Comment Re:Platinum Coin Seigniorage (PCS) hack (Score 1) 639
Curious, I read it. It demonstrated nothing about inflation, in fact it said "I’ll consider the inflation objection at length in my next post".
However, I don't need a Interwebs wacko to tell me that you can dry water and drink it. If you produce money with no actual wealth to back it up, be it old-style gold reserve or economic worth of the issuing country, it will cause inflation the moment it hits the economic system. Of course if you kept the quadrillion-dollar coin under your bed and told no one, it would cause no inflation as no one would know it existed; but if you use to pay the US government's debts, you have more currency around and no wealth to back it up; by simple supply and demand, value of currency will plummet (there is less than a trillion dollar circulating worldwide), i.e. inflation will boom so much it will make Zimbabwe look like Switzerland.
Even if the quadrillion-dollar coin would not start inflation, it would tell the rest of the world that the US are ready to issue fiat currency to pay their debt: that would start a bank run to get rid of their petrodollars (guess what, there is no fiat fuel, and you would not be able to buy much oil with those petrodollars). See the link above, according to the Fed most dollars are outside the US, a lot of them in the coffers of countries that need to buy oil.
What the US need is not "more" or "less" spending, it is more of the right spending and less of the wrong spending. The US have humongous military spending, which is by definition unproductive (in fact, destructive by its very nature, though the destruction is usually externalised to other countries). Yes, the military also finances R&D, but that R&D would be better aimed for the US economy if it were financed by universities or the private sector with governmental financial support, instead of being trickle-down adaptations of military technology.
The US have too low welfare, with insane amounts of poverty rampaging across the country; these people have no opportunity of becoming productive citizens because they never receive appropriate education. The point is not giving the poor food and shelter (which is of course still necessary), but giving their children good public schools that give them an alternative to crime as the best option for gaining wealth.
Also, there is a disproportionate amount of inmates in US jails. US prisons house more inmates than China, not just per capita— in absolute numbers . All these have to be fed, clothed and guarded, and this is expensive. It is way cheaper to institute education programs to make sure they don't recidivate, but then again some politicians would not look though on crime, which seems to be more important than to be smart on crime. Also, several states outsourced jail management to privates, who are paid by the inmate and have thereby no interest in re-educating their inmates (in fact, they do want their customers to come back!). More government, less market here.