Anybody else having trouble with the post-scheduler in the new blogger interface?
An interesting development: Supposedly, the U.S. Treasury could have a couple trillion-dollar coins minted on the cheap, and deposit them at the Federal Reserve. That would increase the balance in the Treasury's checking account. It would let the Federal government get around the debt ceiling limit -- because the coins are not debt.
But anyway, context: The idea is spreading on MMT blogs, so I take it for an MMT idea. And therefore I must bring up another MMT idea, one that disturbs me immensely: the notion that "all money is debt".
Here's the rub: The beowulf coin is a way to get around the debt limit because the coin is not debt. But the people most in love with the coin are the same people who go around saying "all money is debt". So I have to ask, is the coin money? Because if it is money, then it must be debt. That, or the "all money is debt" thing is wrong.
The "all money is debt" idea is some kind of philosophical definition, I think. It is not an economic definition. To me, to most people, a debt is something that must be repaid. Money that you borrow, for example, must be repaid, which is why the lender keeps track of it. And the amount the lender tracks is a debt.
But if you or I or the Federal government happens to have a dollar, that dollar is not debt. Money that you earn is an example of money you do not have to pay back. You are not obligated to "pay it back" to anybody simply because you have it.
I object to the "all money is debt" notion for one reason: it blurs an important distinction. It says that money you have to pay back, and money you don't have to pay back, are exactly the same.
Arthurian economics is based on the distinction between money and debt, and on the increasing cost of money in the economy as a whole, as usage shifts away from money you don't have to pay back, to money you do have to pay back.
But it is much easier to understand what I have to say if you allow me to use the word "money" to mean I don't have to pay it back, and the word "debt" to mean I do have to pay it back. Then it becomes quite simple.