then as you mentioned that, there 457 00:26:10,760 --> 00:26:14,080 Speaker 1: is this constitutional crisis, and so you get this sort 458 00:26:14,080 --> 00:26:16,679 Speaker 1: of question of whether a default is even legal. And 459 00:26:16,760 --> 00:26:19,520 Speaker 1: I think, like I think even that Bill Clinton has said, 460 00:26:19,560 --> 00:26:22,080 Speaker 1: you know what, just some people have said, just ignore 461 00:26:22,560 --> 00:26:25,280 Speaker 1: the dead ceiling law, keep issuing it because you could 462 00:26:25,280 --> 00:26:28,239 Speaker 1: just devoke the fourteen the Amendment, and that says you 463 00:26:28,240 --> 00:26:31,920 Speaker 1: can't question the debt. Explain to us what that that 464 00:26:32,040 --> 00:26:35,320 Speaker 1: fifth section of the fourteenth Amendment says, and why you 465 00:26:35,440 --> 00:26:41,240 Speaker 1: don't think it's safe or sound too. Simply ignore the 466 00:26:41,359 --> 00:26:45,600 Speaker 1: dead ceiling on constitutional grounds. Yeah. So, um, and and 467 00:26:45,720 --> 00:26:48,200 Speaker 1: just give some context. My my Lawer of View article 468 00:26:48,280 --> 00:26:51,320 Speaker 1: on this um is really a kind of response to 469 00:26:51,560 --> 00:26:54,520 Speaker 1: another article by a lawyer named Michael Doff and an 470 00:26:54,520 --> 00:26:57,520 Speaker 1: economist name Neil Buchanan in the Columbia Lawer of View 471 00:26:57,600 --> 00:27:01,159 Speaker 1: called how to Choose the Least unconstitution all option lessons 472 00:27:01,200 --> 00:27:03,400 Speaker 1: for the president from the debt ceiling standoff, And it's 473 00:27:03,400 --> 00:27:06,040 Speaker 1: a it's a sort of constitutional theory paper, but it 474 00:27:06,119 --> 00:27:08,080 Speaker 1: uses the debt ceiling to make the point. And it 475 00:27:08,119 --> 00:27:10,879 Speaker 1: was obviously very impactful in that debate. It came out 476 00:27:10,920 --> 00:27:13,679 Speaker 1: around and I know people in the White House and 477 00:27:13,720 --> 00:27:16,440 Speaker 1: things were reading it and considering it. And then in 478 00:27:16,520 --> 00:27:20,560 Speaker 1: their argument was basically that Congress gives the treasury three 479 00:27:20,720 --> 00:27:24,040 Speaker 1: directives spend a certain amount, tax a certain amount, borrow 480 00:27:24,080 --> 00:27:28,400 Speaker 1: a certain amount. And if the amount of spending net 481 00:27:28,480 --> 00:27:30,960 Speaker 1: of taxes, so the deficit, the size of the deficit 482 00:27:31,000 --> 00:27:34,919 Speaker 1: that needs to be financed, exceeds what is available to 483 00:27:35,119 --> 00:27:38,960 Speaker 1: be borrowed or issuing treasury debt, then there is a 484 00:27:39,000 --> 00:27:43,920 Speaker 1: paradox the treasure that the Congress has given contradictory directives 485 00:27:43,960 --> 00:27:47,560 Speaker 1: to the Treasury. And their argument was that if you 486 00:27:47,640 --> 00:27:50,760 Speaker 1: have these contradictory directors, if something has to give one 487 00:27:50,760 --> 00:27:53,399 Speaker 1: of these three the tri lemma, one of them can't stand. 488 00:27:54,280 --> 00:27:57,679 Speaker 1: That of those three, spending and taxing are sort of 489 00:27:57,840 --> 00:28:00,960 Speaker 1: core legislative fiscal power us. If we think of the 490 00:28:00,960 --> 00:28:03,640 Speaker 1: power of the purse, which you know, the legislature has 491 00:28:03,760 --> 00:28:05,360 Speaker 1: relative to the power of the pen and the power 492 00:28:05,400 --> 00:28:07,919 Speaker 1: of the sword, that spending and taxing us sort of 493 00:28:08,000 --> 00:28:11,200 Speaker 1: the very core of that power. And so if one 494 00:28:11,200 --> 00:28:14,280 Speaker 1: of these has to be violated, it's better to violate 495 00:28:14,320 --> 00:28:17,880 Speaker 1: the debt ceiling than to unilaterally have the president cut spending, 496 00:28:18,320 --> 00:28:20,120 Speaker 1: which some people are talking about. Now you know, we're 497 00:28:20,160 --> 00:28:22,480 Speaker 1: going to prioritize paying interest on the debt, but not 498 00:28:22,960 --> 00:28:26,040 Speaker 1: you know, social Security recipients or federal employees or something, 499 00:28:26,760 --> 00:28:29,840 Speaker 1: or unilaterally raising taxes and I'm just going to appropriate 500 00:28:30,119 --> 00:28:33,360 Speaker 1: people's money, and then that's how I'll finance things. Relative 501 00:28:33,400 --> 00:28:36,080 Speaker 1: to those options, blowing through the debt ceiling is the 502 00:28:36,160 --> 00:28:41,040 Speaker 1: least bad, because, let's be honest, it's an accounting gimmick anyway. 503 00:28:41,080 --> 00:28:42,960 Speaker 1: For the last seven or eight years at least, and 504 00:28:42,960 --> 00:28:45,360 Speaker 1: certainly even before that, we were basically raising it as 505 00:28:45,400 --> 00:28:48,400 Speaker 1: a pro former matter, or just suspending it entirely for 506 00:28:48,480 --> 00:28:51,320 Speaker 1: extended periods of time and then sort of re enacting 507 00:28:51,360 --> 00:28:53,400 Speaker 1: it for five minutes to whine about it, and then 508 00:28:53,400 --> 00:28:56,440 Speaker 1: suspending it again for another few years. So, given all 509 00:28:56,440 --> 00:28:58,600 Speaker 1: of that, if we have to, if one of these 510 00:28:58,680 --> 00:29:01,440 Speaker 1: has to break, let's break the debt cell And I 511 00:29:01,480 --> 00:29:04,160 Speaker 1: agree with that logic on its face in the sense 512 00:29:04,200 --> 00:29:07,280 Speaker 1: that yeah, absolutely, of those three we should violate the 513 00:29:07,320 --> 00:29:10,760 Speaker 1: dead selling rather than you know, have the executive brand 514 00:29:10,880 --> 00:29:14,320 Speaker 1: start start doing power of the purse stuff um in 515 00:29:14,360 --> 00:29:17,480 Speaker 1: the more fundamental way. But my argument was they just 516 00:29:17,600 --> 00:29:22,160 Speaker 1: missed the whole fourth option, a pretty central fourth option, 517 00:29:22,200 --> 00:29:24,440 Speaker 1: in fact, maybe even the most central, which is that 518 00:29:24,480 --> 00:29:29,400 Speaker 1: the Treasury does not only tax and borrow money, it 519 00:29:29,480 --> 00:29:31,880 Speaker 1: also creates money. And this is the kind of MMT 520 00:29:32,000 --> 00:29:34,880 Speaker 1: inside right, which is that the money that gets taxed 521 00:29:34,880 --> 00:29:37,600 Speaker 1: has to be created first. The money that gets borrowed 522 00:29:37,680 --> 00:29:40,040 Speaker 1: is usually injected in by the Federal Reserve to the 523 00:29:40,040 --> 00:29:43,720 Speaker 1: primary dealers, who then lended quote unquote to the Treasury. 524 00:29:43,800 --> 00:29:47,920 Speaker 1: And so if we start from the presumption that the 525 00:29:48,320 --> 00:29:52,840 Speaker 1: Treasury only borrows and spends money out there, we're ignoring 526 00:29:52,880 --> 00:29:55,960 Speaker 1: the fact that on a daily basis, it's creating money. 527 00:29:56,040 --> 00:30:00,160 Speaker 1: And nowadays we kind of forget that fact because as 528 00:30:00,200 --> 00:30:02,800 Speaker 1: we have delegated a lot of that responsibility to the 529 00:30:02,800 --> 00:30:04,720 Speaker 1: Federal Reserve, and we think the Federal Reserve is sort 530 00:30:04,720 --> 00:30:07,600 Speaker 1: of separate to the rest of the executive branch, you know, 531 00:30:07,640 --> 00:30:10,720 Speaker 1: and people who talk about unitary executive theory, including a 532 00:30:10,800 --> 00:30:13,360 Speaker 1: number of justices on the Supreme Court would probably disagree 533 00:30:13,360 --> 00:30:16,640 Speaker 1: with that. Maybe, but um, the reason that we have 534 00:30:16,680 --> 00:30:18,840 Speaker 1: ignored that is because, again, the mint is sort of 535 00:30:19,120 --> 00:30:22,000 Speaker 1: sounds like a quaint thing from a documentary about the 536 00:30:22,000 --> 00:30:24,440 Speaker 1: Founding Fathers with a tin whistle in the background or something, 537 00:30:24,520 --> 00:30:27,600 Speaker 1: you know. In reality, the Mint's just been there quietly 538 00:30:27,640 --> 00:30:31,080 Speaker 1: doing its job for for for decades, for centuries, and 539 00:30:31,560 --> 00:30:34,920 Speaker 1: it sends hundreds of millions of dollars a year in 540 00:30:35,080 --> 00:30:38,760 Speaker 1: sign rridge revenue back to the treasury. Um. Just like 541 00:30:38,840 --> 00:30:42,680 Speaker 1: the Fed generates billions of dollars in sign ridge revenue. 542 00:30:42,680 --> 00:30:44,760 Speaker 1: It's the same thing at just a different scale again, 543 00:30:44,840 --> 00:30:47,800 Speaker 1: just a few more zeros um. And so my argument is, 544 00:30:48,200 --> 00:30:51,360 Speaker 1: if you have to choose an unconstitutional option, yeah, violent 545 00:30:51,360 --> 00:30:53,160 Speaker 1: in the debt ceiling is probably the best one. But 546 00:30:53,240 --> 00:30:56,360 Speaker 1: if there's a constitutional option on the table, we should 547 00:30:56,480 --> 00:30:59,240 Speaker 1: be going there first. In fact, we should be really 548 00:30:59,280 --> 00:31:02,640 Speaker 1: trying to go there first, because the alternative is that 549 00:31:02,680 --> 00:31:07,280 Speaker 1: the president gets to choose when they break laws that 550 00:31:07,400 --> 00:31:10,360 Speaker 1: Congress has told them to. And if the reason they 551 00:31:10,360 --> 00:31:13,600 Speaker 1: have to break the law is I literally have no choice, Okay, 552 00:31:13,640 --> 00:31:16,000 Speaker 1: I get it. But if they do have a choice, 553 00:31:16,040 --> 00:31:19,200 Speaker 1: and they just prefer not to use it. That's a 554 00:31:19,360 --> 00:31:22,360 Speaker 1: very different kind of power graph. That's a very different 555 00:31:22,440 --> 00:31:25,200 Speaker 1: kind of way that the president is interpreting it. And 556 00:31:25,240 --> 00:31:27,719 Speaker 1: the way that people have interpreted this is maybe this 557 00:31:27,800 --> 00:31:30,120 Speaker 1: is legal, maybe I can do this, but we shouldn't 558 00:31:30,720 --> 00:31:33,680 Speaker 1: why because then we would reveal to the public how 559 00:31:33,720 --> 00:31:36,840 Speaker 1: money works. We reveal that printing a trillion dollar coin 560 00:31:36,880 --> 00:31:38,600 Speaker 1: is the same as printing a trillion dollars in debt. 561 00:31:38,640 --> 00:31:41,480 Speaker 1: There's no difference between, you know, borrowing and printing money 562 00:31:41,480 --> 00:31:44,240 Speaker 1: on from an economic point of viewing things. And the 563 00:31:44,280 --> 00:31:46,800 Speaker 1: public can't handle the truth. You know, it's Jack Nicholson 564 00:31:46,800 --> 00:31:49,360 Speaker 1: in a few good men. You can't handle the truth. 565 00:31:49,800 --> 00:31:52,400 Speaker 1: And so we need to keep this myth alive that 566 00:31:52,520 --> 00:31:55,760 Speaker 1: money is scarce, that we can only tax or borrow it. 567 00:31:56,680 --> 00:31:59,360 Speaker 1: We can't talk about the big Infinity sign in the sky. 568 00:32:00,160 --> 00:32:03,400 Speaker 1: And in the name of preserving that myth, where you're 569 00:32:03,400 --> 00:32:06,000 Speaker 1: going to violate the Constitution. And that's why they lose 570 00:32:06,000 --> 00:32:12,960 Speaker 1: me when you're knowingly advocating unconstitutional behavior over constitutional options 571 00:32:13,000 --> 00:32:16,680 Speaker 1: because you think it's important to perpetuate a lie. So 572 00:32:16,840 --> 00:32:21,040 Speaker 1: my understanding of that argument isn't that it's necessarily about 573 00:32:21,080 --> 00:32:24,760 Speaker 1: protecting the public from the truth and hiding the true 574 00:32:24,880 --> 00:32:28,120 Speaker 1: nature of debt. But that you know, minting the coin 575 00:32:28,440 --> 00:32:33,480 Speaker 1: is basically like a large scale financial experiment and one 576 00:32:33,520 --> 00:32:37,400 Speaker 1: that we don't necessarily know the consequences of, and that 577 00:32:37,440 --> 00:32:41,680 Speaker 1: seems like a heavy price for the potential, you know, 578 00:32:41,760 --> 00:32:45,120 Speaker 1: like maybe we would get a chance at educating the 579 00:32:45,120 --> 00:32:50,160 Speaker 1: public over how government finances don't function like household finances. 580 00:32:50,160 --> 00:32:53,400 Speaker 1: Like to me, it's that sort of like cost versus 581 00:32:53,440 --> 00:32:57,120 Speaker 1: benefit analysis. So I don't know. I guess my question 582 00:32:57,200 --> 00:32:59,320 Speaker 1: is what's your response to that? And then be like 583 00:32:59,440 --> 00:33:03,200 Speaker 1: what could go wrong if the coin was minted? Like 584 00:33:03,280 --> 00:33:07,600 Speaker 1: where are the risks in this project? Yeah? I mean 585 00:33:07,640 --> 00:33:09,200 Speaker 1: I think, you know, not not to sort of play 586 00:33:09,240 --> 00:33:12,240 Speaker 1: burden shifting games, but I think the idea that we 587 00:33:12,320 --> 00:33:17,480 Speaker 1: are going to normalize the president explicitly violating the Constitution 588 00:33:18,160 --> 00:33:21,640 Speaker 1: whenever they think telling the truth is going to cause 589 00:33:21,720 --> 00:33:26,480 Speaker 1: adverse social outcomes is to me, I think also a 590 00:33:26,480 --> 00:33:29,960 Speaker 1: pretty big experiment. It's also pretty risky to let the 591 00:33:29,960 --> 00:33:32,280 Speaker 1: presidents say, oh, no, I'm not going to enforce that law. No, 592 00:33:32,360 --> 00:33:34,120 Speaker 1: I'm going to do this thing that I'm explicitly set 593 00:33:34,160 --> 00:33:36,560 Speaker 1: told I can't do because I don't like the other 594 00:33:36,600 --> 00:33:38,840 Speaker 1: options available to me to achieve an outcome I think 595 00:33:38,920 --> 00:33:41,440 Speaker 1: is needed. So I don't think it's a matter of 596 00:33:41,520 --> 00:33:44,760 Speaker 1: what is untested and risky and the other isn't blowing 597 00:33:44,800 --> 00:33:47,800 Speaker 1: through the debt ceiling, just saying stuff it, I don't care. 598 00:33:47,800 --> 00:33:49,480 Speaker 1: We're just going to ignore it because there's a higher 599 00:33:49,520 --> 00:33:53,000 Speaker 1: calling I've got no better option, when in reality they 600 00:33:53,040 --> 00:33:55,280 Speaker 1: know full well there's another option. They just don't want 601 00:33:55,320 --> 00:33:57,960 Speaker 1: to talk about that option or don't want to try it. 602 00:33:58,040 --> 00:34:01,720 Speaker 1: Is I think a real threat to having an informed 603 00:34:01,720 --> 00:34:06,360 Speaker 1: electorate and having a public policy discussion based in fact, 604 00:34:06,480 --> 00:34:10,680 Speaker 1: not based in what the administration feels that the public 605 00:34:10,719 --> 00:34:13,040 Speaker 1: needs to know. I think we're in the same category 606 00:34:13,080 --> 00:34:15,520 Speaker 1: as you know, secret fires are courts or weapons of 607 00:34:15,600 --> 00:34:20,799 Speaker 1: mass destruction when we start embracing unconstitutional behavior based on 608 00:34:20,960 --> 00:34:23,759 Speaker 1: fears of how the public will react to the truth 609 00:34:23,960 --> 00:34:26,600 Speaker 1: and in terms of the coin being untested, I think 610 00:34:27,200 --> 00:34:29,680 Speaker 1: we have actually quite a lot of evidence of the 611 00:34:29,719 --> 00:34:34,280 Speaker 1: past decade that large scale quote unquote monetization of government 612 00:34:34,280 --> 00:34:36,759 Speaker 1: debt doesn't really do anything right. Yes, there's a few 613 00:34:36,840 --> 00:34:39,239 Speaker 1: middle steps in the middle there that give the impression 614 00:34:39,239 --> 00:34:42,359 Speaker 1: that this is all market mediated, but the effect is 615 00:34:42,560 --> 00:34:44,840 Speaker 1: if you put the Treasury and the Central Bank together, 616 00:34:45,880 --> 00:34:48,439 Speaker 1: that they're running a deficit of eight billion and they're 617 00:34:48,520 --> 00:34:51,400 Speaker 1: creating eighty billion dollars of new currency or new reserves 618 00:34:51,440 --> 00:34:56,320 Speaker 1: every month. Um. So if there is some catastrophic economic effect, 619 00:34:57,200 --> 00:34:59,799 Speaker 1: we haven't seen it. And nobody who who I think 620 00:35:00,040 --> 00:35:02,480 Speaker 1: respect on the economics says that that would that comes 621 00:35:02,560 --> 00:35:05,879 Speaker 1: naturally told pregnant says, yeah, this is economically indistinguishable from 622 00:35:05,920 --> 00:35:10,000 Speaker 1: issuing debt. And I just think that, you know, constitutional 623 00:35:10,200 --> 00:35:31,719 Speaker 1: behavior should not be guided by preserved delusions. So I 624 00:35:31,760 --> 00:35:35,240 Speaker 1: want to keep pressing on this question. And as I mentioned, 625 00:35:35,320 --> 00:35:38,640 Speaker 1: you you actually know like how things work a little 626 00:35:38,640 --> 00:35:41,600 Speaker 1: bit in d C. You have worked with some members 627 00:35:41,600 --> 00:35:45,520 Speaker 1: of Congress to draft laws promoting the minting of the coin. 628 00:35:46,040 --> 00:35:48,040 Speaker 1: Like I said, you're, in addition to being a scholar, 629 00:35:48,160 --> 00:35:51,200 Speaker 1: sort of a policy entrepreneur. You've worked with last March 630 00:35:51,320 --> 00:35:55,880 Speaker 1: during the debt, during the COVID crisis, you pushed forward 631 00:35:55,920 --> 00:36:00,400 Speaker 1: some legislation, help write some legislation on minting coins. But 632 00:36:00,520 --> 00:36:04,440 Speaker 1: when you know, the White House, for example, very dismissive 633 00:36:04,920 --> 00:36:06,960 Speaker 1: of the coin idea. They don't even really give it 634 00:36:07,440 --> 00:36:09,640 Speaker 1: the time of day. I mean, if you were to say, 635 00:36:09,640 --> 00:36:13,879 Speaker 1: like ask the Press Secretary Jen Saki, you know, like 636 00:36:14,080 --> 00:36:17,560 Speaker 1: what about the coin option. My impression is they basically 637 00:36:17,719 --> 00:36:20,960 Speaker 1: just laugh it off. And I'm still like I'm trying 638 00:36:21,000 --> 00:36:24,360 Speaker 1: to understand why, because I guess, on one hand, I 639 00:36:24,360 --> 00:36:26,960 Speaker 1: sort of get this idea that's like, oh, we have 640 00:36:27,040 --> 00:36:29,960 Speaker 1: to preserve the myth of money and how like we 641 00:36:30,000 --> 00:36:32,000 Speaker 1: can't just create money out of thin air, And I 642 00:36:32,040 --> 00:36:35,040 Speaker 1: get that maybe some people believe that, but it also 643 00:36:35,200 --> 00:36:40,320 Speaker 1: seems like probably a prevailing view is this is just silly, 644 00:36:40,440 --> 00:36:42,399 Speaker 1: We're not going to talk about this, and that their 645 00:36:42,440 --> 00:36:45,200 Speaker 1: dismissal is just the sort of like this is too 646 00:36:45,239 --> 00:36:48,520 Speaker 1: silly for us to even talk about. And I'm curious 647 00:36:48,560 --> 00:36:51,319 Speaker 1: what your view is like when you sort of just 648 00:36:51,360 --> 00:36:53,920 Speaker 1: get these like is it really because oh they all like, 649 00:36:54,280 --> 00:36:56,120 Speaker 1: you know, the White House really doesn't want to let 650 00:36:56,200 --> 00:36:58,520 Speaker 1: us in on the secret of money? Or is it 651 00:36:58,600 --> 00:37:01,440 Speaker 1: really just they have put much started to it, except 652 00:37:01,520 --> 00:37:04,319 Speaker 1: that it's too silly for them to even contemplate and 653 00:37:04,360 --> 00:37:08,239 Speaker 1: talk about. It's like a real thing they would do. Yeah, yeah, No, 654 00:37:08,480 --> 00:37:10,520 Speaker 1: I don't think that the White House is sitting there 655 00:37:10,600 --> 00:37:13,319 Speaker 1: necessarily going, oh, we need to preserve these myths that's 656 00:37:13,400 --> 00:37:17,320 Speaker 1: that's more the general sort of intellectual community that doesn't 657 00:37:17,320 --> 00:37:19,760 Speaker 1: want to entertain this. They'll entertain all sorts of creative 658 00:37:19,760 --> 00:37:23,200 Speaker 1: accounting gimmicks, will entertain all sorts of kind of extremely 659 00:37:23,280 --> 00:37:26,280 Speaker 1: tenuous interpretations of the law. And remember we're talking about 660 00:37:26,480 --> 00:37:29,600 Speaker 1: the same kind of financial legal commentary at that went 661 00:37:29,640 --> 00:37:32,799 Speaker 1: to town on the Fed's thirteen three emergency powers and 662 00:37:32,880 --> 00:37:35,400 Speaker 1: whatever the Republicans might have come back to the negotiating 663 00:37:35,440 --> 00:37:37,680 Speaker 1: table back then, when John Beano was in charge and things. 664 00:37:37,760 --> 00:37:40,680 Speaker 1: I think it's a very different Republican party today, and 665 00:37:40,719 --> 00:37:43,279 Speaker 1: I think even Mitch McConnell is is quite overt that 666 00:37:43,320 --> 00:37:45,320 Speaker 1: he's playing a very different game and he was playing 667 00:37:45,880 --> 00:37:48,600 Speaker 1: back then. And they're probably quite willing to let the 668 00:37:48,719 --> 00:37:51,840 Speaker 1: US go over that cliff. Probably not, i think, for 669 00:37:51,880 --> 00:37:54,759 Speaker 1: treasury securities, for the interest on treasury debt, But I 670 00:37:54,760 --> 00:37:57,440 Speaker 1: think McConnell would have no problem with a few weeks 671 00:37:57,480 --> 00:38:00,960 Speaker 1: of Social Security payments and government employee payments not being made, 672 00:38:01,000 --> 00:38:03,520 Speaker 1: so that there was a precedent that in the future, 673 00:38:03,800 --> 00:38:07,120 Speaker 1: any debt ceiling crisis would would hurt you domestic spending 674 00:38:07,160 --> 00:38:09,719 Speaker 1: but not bond holders or something like that. Um and 675 00:38:09,719 --> 00:38:12,680 Speaker 1: that that was allowed within the fourteenth Amendment. But I 676 00:38:12,719 --> 00:38:15,040 Speaker 1: think the short answer is that the Democrats would prefer 677 00:38:15,160 --> 00:38:17,480 Speaker 1: that the Republicans come back to the table and pass 678 00:38:17,600 --> 00:38:20,600 Speaker 1: this as a matter of course, and they don't want 679 00:38:20,640 --> 00:38:25,000 Speaker 1: to entertain solutions that assume that strategy has failed. We 680 00:38:25,000 --> 00:38:26,560 Speaker 1: don't want to entertain that we can do this on 681 00:38:26,600 --> 00:38:28,279 Speaker 1: our own, because we think this is something you should 682 00:38:28,360 --> 00:38:30,160 Speaker 1: keep coming to the table and working with us on. 683 00:38:30,920 --> 00:38:34,120 Speaker 1: And you know, my god, maybe it's the last institutional 684 00:38:34,200 --> 00:38:37,960 Speaker 1: norm in d C that anybody genuinely believes is going 685 00:38:37,960 --> 00:38:41,879 Speaker 1: to be respected. Um, but I think, frankly it's it's 686 00:38:41,880 --> 00:38:44,359 Speaker 1: a form of naivety to think that the Republicans want 687 00:38:44,400 --> 00:38:46,680 Speaker 1: to come to the to the table with this and 688 00:38:46,680 --> 00:38:49,120 Speaker 1: and that they won't press that nuclear button. Right, we 689 00:38:49,480 --> 00:38:52,600 Speaker 1: were in a post January sixth world now, And yeah, 690 00:38:52,640 --> 00:38:55,080 Speaker 1: I think there's a very obvious political Yeah, there's an 691 00:38:55,080 --> 00:38:57,480 Speaker 1: obvious political calculus for the White House. I just think 692 00:38:57,520 --> 00:39:00,239 Speaker 1: it's wrong today. It might have been right inven It 693 00:39:00,320 --> 00:39:03,080 Speaker 1: might have been dangerous to gamble, but they successfully gambled then. 694 00:39:03,120 --> 00:39:05,600 Speaker 1: But I think with ten years later and the Democrats 695 00:39:05,600 --> 00:39:09,520 Speaker 1: haven't upgraded their playbook, but the Republicans have so a 696 00:39:09,600 --> 00:39:13,720 Speaker 1: related topic. Then what do you think public opinion would 697 00:39:13,800 --> 00:39:16,799 Speaker 1: be like if the government did actually go ahead and 698 00:39:16,880 --> 00:39:19,920 Speaker 1: decide that this was something that they were going to try. 699 00:39:20,160 --> 00:39:22,800 Speaker 1: And I mean, both you and Joe have been talking 700 00:39:22,840 --> 00:39:25,239 Speaker 1: and writing about this topic for over a decade now, 701 00:39:25,320 --> 00:39:28,799 Speaker 1: and there's still a ton of skepticism about it, you know, 702 00:39:28,920 --> 00:39:32,320 Speaker 1: even with you know, you're mostly talking to like people 703 00:39:32,360 --> 00:39:34,880 Speaker 1: who take an interest in finance and are trying to 704 00:39:35,080 --> 00:39:39,359 Speaker 1: understand the logic and the rationale behind actually doing this, 705 00:39:39,480 --> 00:39:41,880 Speaker 1: and it's still sort of an upwards battle. So I 706 00:39:41,880 --> 00:39:44,800 Speaker 1: guess I'm just curious what do you think most people 707 00:39:44,840 --> 00:39:48,600 Speaker 1: would think about this? And then secondly, is there anything 708 00:39:49,280 --> 00:39:54,560 Speaker 1: that policymakers or the government can actually do to educate 709 00:39:54,680 --> 00:39:58,000 Speaker 1: about how the whole thing works? Yeah? I mean I 710 00:39:58,000 --> 00:39:59,880 Speaker 1: think there's sort of two different groups of people, right. 711 00:40:00,000 --> 00:40:02,880 Speaker 1: There's the economists and the economic commentators who know just 712 00:40:03,080 --> 00:40:05,319 Speaker 1: enough to be dangerous, right and just enough to have 713 00:40:05,400 --> 00:40:09,040 Speaker 1: strongly informed opinions that may be based on faulty premises. 714 00:40:09,440 --> 00:40:11,160 Speaker 1: And those are the ones that I was really talking 715 00:40:11,200 --> 00:40:13,239 Speaker 1: about before when I talked about kind of pulling back 716 00:40:13,239 --> 00:40:15,239 Speaker 1: the veil of money, right, I mean, we've been talking 717 00:40:15,239 --> 00:40:17,000 Speaker 1: about m m T for a lot longer even than 718 00:40:17,040 --> 00:40:18,880 Speaker 1: the coin. And there are a lot of people that 719 00:40:19,000 --> 00:40:21,879 Speaker 1: still think it's dangerous to admit what is I think 720 00:40:21,880 --> 00:40:25,240 Speaker 1: plainly evident to people now, which is that when it matters, 721 00:40:25,280 --> 00:40:27,200 Speaker 1: there's no limit to how many dollars you can you 722 00:40:27,239 --> 00:40:29,200 Speaker 1: can create and spend. But there still a lot of 723 00:40:29,200 --> 00:40:31,040 Speaker 1: people that think that that's a dangerous thing to admit 724 00:40:31,040 --> 00:40:32,799 Speaker 1: out loud, and we shouldn't do it. And you know 725 00:40:33,000 --> 00:40:34,840 Speaker 1: where you fall on that is probably where you're going 726 00:40:34,880 --> 00:40:36,840 Speaker 1: to continue to fall if you're already an adult with 727 00:40:36,880 --> 00:40:39,640 Speaker 1: a PhD in economics or you're right for financial journalism, 728 00:40:39,840 --> 00:40:43,080 Speaker 1: there's a living but Um, the average person, I think 729 00:40:43,120 --> 00:40:46,040 Speaker 1: I probably wouldn't even notice. They would only notice two 730 00:40:46,120 --> 00:40:48,400 Speaker 1: d extent they were told by the press. So it 731 00:40:48,400 --> 00:40:50,600 Speaker 1: would be a huge question of how this gets framed, 732 00:40:50,920 --> 00:40:53,080 Speaker 1: And of course it gets framed differently to different people, 733 00:40:53,160 --> 00:40:55,680 Speaker 1: depending on which kind of media you consume, and it 734 00:40:55,719 --> 00:40:58,960 Speaker 1: gets framed differently depending on who controls the narrative initially 735 00:40:59,000 --> 00:41:01,040 Speaker 1: and who sets the term of how that debate gets 736 00:41:01,040 --> 00:41:03,439 Speaker 1: Frank you know, death panels was a very powerful line, 737 00:41:03,440 --> 00:41:06,160 Speaker 1: regardless of how true it was. Um and Trump did 738 00:41:06,160 --> 00:41:09,200 Speaker 1: a masterful job of dominating that the news cycle by 739 00:41:09,280 --> 00:41:12,319 Speaker 1: just being more outrageous every every five minutes, so that 740 00:41:12,440 --> 00:41:15,480 Speaker 1: nobody could really reclaim the prior narrative because he was 741 00:41:15,480 --> 00:41:17,040 Speaker 1: onto the next one, and that was the way the 742 00:41:17,040 --> 00:41:19,440 Speaker 1: public attention went. So I think the short answer, and 743 00:41:19,480 --> 00:41:21,360 Speaker 1: I sort of actually made this point in my paper, is, 744 00:41:21,880 --> 00:41:24,600 Speaker 1: you know, do it on a rainy Friday afternoon, just 745 00:41:24,719 --> 00:41:27,640 Speaker 1: like they do when they make an announcement about a fire, 746 00:41:27,680 --> 00:41:29,960 Speaker 1: as a court you know, change, or a Patriot Act 747 00:41:30,000 --> 00:41:32,120 Speaker 1: amendment or any other kind of law that they don't 748 00:41:32,160 --> 00:41:35,520 Speaker 1: really want the public to notice. Do it over the weekend, 749 00:41:35,640 --> 00:41:38,120 Speaker 1: and then tell everyone on Monday, you know, afternoon that 750 00:41:38,160 --> 00:41:40,439 Speaker 1: it's been done. And you know what, the markets didn't 751 00:41:40,440 --> 00:41:43,399 Speaker 1: collapse and the world kept on spinning, and it's done. 752 00:41:43,400 --> 00:41:45,440 Speaker 1: Now you can complain about it, or you can move 753 00:41:45,480 --> 00:41:47,359 Speaker 1: on and we can get back to the really important work. 754 00:41:47,960 --> 00:41:49,960 Speaker 1: And I think, you know, if they did that, there 755 00:41:49,960 --> 00:41:53,000 Speaker 1: would probably be a bunch of Democrats that would complain 756 00:41:53,040 --> 00:41:55,319 Speaker 1: about it for a while and then fall back in line, 757 00:41:55,360 --> 00:41:59,680 Speaker 1: because the alternative of reinforcing the other sides argument is armageddon, 758 00:42:00,280 --> 00:42:02,760 Speaker 1: and there'll be a bunch of Democrats that would probably 759 00:42:02,800 --> 00:42:05,040 Speaker 1: be relieved to hear this is all finally over. Think 760 00:42:05,040 --> 00:42:06,920 Speaker 1: it's a little bit stupid, but say I'm glad that 761 00:42:06,960 --> 00:42:09,160 Speaker 1: it's done. There would be a lot of you know, 762 00:42:09,400 --> 00:42:11,640 Speaker 1: financial investors and things that would go, wow, I can't 763 00:42:11,680 --> 00:42:14,120 Speaker 1: believe they did that. But again, I'm glad that payments 764 00:42:14,120 --> 00:42:16,000 Speaker 1: are going to continue to be made and finally we 765 00:42:16,040 --> 00:42:19,000 Speaker 1: can kind of move on from this insanity where the 766 00:42:19,000 --> 00:42:21,280 Speaker 1: most powerful economy in the world that runs a global 767 00:42:21,360 --> 00:42:25,080 Speaker 1: reserve currency is constantly on on the edge of tripping 768 00:42:25,080 --> 00:42:27,200 Speaker 1: over its own shoelaces and falling off a cliff to 769 00:42:27,239 --> 00:42:30,239 Speaker 1: its death. You know, if you did frame it the 770 00:42:30,360 --> 00:42:32,239 Speaker 1: right way, right, I think there was someone on Twitter 771 00:42:32,239 --> 00:42:33,560 Speaker 1: that had a good threat of you know, they could 772 00:42:33,560 --> 00:42:36,200 Speaker 1: even write Biden speech right now. You know, I'm sick 773 00:42:36,239 --> 00:42:38,400 Speaker 1: of these games. This is a dumb solution to a 774 00:42:38,480 --> 00:42:41,440 Speaker 1: dumb problem. Let's move on. Let's talk about what really matters. 775 00:42:41,480 --> 00:42:43,360 Speaker 1: You know, I think people are going, all right, fine, 776 00:42:44,000 --> 00:42:47,200 Speaker 1: it's crazy, but no crazier than people storming the capital 777 00:42:47,280 --> 00:42:50,120 Speaker 1: or an orange clown being president for four years. All right, 778 00:42:50,239 --> 00:42:53,359 Speaker 1: this is this is the new normal. Let's let's move on. 779 00:42:54,160 --> 00:42:57,560 Speaker 1: But again, most people aren't scouring the treasury General accounts 780 00:42:57,640 --> 00:43:00,200 Speaker 1: reports on a daily basis. They only know of this 781 00:43:00,239 --> 00:43:03,279 Speaker 1: stuff if a bunch of media people told them. Let 782 00:43:03,280 --> 00:43:07,560 Speaker 1: me ask, actually, like one more sort of technical legal questions. 783 00:43:07,640 --> 00:43:12,000 Speaker 1: So you sort of established that the Mint creates money, 784 00:43:12,239 --> 00:43:16,399 Speaker 1: the Treasury has secretaries of the discretion to create high 785 00:43:16,400 --> 00:43:22,600 Speaker 1: denomination platinum coins. Are there any questions about whether there 786 00:43:22,600 --> 00:43:25,640 Speaker 1: would be a dilemma or a debate at the Federal 787 00:43:25,719 --> 00:43:31,799 Speaker 1: Reserve itself about whether it would be compelled to accept it. 788 00:43:31,840 --> 00:43:37,240 Speaker 1: Would it have any um agency in the question of Okay, 789 00:43:37,440 --> 00:43:39,880 Speaker 1: you make an argument that it's all pretty legal, but 790 00:43:40,040 --> 00:43:42,120 Speaker 1: maybe there are lawyers at the FED who would say, no, 791 00:43:42,239 --> 00:43:45,600 Speaker 1: this is about collectibles. This is not about replenishing the 792 00:43:45,640 --> 00:43:50,279 Speaker 1: Treasury General account. Is there any dimension from the FED 793 00:43:50,360 --> 00:43:53,160 Speaker 1: side of the equation? Yeah, And then this is a 794 00:43:53,160 --> 00:43:54,879 Speaker 1: good question. I think that that there's there's one thing 795 00:43:54,880 --> 00:43:58,400 Speaker 1: that's important to start with, which is blustering that you 796 00:43:58,560 --> 00:44:01,759 Speaker 1: that something is illegal is often a good way to 797 00:44:01,880 --> 00:44:05,440 Speaker 1: ensure that the legality never gets challenged. Right, And so 798 00:44:05,600 --> 00:44:08,680 Speaker 1: the FED saying we wouldn't accept it is at this 799 00:44:08,719 --> 00:44:12,279 Speaker 1: point all upside and no downside risk for them. Right, 800 00:44:12,719 --> 00:44:14,640 Speaker 1: if you try to make us accept it, will say no, 801 00:44:14,920 --> 00:44:17,280 Speaker 1: and then you force and then you try and they're like, okay, fine, 802 00:44:17,640 --> 00:44:20,080 Speaker 1: you know, but right now, yeah, they're going to say, 803 00:44:20,080 --> 00:44:22,279 Speaker 1: we don't think we would have to accept it. But 804 00:44:22,560 --> 00:44:25,640 Speaker 1: the Federal Reserve Act is actually quite clear. And again 805 00:44:25,640 --> 00:44:27,600 Speaker 1: this is something that Carlos pointed out, you know, back 806 00:44:27,600 --> 00:44:30,640 Speaker 1: in the original formulation of this proposal, which is that 807 00:44:31,360 --> 00:44:33,880 Speaker 1: there's a statutory provision that says, in the event that 808 00:44:33,960 --> 00:44:37,640 Speaker 1: there is a conflict between the Treasury Secretary and the 809 00:44:37,840 --> 00:44:41,120 Speaker 1: Board of Governors of the Federal Reserve regarding any powers, 810 00:44:41,200 --> 00:44:44,759 Speaker 1: you know, related to the Treasury, uh, that conflict shall 811 00:44:44,800 --> 00:44:47,319 Speaker 1: be resolved in favor of the Treasury Secretary. And again 812 00:44:47,360 --> 00:44:51,239 Speaker 1: that's quite unequivocal. That's quite clear statutory language. So if 813 00:44:51,280 --> 00:44:55,319 Speaker 1: the Treasury said, hey, it is my statutory responsibility to 814 00:44:55,360 --> 00:44:58,920 Speaker 1: mint coins, statute says that I shall mint and issue 815 00:44:59,640 --> 00:45:02,719 Speaker 1: coin or whatever denomination I want, and I decided to 816 00:45:02,760 --> 00:45:04,919 Speaker 1: do this, you do not have the power to tell 817 00:45:04,960 --> 00:45:07,800 Speaker 1: me that my coinage power is limited in this way. 818 00:45:08,000 --> 00:45:09,759 Speaker 1: This is not a Federal Reserve power. This is a 819 00:45:09,760 --> 00:45:12,279 Speaker 1: mint power and that falls squarely within my authority. And 820 00:45:12,320 --> 00:45:14,879 Speaker 1: if you think you disagree with that, well I don't 821 00:45:14,920 --> 00:45:17,319 Speaker 1: care and in fact, the law and Congress said we 822 00:45:17,360 --> 00:45:20,640 Speaker 1: don't care either. So that's the first thing. The second 823 00:45:20,640 --> 00:45:24,120 Speaker 1: thing is that right now, the FED is the is 824 00:45:24,160 --> 00:45:28,200 Speaker 1: the Treasury's fiscal agent. That is to say, it provides 825 00:45:28,320 --> 00:45:32,200 Speaker 1: the accounting and payment sort of settlement services on behalf 826 00:45:32,200 --> 00:45:35,480 Speaker 1: of the treasury. So for the FED to refuse to 827 00:45:35,560 --> 00:45:40,320 Speaker 1: accept a coin like this would be effectively saying, um, 828 00:45:40,400 --> 00:45:44,400 Speaker 1: you have come to us to try to deposit public moneies, 829 00:45:44,600 --> 00:45:49,120 Speaker 1: you know, monies, and we're saying them and we yeah, 830 00:45:49,200 --> 00:45:51,520 Speaker 1: we were required to be your fiscal agent. We're crying 831 00:45:51,560 --> 00:45:53,160 Speaker 1: to provide these services, but we don't want to provide 832 00:45:53,160 --> 00:45:56,560 Speaker 1: this one. And I again don't think there's any justification 833 00:45:56,600 --> 00:45:58,880 Speaker 1: for that. But even before we get to kind of 834 00:45:58,880 --> 00:46:01,840 Speaker 1: black letter law arguments, there's just the politics of it, 835 00:46:01,880 --> 00:46:04,560 Speaker 1: which is and you can see people like Bernankee over 836 00:46:04,600 --> 00:46:07,120 Speaker 1: the last decade saying we will do whatever Congress needs 837 00:46:07,160 --> 00:46:09,400 Speaker 1: us to do. We will do whatever needs to be 838 00:46:09,480 --> 00:46:12,839 Speaker 1: done when there's a crisis. Two thousand and eight, Right, 839 00:46:13,120 --> 00:46:16,520 Speaker 1: you've got Timmy Guitner or Minution or whoever it is, 840 00:46:16,800 --> 00:46:19,239 Speaker 1: huddled up with the FED chair every day on the 841 00:46:19,280 --> 00:46:22,640 Speaker 1: phone hours a day, right, multiple meetings, whatever, you need, 842 00:46:22,680 --> 00:46:26,080 Speaker 1: We're standing by to accommodate and support. So if there 843 00:46:26,160 --> 00:46:28,319 Speaker 1: was a moment where President Biden said, I believe it 844 00:46:28,360 --> 00:46:32,680 Speaker 1: is my constitutional responsibility to avoid a crisis and shutdown, 845 00:46:32,800 --> 00:46:35,600 Speaker 1: to avoid putting the public debt in question, to to 846 00:46:35,640 --> 00:46:39,040 Speaker 1: avoid not spending what Congress has told me I must 847 00:46:39,080 --> 00:46:42,560 Speaker 1: spend that in my powers commander in chief and head 848 00:46:42,560 --> 00:46:45,880 Speaker 1: of the executive Branch, I'm directing my Treasury Secretary to 849 00:46:45,880 --> 00:46:49,480 Speaker 1: to mint this coin. And the FED stands up and says, no, 850 00:46:50,360 --> 00:46:53,640 Speaker 1: we preferred de fall. Well, I think that would be 851 00:46:53,680 --> 00:46:57,440 Speaker 1: incredibly dangerous for the future of Federal Reserve independence. And 852 00:46:57,480 --> 00:47:00,319 Speaker 1: I think no smart FED chair would do that because 853 00:47:00,320 --> 00:47:02,120 Speaker 1: they would know in that moment that if this all 854 00:47:02,160 --> 00:47:04,480 Speaker 1: does go haywi, if this all does go belly up, 855 00:47:05,000 --> 00:47:07,279 Speaker 1: that that's that's on the head of the executive branch. 856 00:47:07,360 --> 00:47:09,200 Speaker 1: That's on the head of the President and Treasury Secretary, 857 00:47:09,280 --> 00:47:13,160 Speaker 1: not on them. And this isn't Paul Volker breaking the 858 00:47:13,160 --> 00:47:16,240 Speaker 1: back of inflation and standing up to those dastardly unions. 859 00:47:16,840 --> 00:47:20,000 Speaker 1: This would be the Federal Reserve Chair telling the President 860 00:47:20,440 --> 00:47:23,120 Speaker 1: that they are going to force a default on the 861 00:47:23,160 --> 00:47:26,040 Speaker 1: government debt in a way that is in violation of 862 00:47:26,080 --> 00:47:30,319 Speaker 1: the Fourteenth Amendment. And I think again, it's easy for 863 00:47:30,320 --> 00:47:32,560 Speaker 1: the FED to say it would even entertain that thought 864 00:47:32,600 --> 00:47:36,399 Speaker 1: now when it's a it's a speculative fiction, speculative hypothesis. 865 00:47:36,440 --> 00:47:40,000 Speaker 1: I think if the full force of the President's office 866 00:47:40,440 --> 00:47:43,640 Speaker 1: in that crunch moment were to come down that way, 867 00:47:44,640 --> 00:47:48,600 Speaker 1: you would be suicidal from an institutional preservation standpoint to 868 00:47:48,800 --> 00:47:52,239 Speaker 1: get in the way, as the FED. M I have 869 00:47:52,320 --> 00:47:56,160 Speaker 1: one more big picture question, which is, you know, you 870 00:47:56,239 --> 00:47:59,640 Speaker 1: described this as a dumb solution to a dumb problem, 871 00:47:59,800 --> 00:48:03,600 Speaker 1: and I guess I'm wondering if the idea of solving 872 00:48:03,800 --> 00:48:09,720 Speaker 1: absurdity with more absurdity, if that kind of poses a risk, 873 00:48:09,880 --> 00:48:12,319 Speaker 1: or if there's a slippery slope there, And you know, 874 00:48:12,360 --> 00:48:15,440 Speaker 1: again with your legal expertise up, I'd be curious to 875 00:48:15,440 --> 00:48:17,520 Speaker 1: get your thoughts on this. But one of the criticisms 876 00:48:18,000 --> 00:48:21,640 Speaker 1: of the Trump administration was that they ignored all these 877 00:48:21,680 --> 00:48:25,400 Speaker 1: previously established norms and what they were doing might not 878 00:48:25,520 --> 00:48:29,840 Speaker 1: necessarily technically be illegal, but it certainly wasn't the way 879 00:48:29,920 --> 00:48:32,920 Speaker 1: that the founding fathers of America had thought that UM 880 00:48:33,160 --> 00:48:35,719 Speaker 1: laws and rules and things like that would be applied. 881 00:48:36,160 --> 00:48:40,799 Speaker 1: So again, like I'm curious the platinum coin discussion. Yes, 882 00:48:40,920 --> 00:48:43,799 Speaker 1: it might be legal, but I don't think anyone who 883 00:48:43,960 --> 00:48:46,880 Speaker 1: set up the laws around minting coins generally, as you 884 00:48:46,960 --> 00:48:50,000 Speaker 1: laid out earlier, was necessarily thinking that this was a 885 00:48:50,040 --> 00:48:54,840 Speaker 1: way to solve restrictions on the government budget. So I 886 00:48:54,880 --> 00:48:57,080 Speaker 1: don't know. I guess the question is, like, does this 887 00:48:57,200 --> 00:49:00,960 Speaker 1: open the door to having a regime where you know, 888 00:49:00,960 --> 00:49:06,080 Speaker 1: whoever can come up with the most technical, absurdist accounting 889 00:49:06,200 --> 00:49:08,920 Speaker 1: loophole kind of wins the day, and you know, maybe 890 00:49:08,960 --> 00:49:11,960 Speaker 1: this gets undone in four years time when someone else 891 00:49:12,000 --> 00:49:15,400 Speaker 1: comes up with like a new way to apply restrictions 892 00:49:15,400 --> 00:49:20,120 Speaker 1: on debt or minting coinage or something like that. I 893 00:49:20,160 --> 00:49:22,479 Speaker 1: forget which economist it was who famously said it takes 894 00:49:22,480 --> 00:49:25,000 Speaker 1: a theory to be a theory, but one way to 895 00:49:25,040 --> 00:49:27,239 Speaker 1: think about the coin. And we talked about this on 896 00:49:27,320 --> 00:49:29,480 Speaker 1: this other podcast, Money on the Left with the a 897 00:49:29,520 --> 00:49:32,040 Speaker 1: podcast with Nathan Tankas and I about the coin a 898 00:49:32,080 --> 00:49:34,640 Speaker 1: few years ago. Um, if we take out the word 899 00:49:34,680 --> 00:49:38,360 Speaker 1: theater and we replace the word ritual, then it starts 900 00:49:38,400 --> 00:49:40,440 Speaker 1: to sound a little bit less crazy. And one of 901 00:49:40,480 --> 00:49:42,359 Speaker 1: the reasons I love the coin is someone that used 902 00:49:42,360 --> 00:49:45,040 Speaker 1: to be an elementary school teacher. Is it's something kids 903 00:49:45,080 --> 00:49:49,560 Speaker 1: can understand. It isn't this hyper wonky technical treasury debt auction, 904 00:49:49,640 --> 00:49:52,920 Speaker 1: eleventh dimensional chess bond holders and all these steps that 905 00:49:53,000 --> 00:49:56,000 Speaker 1: nobody can understand, which to me has a tinge of 906 00:49:56,400 --> 00:50:01,000 Speaker 1: anti democratic, technocratic elitism. That we stamp a coin the 907 00:50:01,040 --> 00:50:03,080 Speaker 1: coin has the face of dead presidents and it's worth 908 00:50:03,120 --> 00:50:04,640 Speaker 1: as much as we say it is because that's what 909 00:50:04,680 --> 00:50:06,880 Speaker 1: the law says. Is something I can teach to a 910 00:50:06,880 --> 00:50:09,280 Speaker 1: seven year old and it has the benefit of being true. 911 00:50:09,680 --> 00:50:12,360 Speaker 1: If we do have to replace the ritual we have 912 00:50:12,440 --> 00:50:15,600 Speaker 1: today with another ritual, then you know, putting putting the 913 00:50:15,640 --> 00:50:17,560 Speaker 1: coin in the hand of a five year old calling 914 00:50:17,560 --> 00:50:19,680 Speaker 1: the future of America and walking it from the mint 915 00:50:19,680 --> 00:50:23,399 Speaker 1: to the Fed maybe is a better symbol for one 916 00:50:23,520 --> 00:50:28,440 Speaker 1: century fiscal politics than you know, the primary dealer system 917 00:50:28,480 --> 00:50:31,359 Speaker 1: and the Federal Reserve backing up the secondary market with 918 00:50:31,480 --> 00:50:34,800 Speaker 1: repo and reverse repo operations and things. Um, that's a 919 00:50:34,920 --> 00:50:39,320 Speaker 1: very kind of Larry Summer's deregulation of derivative metaphor to me. 920 00:50:40,160 --> 00:50:42,640 Speaker 1: And of course we're at a point in history when 921 00:50:43,440 --> 00:50:45,840 Speaker 1: a huge amount of the public is being introduced to 922 00:50:46,000 --> 00:50:51,759 Speaker 1: monetary politics through the metaphor of digital coins, right, one 923 00:50:51,760 --> 00:50:55,279 Speaker 1: of other Joe's one of his other you know campaigns 924 00:50:55,280 --> 00:50:57,640 Speaker 1: around doge coin. You know, we we meet, we create 925 00:50:57,760 --> 00:51:00,400 Speaker 1: coins all the time. Now, this idea of coinage been 926 00:51:00,520 --> 00:51:03,920 Speaker 1: kind of forgotten, was true twenty years ago and increasingly 927 00:51:03,960 --> 00:51:06,560 Speaker 1: less so now, not because the government has revived coinage, 928 00:51:06,560 --> 00:51:10,719 Speaker 1: but because private actors using cryptographic techniques of revived coinage. So, 929 00:51:11,239 --> 00:51:12,840 Speaker 1: you know, one of the things I in my paper 930 00:51:12,880 --> 00:51:15,360 Speaker 1: on is maybe we should have a kind of you know, 931 00:51:16,040 --> 00:51:19,799 Speaker 1: resurrection of of coinage and re centering of the mint 932 00:51:19,840 --> 00:51:21,680 Speaker 1: in our fiscal politics as a way to kind of 933 00:51:21,680 --> 00:51:24,839 Speaker 1: reset the board and make things no more complicated than 934 00:51:24,880 --> 00:51:27,279 Speaker 1: they need to be so that average people can get 935 00:51:27,320 --> 00:51:30,680 Speaker 1: in on the game. Sociologist Jacob Finding, a friend of mine, 936 00:51:30,680 --> 00:51:32,680 Speaker 1: has this great line that he uses this great term 937 00:51:32,680 --> 00:51:35,759 Speaker 1: which he calls monetary silencing, and he says, whether it 938 00:51:35,920 --> 00:51:39,799 Speaker 1: was the Founding father Revolutionary era, or Andrew Jackson and 939 00:51:39,800 --> 00:51:42,160 Speaker 1: the Bank of the United States, or Lincoln and the 940 00:51:42,200 --> 00:51:45,560 Speaker 1: green Backs, or William Jennings Bryan and the populists, or 941 00:51:45,840 --> 00:51:48,640 Speaker 1: you know, Wilson and the Federal Reserve or f DR 942 00:51:48,840 --> 00:51:52,120 Speaker 1: and the floating of the dollar, or Nixon and the 943 00:51:52,120 --> 00:51:55,120 Speaker 1: floating of the dollar. That monetary politics have been at 944 00:51:55,160 --> 00:51:58,600 Speaker 1: the center of the American political experiment since the start, 945 00:51:59,040 --> 00:52:01,879 Speaker 1: and we go in way eaves where monetary issues sort 946 00:52:01,880 --> 00:52:04,960 Speaker 1: of come to the forefront and then recede back and 947 00:52:05,040 --> 00:52:08,200 Speaker 1: come to the forefront and recede back. Um. And this 948 00:52:08,280 --> 00:52:11,160 Speaker 1: is a moment where whether it's crypto on one hand, 949 00:52:11,239 --> 00:52:14,000 Speaker 1: or central bank digital currencies or this debt ceiling crisis, 950 00:52:14,080 --> 00:52:17,839 Speaker 1: that monetary politics are coming back to the forefront. And 951 00:52:17,840 --> 00:52:19,560 Speaker 1: and one way we can do that is with a 952 00:52:19,600 --> 00:52:22,719 Speaker 1: form of monetary silencing where we tell average people this 953 00:52:22,760 --> 00:52:25,279 Speaker 1: stuff is all too complicated for you. You're dumb, you 954 00:52:25,320 --> 00:52:28,080 Speaker 1: shouldn't understand this stuff. This is for people who are 955 00:52:28,080 --> 00:52:32,439 Speaker 1: smart and who have degrees in finance and economics and macroeconomics, um. 956 00:52:32,520 --> 00:52:34,759 Speaker 1: And we tell average people that this is not a 957 00:52:34,800 --> 00:52:38,440 Speaker 1: space for them to have opinions, or we try to 958 00:52:38,440 --> 00:52:40,720 Speaker 1: make it accessible to people. We try to tell stories 959 00:52:40,760 --> 00:52:44,560 Speaker 1: and build institutions that you can understand, like people carry 960 00:52:44,560 --> 00:52:47,880 Speaker 1: a pocket constitution around. And I think that's that's the 961 00:52:48,480 --> 00:52:53,880 Speaker 1: pedagogical and symbolic and ritualistic element of the coin. And 962 00:52:53,920 --> 00:52:55,920 Speaker 1: in my opinion, now it's no more silly than judges 963 00:52:55,920 --> 00:53:01,080 Speaker 1: wearing robes rolland there a great place to leave it. 964 00:53:01,200 --> 00:53:03,600 Speaker 1: And you know, I said at the beginning that I 965 00:53:03,800 --> 00:53:06,880 Speaker 1: was a fan of believer in the coin of Solution, 966 00:53:07,120 --> 00:53:11,400 Speaker 1: and I am even more so by a high degree 967 00:53:11,440 --> 00:53:14,960 Speaker 1: of believer in the coin solution after talking to Thank 968 00:53:15,000 --> 00:53:17,080 Speaker 1: you so much for coming on, od Love, Thank you 969 00:53:17,080 --> 00:53:19,200 Speaker 1: so much for having me as a pleasure. Thanks Ron, 970 00:53:19,239 --> 00:53:31,520 Speaker 1: that was really good. All right, So are you a 971 00:53:31,520 --> 00:53:38,000 Speaker 1: coiner now? I am maintaining my journalistic integrity by not 972 00:53:38,120 --> 00:53:43,400 Speaker 1: taking sides and continuing to monitor and describe and write 973 00:53:43,400 --> 00:53:45,799 Speaker 1: and think about this in a neutral way. That's a 974 00:53:45,840 --> 00:53:49,799 Speaker 1: total cop out question, but it Ruined laid out a 975 00:53:50,000 --> 00:53:55,200 Speaker 1: really rational explanation of how this would work, why you 976 00:53:55,239 --> 00:53:58,000 Speaker 1: would do it UM, And I think his is probably 977 00:53:58,120 --> 00:54:01,680 Speaker 1: like the most convincing explain nation that I've heard UM 978 00:54:01,719 --> 00:54:04,120 Speaker 1: over the past ten years or so. But on the 979 00:54:04,120 --> 00:54:07,480 Speaker 1: other hand, part of me is just screaming inside that, like, 980 00:54:08,360 --> 00:54:11,799 Speaker 1: there must be another way and why can't we just 981 00:54:11,840 --> 00:54:15,640 Speaker 1: do this like normal people rather than go down a 982 00:54:15,800 --> 00:54:18,719 Speaker 1: route that you know, I know it's serious now, and 983 00:54:18,760 --> 00:54:22,759 Speaker 1: I know it was grounded in serious UM discussions and 984 00:54:22,880 --> 00:54:25,440 Speaker 1: thinking about MMT in the nature of debt, But I 985 00:54:25,800 --> 00:54:28,279 Speaker 1: really don't think it's started in a serious manner, and 986 00:54:28,360 --> 00:54:31,680 Speaker 1: I'm not entirely sure people thought or intended it to 987 00:54:31,719 --> 00:54:34,759 Speaker 1: get this far. And yet, nevertheless, because of everything that's 988 00:54:34,800 --> 00:54:38,560 Speaker 1: happened in recent times, here we are talking about a 989 00:54:38,600 --> 00:54:42,920 Speaker 1: trillion dollar platinum coin being the solution to politicians in 990 00:54:43,000 --> 00:54:45,800 Speaker 1: d C not being able to get their act together 991 00:54:46,080 --> 00:54:49,160 Speaker 1: and play ball in a fair way in order to 992 00:54:49,480 --> 00:54:52,040 Speaker 1: you know, benefit all of the United States. It's all, 993 00:54:52,200 --> 00:54:55,799 Speaker 1: it's all crazy, and I kind of hate it. So, 994 00:54:55,960 --> 00:54:58,320 Speaker 1: I mean, obviously, like I said, it was found it 995 00:54:58,440 --> 00:55:01,600 Speaker 1: very convincing. But what beyond that, Like, what I really 996 00:55:01,640 --> 00:55:09,040 Speaker 1: found extremely compelling was Okay, yes, the coin is silly, 997 00:55:09,280 --> 00:55:12,759 Speaker 1: it's weird. You know, we all sort of agree with that. 998 00:55:13,160 --> 00:55:19,120 Speaker 1: But actually the number of serious ideas that Rowan brought 999 00:55:19,239 --> 00:55:23,320 Speaker 1: up there, sort of like bolster the legal and philosophical case, 1000 00:55:23,640 --> 00:55:26,640 Speaker 1: I was like truly impressed by that and thinking about, 1001 00:55:27,160 --> 00:55:29,759 Speaker 1: you know, the fact that although it's much smaller, that 1002 00:55:29,880 --> 00:55:34,680 Speaker 1: the mint is a source of senior revenue for the Treasury, 1003 00:55:34,840 --> 00:55:38,239 Speaker 1: or thinking about these sort of like institutional relationships. He 1004 00:55:38,280 --> 00:55:40,920 Speaker 1: put it at the end, you know, why can't we 1005 00:55:41,040 --> 00:55:44,759 Speaker 1: change the rituals to make the more accessible somehow in 1006 00:55:44,840 --> 00:55:49,759 Speaker 1: the coin conversation there is actually just like really profound 1007 00:55:50,080 --> 00:55:56,040 Speaker 1: and important uh questions that gets sussed out from having it, 1008 00:55:56,120 --> 00:55:58,200 Speaker 1: and so I was I was really happy to hear 1009 00:55:58,200 --> 00:56:02,640 Speaker 1: them fleshed out. Well, this was your initial framing of 1010 00:56:02,760 --> 00:56:04,719 Speaker 1: the coin debate. I think you said it was like 1011 00:56:04,840 --> 00:56:09,439 Speaker 1: the most important UM fiscal policy discussion ever UM, which 1012 00:56:09,480 --> 00:56:12,120 Speaker 1: a lot of people thought was hyperbole, But your point 1013 00:56:12,200 --> 00:56:15,960 Speaker 1: was because the discussion was about the nature of money. 1014 00:56:16,080 --> 00:56:18,600 Speaker 1: And again that's something that that Rohan talked about, and 1015 00:56:18,600 --> 00:56:21,000 Speaker 1: it's one of the reasons I asked him about what 1016 00:56:21,080 --> 00:56:24,480 Speaker 1: he thought the public reaction might look like. I have 1017 00:56:24,560 --> 00:56:26,640 Speaker 1: to say, like, maybe I spend too much time on 1018 00:56:26,680 --> 00:56:30,120 Speaker 1: social media, but Rohan probably is a lot more optimistic 1019 00:56:30,160 --> 00:56:34,000 Speaker 1: about how people would react to this, or the ability 1020 00:56:34,000 --> 00:56:37,360 Speaker 1: of people to sort of think logically and rationally about 1021 00:56:37,360 --> 00:56:41,359 Speaker 1: it UM than some other people might be. But it's 1022 00:56:41,360 --> 00:56:43,880 Speaker 1: an interesting experiment and like it's definitely one of the 1023 00:56:43,920 --> 00:56:47,480 Speaker 1: more interesting discussions that we've had in a while. Well, 1024 00:56:47,840 --> 00:56:49,960 Speaker 1: I guess hopefully, I don't know, I really want to 1025 00:56:50,000 --> 00:56:53,360 Speaker 1: see it happened. Other people would say, yeah, this is 1026 00:56:53,360 --> 00:56:56,160 Speaker 1: the thing, Like can you hope for it to happen like, 1027 00:56:56,280 --> 00:56:59,799 Speaker 1: because then that means that, okay, all right, yes, I 1028 00:57:00,320 --> 00:57:02,480 Speaker 1: to see it happened all right. Well, you know, by 1029 00:57:02,480 --> 00:57:04,600 Speaker 1: the end of the month you might have your answers. 1030 00:57:04,600 --> 00:57:06,000 Speaker 1: So I guess the good news is you don't have 1031 00:57:06,040 --> 00:57:09,200 Speaker 1: to wait too long. Should we leave it there? Yeah, 1032 00:57:09,280 --> 00:57:12,360 Speaker 1: let's leave it there. Um. This has been another episode 1033 00:57:12,400 --> 00:57:15,080 Speaker 1: of the All Lots Podcast. I'm Tracy Alloway. You can 1034 00:57:15,080 --> 00:57:19,240 Speaker 1: follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthal. 1035 00:57:19,280 --> 00:57:22,480 Speaker 1: You can follow me on Twitter at the Stalwart. Follow 1036 00:57:22,520 --> 00:57:26,080 Speaker 1: our guest on Twitter, Rowan Gray. He's at Rowan Gray, 1037 00:57:26,200 --> 00:57:29,400 Speaker 1: and you should definitely check out the paper that he 1038 00:57:29,440 --> 00:57:34,600 Speaker 1: has written on the subject, extremely thorough, very clear. Follow 1039 00:57:34,640 --> 00:57:38,480 Speaker 1: our producer on Twitter, Laura Carlson. She's at Laura M. Carlson. 1040 00:57:38,880 --> 00:57:43,040 Speaker 1: Followed the Bloomberg head of podcast Francesca Leavi at Francesco Today, 1041 00:57:43,400 --> 00:57:46,680 Speaker 1: and check out all of our podcasts at Bloomberg under 1042 00:57:46,720 --> 00:58:14,080 Speaker 1: the handle at podcasts. Thanks for listening to