The Trillion Dollar Coin
“‘It’s pretty wild,’ Mr. Weisenthal said of his campaign’s success, saying the point was to expose the ‘absurdity’ of the debt ceiling debate in the first place. ‘If you think the trillion-dollar coin is silly, you should think the debate over whether a rich country would fail to pay its bills is silly.’”
The reason that money and religion provide so much fodder for crazy theories is because they are at one and the same time so fundamentally important and so unknowably abstract. They are the sand that we erect our biggest edifices on.
In some ways, money is even more mysterious than God. Nonbelievers and believers alike are wary of cultists and false prophets; even religious fanatics purport to know what God isn’t. But if someone tells us something nutty-sounding about money, we need all sorts of other context before we can tell whether they’re a crank or the president of a bank, the Speaker of the House, or the Secretary of the Treasury.
Look at anything closely enough and it turns out you can’t understand it. Samuel Johnson famously kicked a boulder to refute Berkeley’s idealism–but when you examine that same boulder on a quantum level, it turns out to be even more contingent than Berkeley could have imagined. Berkeley never denied that a rock was a rock, after all; he just said you can’t know it objectively. Quantum physics reduces that same boulder to random motions of particles and waves.
Money by definition is a standard of value, but monetary value is no less volatile than a cloud of quarks. And when you look at money really closely, it turns out to exist only because someone says it does. A Confederate dollar can only buy you something as long as there’s a Confederacy (and Confederate merchants trust its specie). This is as true for gold and silver as it is for paper and promises.
As a token of value, a trillion dollar coin is no more or less meaningful than a paper dollar or a $100 gold piece you might purchase from Glenn Beck’s Goldline. As a political gambit, it might or might not have real weight. But it’s also turning out to be something of a touchstone, in that it exposes how little some politicians, particularly of the Republican persuasion, seem to know about economics. The quote that opens this post comes from Ann Lowrey’s piece in yesterday’s New York Times, A Trillion Dollar Coin Brings a Jackpot of Jests. She also quoted Congressman Greg Walden.
“Greg Walden, Republican of Oregon…said he would introduce legislation to close the loophole and end the debate once and for all.
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air,” Mr. Walden said.
But Greg Walden and his wife aren’t a sovereign government. You’d think a Congressperson would know the difference between a household, a business, and a state.
“The National Republican Congressional Committee, which mocked up a fake trillion-dollar coin with President Obama’s face on it, noted the absurdity of the idea by saying that the amount of platinum it would take to mint a trillion-dollar coin would sink the Titanic.”
If a substance like platinum had a constant value, then we wouldn’t be having this conversation, would we?
And these are the people who say that returning us to the gold standard will fix all our problems. At least I have the wisdom to know that I’m an economic ignoramus.