Ron Paul: Krugman’s $1 trillion coin idea “just another variant of the endless stimulus proposals’
As many of you know, the liberal, Keynesian sage, Paul Krugman introduced the idea of a $1 trillion platinum coin be minted and as Krugman suggests, then depositing it at the Fed. This would allow the Treasury to acquire enough cash to sidestep the debt ceiling — “while doing no economic harm at all.”
The idea is so foolish that Krugman even took a beating from none other than Comedy Central’s Jon Stewart. The comedic critique bothered the Nobel Laureate so much that he wrote in an op-ed that Stewart, a comedian, was lazy and unprofessional.
On Monday, retired Congressman Dr. Ron Paul also responded to the the Krugman coin idea.
“To be fair, Mr. Krugman acknowledges that minting such a coin would be an accounting “trick,” but he is dead serious about this option for the Obama administration. This then is the state of modern economics discourse in America, where a respected New York Times economist literally can propose creating “money for nothing” and have the idea taken seriously.
“Krugman’s suggestion is just another variant of the endless stimulus proposals, which purport to create greater aggregate demand in the economy by creating more money. Whether this is done by the Fed or the Treasury is of little importance, as long as government is creating demand-side “growth,” however artificial.”
Quoting Austrian economist, Hans-Hermann Hoppe, Dr. Paul notes, “If governments or central banks really can create wealth simply by creating money, why does poverty exist anywhere on earth? Why haven’t successive rounds of quantitative easing by the US Fed solved our economic recession? And if Fed money creation really works, and doesn’t create inflation, why haven’t Americans gotten richer as the money supply has grown?”
It all boils down to one simple phrase–Fiat currency is not wealth.