"Government For Sale, Going Cheap"
Get your two-bit congressman and his
military wares at half off, limited time only
By Bill Bonner
Dublin, Ireland - "Last week, the stupidity of smart people was on display. But as failure often leads to success, youth leads to old age, and holding up liquor stores leads to jail time…so do bad ideas sometimes lead to good ones. Today, we offer a solution to the ‘debt ceiling’ shenanigans. Note to McCarthy, McConnell et al – no need to send thanks.
We begin with the weekend news. CNN: "Jack Lew: We are weeks away from a potential financial disaster. Congress must act now to extend the debt ceiling to clear the path for fiscal negotiations and to avoid default, a self-inflicted wound that would hurt our economy, burden hard-working Americans and damage our influence internationally."
The Establishment is giving the Debt Ceiling a full court press. Janet Yellen: "If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests..” Really? Our ‘national security’ would be put at risk by not borrowing more money? We already owe $33 trillion. Isn’t that enough? Apparently not.
Moronic Economics: Stupidity is our daily fare. The news is full of it. But so often are we mired in mere mediocrity…surrounded by commonplace knuckleheads – it was refreshing to see genuine, Full Retard Imbecility on display. And from a Nobel Prize winner no less. We speak of Paul Krugman, lead economist at The New York Times…and a moron.
Markets Insider: "A $1 trillion platinum coin could prevent the US government from defaulting on its debt without making inflation worse, according to Nobel laureate Paul Krugman. The idea behind the coin is for the Treasury to use its authority to mint platinum coins and create one with a face value of $1 trillion that gets deposited at a Federal Reserve account to pay bills while lawmakers remain deadlocked on lifting the debt ceiling." The Fed could simply ‘print up’ a trillion paper bucks and put them in the Treasury’s account. But that would obviously increase the money supply and therefore be ‘inflationary.’
A Public Scam: Krugman imagines that there is some magic about a palladium coin….that somehow, it defies the basic laws of the monetary universe. So, let’s think about this. “Inflation” means adding to the money supply…such that, later, consumer prices rise. This is the ‘natural order’ of things. That’s the way it works. Just like adding wood to a fire makes it burn hotter…and eating more makes you fatter.
What has Krugman been watching, we wonder? What bread doth he eat? What air doth he breathe? He thinks he can outsmart the natural order of things. But how?
A one-trillion dollar palladium coin would not add to the world’s money supply, for example…but only if it were really worth $1 trillion. But that would defeat the purpose. If the feds had $1 trillion to buy a $1 trillion palladium coin, they wouldn’t need the coin. Instead, they need the coin because they don’t have $1 trillion. So they create a coin, stamp it with ‘$1 trillion’…and perhaps add “In God We Trust” just to make it sound like the Almighty is behind the deal. The idea is to make people think it is somehow worth $1 trillion…even though it’s not. The whole idea is to scam the public, in other words.
Just to make it easier for us to understand… forget the coin. Let’s just say the feds could deposit one trillion worth of palladium in the Treasury. At today’s prices, that would be about 1,024 billion ounces of palladium. But according to the LBMA there are only about 20 million ounces of palladium in existence. Which is why it is valuable; it’s rare. The US Treasury could neither find that much palladium, nor afford to pay for it. So that won’t work.
Krugman’s plan is, of course, not to mint a coin worth $1 trillion…but simply to mint a coin and say it is worth $1 trillion. Obviously, the difference between its actual palladium content and the $1 trillion price tag is ‘money’ that didn’t exist previously…and never will really exist. It is fake money, in other words; it is as if the Fed were inviting you to sit down on a chair that isn’t there. Go ahead. Have a seat. You will fall to the ground and we will laugh. The idea is just too dumb to take seriously. It makes us wonder not only about Krugman’s professional expertise…but about his sanity.
Cash Strapped Feds: But wait…don’t worry about the inflationary impact, said the Great Man on Twitter last week. “The Fed would surely sterilize any impact on the monetary base by selling off some of its huge portfolio of US debt," he said.
Holy schmoley. Now he’s on to something. Krugman is imagining a slick move… in which the Fed trades long term assets (bonds) for short-term assets (cash). Then, it uses the cash to pay the federales’ bills. We will pass over the obvious flaw – the Fed’s T-bonds are a liability to the federal government, not an asset. They are an asset to the Fed and would have to be purchased from the Fed before they could be sold – obviously, a waste of time.
But maybe we’re missing something. In any case, the federal government does own lots of real, non-performing assets, which could be off-loaded for cash. What do other people do when they run out of cash? They have a yard sale.
So, here’s the idea – the largest yard sale in history. Sell some tanks. A few battleships. Think of all the jeeps…back-hoes…and nuclear missile silos that could be auctioned off. And there’s Yosemite! Think of all the surplus…superfluous…and super-duper stuff that the feds could let go.
On the Block: There’s really no need to raise the debt ceiling, not as long as the feds have something to sell. And they’ve got a lot. Why not dispose of those 800 military bases overseas…? They serve no purpose. And there are as many as 500 military bases in the 50 states….surely we could get by with half as many.
According to the GSA, the feds have 645,000 vehicles, many of them owned by the Post Office. There’s some easy money right there. Most of the ‘mail’ has moved to the electronic genre. And private companies – such as Fedex and UPS– are willing to deliver the rest. And there’s AMTRAK. Why not sell off these losing enterprises, raise some cash and reduce annual expenses?
The US government also holds title to more than 600 million acres of land in the US – nearly 30% of the entire country. That ought to be worth something. Auction it off. Even at just $2,000 an acre…the nation’s available cash would rise by $1.2 trillion.
So here we have our solution. Hold a ‘zoom auction.’ What fun it would be. Putting out for bids all the bad investments, overbought, and misguided acquisitions of a spendthrift Congress. Would you like to buy an F-15 fighter, dear reader? How about a two-seater “Eagle?” Take your main squeeze for a spin at nearly 2,000 mph. Impress the neighbors with a ‘vertical’ takeoff. This would be your chance. Or, how about something more practical – the Department of Education headquarters at 4th and C SW, District of Columbia? Or how about the Mary E. Switzer building on C St. SW? We don’t know what they do there…but it probably wouldn’t be missed.
The list of assets goes on and on – more than enough to replenish the feds’ coffers…Just put it up for auction. And make sure you translate everything for Chinese bidders."
If anyone needs further explanation about Krugman logical limitations, there’s no need for palladium. Since the coin would be nowhere near a trillion dollars in real value, any kind of fiat medium would do. A printed bill with a face value of a trillion dollars would do just as well. I suggest a portrait of Professor Irwin Corey as the notable to grace the bill to be printed on Charmin’s finest product.
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