I had a little fun at the National Republican Campaign Committee's expense the other day, when the NRCC mistakenly argued that a $1 trillion platinum coin would necessarily need $1 trillion worth of platinum. That didn't make any sense; the NRCC became the butt of jokes for a few hours; and the political world got a nice little lesson on how money works.
Everyone, that is, except the folks at Fox News, who yesterday made the exact same mistake.
Jed Lewison flagged this Fox report, which effectively took the Republican error from Wednesday and turned it into a broadcast error on Thursday. As the network sees it, a $1 trillion platinum coin would weigh nearly 18,000 tons, you know, because of all that platinum.
In a way, this offers another helpful example of epistemic closure on the right -- the NRCC's error generated widespread mockery, but primarily among those who understand the basics of the debt-ceiling fight. In other words, those who pointed to the Republicans' error are the kind of folks Fox News routinely ignores, so the network had no idea that the NRCC stunt was a fiasco.
Which is exactly why Fox had no qualms about running with it on the air, just as the Republican campaign committee probably intended. The network didn't realize it was wrong, and doesn't listen to those who would have explained it to them.
That said, for the record, the argument Fox News pushed yesterday only makes sense among those who don't understand how money works.
Matt Yglesias had a good overview of Currency 101.
In my wallet right now I have a bunch of $20 bills, a few $1 bills, and a $5 bill. These bills are worth different amounts of money due to the fact that they have different numerals written on them. In terms of their actual contents, there's very little difference but a $20 bill is much more valuable than a $1 bill just because. By the same token, if you write a check for $20,000 it doesn't need to be physically different from a $200 check except for having different numerals written on it.
Coins are the same. Dimes are more valuable than nickels even though they're smaller. It is true that several hundred years ago the value of a coin was driven by its metallic content, but this hasn't been the case for a long time.... If you think about it for a second you'll see that it basically has to be this way. Quarters and pennies and dimes and nickels all have different metallic content. Since the relative prices of different commodities fluctuates on a daily basis, if the value of coins were based on the value of the metal they contain then the relative value of different coins would be constantly shifting. You'd have to fire up your Bloomberg machine every morning to see how much money the coins in your pocket are worth. That'd be nuts, which is why they write numbers on the coins.
The fact that Republicans and their media allies fail to understand this is, to put it mildly, discouraging.
How do we know a $10 bill is worth $10 or a quarter is worth 25 cents? It's not because there's $10 worth of paper in the former or 25 cents worth of metal in the latter. It's because the government of the United States created the currency, assigned it a value, and everyone, around the globe, accepts the value as legitimate.
If the United States government chose to create a $1 trillion platinum coin, the same would be true.
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When I see stories like these, I often wonder: is it ignorance, or malice? Do they put this garbage on the air because they don't realize it's false, or are they just hoping enough people won't check their facts that whether it's true doesn't actually matter?
Conservatives live in a bubble of total unreality, plus they are incapable of independent thought. Google Right Wing Authoritarian Personality Type to get a better understanding.
The election results were a perfect example of this. Ignore everything that doesn't comply with your reality, then get totally dumbfounded when 'reality hits you hard, Bro!' It's not only amazing, it's also very sad.
Misinformation ! It's job #1
Always worth a revisit Wyatt and Oliver @ 5:50
The Daily Show Debates: Is Fox News Evil Or Stupid?
http://tpmlivewire.talkingpointsmemo.com/2010/08/the-daily-show-debates-is-fox-news-evil-or-stupid-video.php
Remember the old adage of show business: Play to your audience
and like David Frum said this is the conservative entertainment complex, and they are playing to the lowest common denominator in American culture.
Smart Vs. Stupid
Yes, conservatives are really, really, stupid. They actually think that if Treasury is going to print a trillion dollars, there would be something worth a trillion dollars to back it. How foolish, yes?
Yes, they were too stupid to realize counterfeiting is now acceptable. Or that you could pick up a dog turd and declare it worth a trillion dollars, and then print the money. How foolish these Republicans are... because no matter what idiocy Democrats propose It's OK I you're A Democrat (IOKIYAD)
No, not stupid. They have an agenda. And everything must conform to it.
Ok if he isn't going to mint a coin he can still just invoke the 14th amendment...
I know the said they wouldn't but It's worth noting that the right is still reserved to the office...
One way or another this is money Congress decided to spend. These are bills the American people decided we needed to pay and that needs to be done. I don't care if they decide to pay it in chickens as long as it gets done
@Day
Oh yeah forgot the whole anti-FDR revisionist history thing...I should have said "The Smart (and Evil) manipulating the Stupid (and Crazy) for the benefit of the powerful (and Greedy). Think of the profits from rewriting the text books alone...
Sadly, you missed the whole point of this article. If they were talking about having the trillion in the treasury to back their coin, then you would be correct sir. However, they are not. They are talking about how it was presented as having a trillion dollars worth of platinum in the actual coin, which is not how it works, hence the stupidity of fox news running a "news story" on the subject.
Once again Blankman do you understand the phrase "reading for comprehension" - it means that you read to understand (even if you must read it 10x). If the words are too big or the topic a bit complex break down those parts and research what's confusing you. Reading is supposed to expand your mind and open it up, not dealing with reality and continuing to cling to illogical ideology, is so NOT healthy..
Thank you Shooter for stating "conservatives are really really stupid".... and then confirming it. You're talking about a different thing, and don't even know it. Bravo!
Thanks Shooter ; I'll go for the trillion dollar Turd . It would be oh so appropriate as we are ...oh I don't know , paying for the stuff congress already bought.
When I see stories like these, it reminds me that there's enough willful ignorance to go around on all sides.
The very fact that the right is willing to talk about the trillion dollar coin should be enough for the left to drop the idea and focus on the real issues at hand. You are just handing Fox and the Republicans a distraction because apparently it's more fun for you guys to snipe at each other than to try find common ground.
Shooter242: I doubt you'll reply to this, but backing currency with real assets is not the same as making it out of materials worth that intrinsic value. You want to argue that all currency should be backed by gold in a vault in Fort Knox, that's your prerogative - but that doesn't mean that a gold coin has to be worth exactly its weight in gold, or that a platinum coin has to be worth exactly its weight in platinum. Or that paper money gets its value from the paper it's printed on, for that matter.
Returning to a gold standard (platinum standard?) in a modern economy is a dumb idea but at least it's an actual argument; this "18,000 ton coin" crap is just a straw man to avoid discussing the merits or impact of the proposal. (Which, of course, Fox News has to do - if they actually discussed the real impact they'd be forced to conclude that, ridiculous as it may sound, it's better than the alternative of the nation defaulting on its debts.)
Yes to both.
I'm amused by the righteous indignation around paying the bills Congress approved. Nobody on the left is concerned about paying the debt they also have approved. $16.5 trillion will never be repaid, heck there won't even be an effort to pay back any of it. The last time that happened was half a century ago.
Just in case someone observes that bonds are redeemed all the time is missing the reality that your bond is being paid for with borrowed money. It works exactly like Maddoff's scheme. The money is borrowed/printed to pay previous lenders and the additional debt is tossed on the pile and immediately forgotten.
So the reality is... Democrats are the biggest deadbeats of all.
If you want to understand what's going on the GOP collective mind, you need only crack open your old high school copy of 1984:
He amplifies on this later:
I say it a lot: the most terrifying thing about the American right in the early 21st century is that they have voluntarily imposed upon themselves a system of thought that Orwell believed could only be imposed on the human mind through the creation of endemic fear of the arbitrary application of unlimited coercion by an all-seeing totalitarian police state.
DubbaEww
No, I'm not advocating a gold standard. I'm just pointing out that the average person, even Fox talking heads are making an understandable mistake. It's hard for the average person to wrap their head around the idea that Govt can just print money with nothing, not even a promise to pay it back.
So if you're going to just print the money, why not print enough to give everyone a million dollars, or just print $16 trillion and pay off the debt? That's the question everyone here should be asking, "what's in it for me?".
I may have suffered a loss of memory, but if I recall there was a period not too long ago where our nation ran a surplus 3 years in a row. We were on path to pay off our debt in under 10 years. If Bush The Younger (aka the worst president ever) had left it on autopilot we would have NO NATIONAL DEBT now.
So, Prior Dem Pres runs surplus. The Prior Rep Pres runs HUGE deficits, doubles national debt in 8 years. Next Dem President inherits a $1.4T deficit and 3 years later lowers it to $1.1T.
And that is bad how?
Sadly, the rest of the world doesn't operate on autopilot. First the market bubble burst, that had been the source of all the money Clinton got in tax receipts. Then we had 9/11. All without changing a thing from Clinton's time. As for relative deficit sizes here's an illustrative chart
http://captainscomments.com/images/Deficit-Obama-2012-years.png
Oh and the fiscal crisis, that's the Democrats fault. Google Robert Rubin.
This is extremely late for this thread, but I want to reply to Shooter's deficit graph for anyone stumbling upon this later. The truth of that graph is in the fine print: "Fiscal year ends Sept. 30." Policies enacted from before Obama took office - to the tune of 1.3 TRILLION dollars of the 1.4 on that graph - were the reason for the spike. Notice that every following year, the deficit has actually shrunk during Obama's term.
Also, the OMB estimate for 2012 is siginficantly out of date - the actual deficit for 2012 was about $200 billion lower than 2011.
Steve Benen actually covered this same information back in October:
http://maddowblog.msnbc.com/_news/2012/10/12/14399005-us-budget-deficit-shrinks-by-over-200-billion-reaches-4-year-low?lite
And so long as Faux news continues to report, well, faux news, then the Republican base will remain as woefully uninformed as they were during the election cycle.
That means that the Republicans will still have a problem with the disconnect between 'message' and 'delivery', and won't be able to adjust to the new realities that they've found themselves in.
So long as Faux news remains Faux news, (and Rush remains Rush, and Briebart remains Briebart), Republicans will get their information from the echo chamber...and we all saw in November how well that worked out.
The major reason that the value of coinage doesn't have to do with its actual metallic content is that in the olden days when a coin was literally worth its weight in gold, duplicitous traders would snip off portions of their coins. So while one gold farthing looked like every other gold farthing, it might weigh less, and the trader could cheat you out of your money.
It'd be like going to the store, getting four quarters and not looking at your coins before you realize you only have three US quarters and one Canadian. Your one dollar would be worth 75 cents (well, 75 American cents and 25 Canadian cents... but not many stores taken Canadian currency.)
They used to file the edges too, to take a little off, that's why coins starting having milled edges, to eliminate this practice.
If you'd followed current currency exchange values, you'd know that the Canadian dollar is virtually at par with the US dollar ($.96+ a few days ago), and has even been worth more in the last year or so.
No I'm aware of that fact, Lynn.
Most American stores don't take Canadian currency, however.
Well. most stores not along the Canadian border. I grew up in Washington, and we could always use Canadian money (discounted, of course). Doubt I could get anywhere here in Arizona.
True, but I wonder, how do you ask for change for a trillion?
I guess you could ask for a couple hundreds of thousands of pounds of gold, and could you make one of those hundreds of thousands of pounds of gold as maybe a couple of millions of pounds of silver, and I'll be needing a hernia repair so give a couple of pounds of silver transferred to my Dr.'s account. Just amazing......
Ah, it's just their way of evaluating public education! -Kevo
You don't have to START OUT stupid...chances are you'll end up that way.
oops that reply was for ron byers' post.
You don't have to be stupid to watch Fox News, but I am sure it helps.
Add this to the list of dumb things Republicans THINK they know FOR SURE, and then become OUTRAGED over:
o President Obama can single-handedly usurp the Second Amendment with a Signing Statement.
o Global-Warming is a hoax because of record snowfall (the result of increased evaporation) in the Winter.
o The only way to fix our economy is to mimic European austerity measures that are destroying Europe's economy (oh, and by the way, Obama wants the U.S. to be more like Europe.)
Half this country is astoundingly DUMB, proud of it, and holding the rest of us hostage.
Thank you, but here's one you forgot:
- the Oligarchic pimps with their GOTP bought legislators are usurping our democracy for their own autocratic fascist control.
You mean 47% of the country.
If you're trying to confuse and misinform people who think they're paying attention and well-informed (because they keep paying attention to your confusing misinformation), that's not a mistake. Feature, not bug.
They vote the idiots into office and then arm themselves to protect themselves from the idiots in the office.
Common sense, which is lacking, in the people who believe this stuff is more than sad.
Okay, one last time (for Fox News viewers)...
Coins and bills do not contain an amount of materials equal to their face value. They are currency and are backed by the full faith and credit of the government of the United States of America. But, they won't be worth as much if the right wing loonies allow the country to default on its obligations.
It boggles the mind how many people don't get that there isn't $20 worth of material in a $20 bill, or that it takes 3 cents and some to make a penny. When you handle cash, you're manipulating totems of value, not ACTUAL value; it's what fiat currency is all about. Sometimes I think people want to go back to gold on their way to trading sheep for wood, Settlers-of-Catan style.
Don't bother them with stuff like "science" and "facts."
Wait, wait... THIS was the monetary issue Republicans couldn't understand? But they understand the Fed, and the debt ceiling, the fiscal cliff, and the stock market... or do they?
This is 100% intentional misinformation. No question about it. If you're watching Faux News, this your cue to RUN AWAY SCREAMING!
So, Dr. Maddow, currency is a creature of credibility. If the U.S. were to lose its credibility then the value it assigned to its currency would drop almost immediately.
This is why the we must be very careful about screwing around with our money. Minting a $1T coin, as fun as it might be to discuss, would instantly create $1T ex nihilo. That amounts to about 1/15th of the entire U.S. yearly GDP. Can someone say Weimar Republic?
I don't know if you want to make that big an adjustment to the money supply.
Chuck: Gee... does messing with the debt ceiling also cause financial "credibility" loss? Gosh golly, wouldn't want to "screw" around with that now would we...
Yes printing a trillion dollar coin would lead to the US becoming Nazi Germany.
Can you say hyperbole devalues any other intelligent statement I could've possibly brought up?
yes...and this is WHY it's even being 'discussed'. If the GOP wants to talk about 'leverage' with the Debt Ceiling and then say it 'really wouldn't be THAT bad' then we can 'discuss' the trillion dollar coin. They are equally stupid.
Cartoonthenews!: The Weimar Republic wasn't Nazi Germany. It was the Weimar Republic. Google.
WatchingFoxnews is like watching the movie Dumb And Dumber. he reality of the differen'ts is we know one is a good stupid movie. So far Fox New's has no clue to what the differnt's is. People that rely of Fox news I trynot have a conversation with. Fox news has a micro chip in it to make a wrape mind.
Nice analogy, but at least Dumb and Dumber had good hair...
Based on your "spelling," Jerry Wayne, I'd say you've been watching a LOT of Fox Spews. Uh, what is a "differnt's?"
So the guy isn't a great speller. So what. You understood what he meant, so give him a break. Sheesh...
Fun Fact of the Day: $100 PAPER BILL Would weight 257 pounds based on price of Staples® Multipurpose Paper, 8 1/2" x 11", Ream @ $7.79/each.
Love to see that info graphic on Fox News.
Long ago, barter was the medium of exchange. One basket of figs for a fish. You hate fish? Barter it, in turn, for a pair of sandals.
Then coins were minted, and you could exchange a small image of Caesar for the figs. Or a big image of Caesar for a donkey.
That worked for millennia, until we "ran out" (money supply exceeded bullion supply) of silver/gold in the 19th Century.
So now we have the dollar/yen/drachma, etc. and an agreement among nations as to their "worth". (with a little help from currency traders- aka the Gnomes of Zurich.)
Once again, there is no confusion here. There is no failure to understand. There is only the deliberate spread of misinformation, otherwise known as propaganda. That should be clear just from the fact that it's Fox "News" we're talking about.
Coman sence for thought. If we would mint a coin to pay China off & leave enought in bank (keep Bush Away from it) we could pay our money to debt and put it in a special account to be paid back to us the USA Treasure Dept, we could be out of debt and save money at the same time, Damn I forgot, this is tooo simple too do, we need 100,000 miles of red tape to rumble threw. Talk aout being Pissed, the GOP would have night -mares, nothing to bitch about.
Whoa, Buddy! Ya shore need to get yaself a spellin cheker masheen.
And now you've graduated to mockery. What a nice guy you are. Not.
dont be too hard on fox news they were one of the best allies the democrat party could have for the last8 years let em keep rattling on they will help the democrats win a trifecta in2016
It's Democratic - not Democrat - Party, John. That desired common usage change, initiated by republicans and their bought media, came about when testing of the two names against each other revealed that "democrat party" scored far below "democratic party" in polls, for respect and trust.
And Fauxsux viewers do not realize all the weighty opinions broadcast are virtually void of value and truth. A three year old is inherently more honest.
I'm less concerned with whether or not they know how money works (which they do, they just wanted some shocking over-the-top visuals for their viewers) and more concerned with the fact that they are presenting this as the President's actual option.
I'm just waiting for all the mass emails from my ill informed family warning me about how Obama going to mint this coin and ruin the country.
Yeah I don't think people realize that this was a suggestion from someone on a blog about what to do about domestic debt. Printing a trillion dollar coin would get rid of a trillion dollars of our domestic debt, but it will do absolutely nothing with the 6 trillion we owe internationally. I do not think people realize the differences between the two or how governments pay off one versus the other. I don't think anyone within the administration is taking this seriously: I think they look at this much like most people look at this- a comment left by a dude on a blog. Nothing more, nothing less.
Dont forget, it will have his image on it and a marijuana leaf on the reverse.
Holy mother, I'm waiting for the onslaught. It didn't take long for my beloved members to come waving the Al Gore TV station sale to me. Good grief, like I have to approve of or agree with everything someone does who is left of center on the political spectrum?
duplicate comment
I don't think it's a case of Fox "network didn't realize it was wrong," I think it was a case of them believing the vast majority of their viewers wouldn't realize they were wrong.
It's the same misunderstanding that's been driving the call to return to the gold standard, and that's been going on for years, and doesn't look like going away any time soon.
Could it be they just write these things to stir the pot? You know they are not that stupid. These are deliberate articles put out for the public. Fox seems to be like that child in school who says something stupid knowing it is stupid only to sit back and watch everyone else go nuts, and if they don't go nuts enough they stick their little pudgy finger in the pot only to stir it up some more. While this is going on they are in the back ground doing the dirty little thing they do not want you to see.