Stone Knives and Bear Skins, Anyone?

[filkertom]

Perhaps you've heard of the proposal to mint a trillion-dollar coin to take care of the debt ceiling woes. (Click here for a more detailed discussion.)

No matter which side of that proposal you are on, I think you'll find this (from Steve Benen at the Maddow Blog) really, really worrisome:

This morning, the [National Republican Campaign Committee] argued, apparently in all seriousness, "The amount of platinum needed to mint a coin worth $1 trillion would sink the Titanic." To help drive home the point, the campaign committee even created an image of a President Obama platinum coin weighing down the Titanic.

Making matters slightly worse, the NRCC says the coin would "pay for [Obama's] spending," which suggests Republicans still don't understand that the White House cannot legally spend money that hasn't already been approved by Congress.

But even putting that aside, the problem with the image and initial argument is that the NRCC appears to have forgotten how money works. A $20 bill does not have $20 worth of paper. Indeed, the paper and fibers that go into a $50 bill do not have five times the value of a $10 bill. And as such, a $1 trillion coin would not need $1 trillion worth of platinum.

For a number of years now, one of the most pressing currency issues has been whether we should stop making pennies, as they are literally worth less than the metal made to create them.

A ten dollar bill weighs exactly the same as a hundred dollar bill, except for that extra zero, which adds nothing and yet multiplies by ten. (Or somethin'.)

We have currency precisely so we don't have to lug around hunks of metal, or anything else.

How about a credit card with a value of $1 trillion?

I see where the NRCC is trying to make a symbolic point... but, for cryin' out loud, if they don't know the basic rules of how an economy based on currency works, how can they possibly have any credibility at all on policy?

Comments

[wednes]

This is an exceptional post. May I share it?

[filkertom]

Why, thank you. :) And, of course.

[yanagi_wa]

I had a somewhat similar conversation with my Step-daughter. She wanted to know why the government didn't just print more money, since there's not enough. *sigh* What do they teach in school these days?

[batyatoon]

What I want to know is if they really are that stupid or just think the American people really are that stupid.