01.09.2013 08:06 AM

Ivey School press release

TORONTO – Students looking to spend thousands on post-secondary degrees can now obtain a Richard Ivey School education – where they’ll get to learn principles of Social Credit economics from geniuses like Mike Moffat.

“Just print more money,” says Moffat, who alleges that he is a professor. “It didn’t work for the Alberta Socreds in the thirties, but I think Obama should do it anyway.”

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  1. GPAlta says:

    The monetary base has tripled in the US since the crisis began with no impact on inflation.
    Plus this is not about printing money, it is about acquiring debt. The new spending bills that require new debt have already been passed by congress, but the republicans are threatening to prevent the government from paying its bills, using the world economy as a hostage. This saves the hostage. I don’t know anything about Mike Moffatt, but he didn’t say anything crazy in the article.
    The debt ceiling is the crazy thing, since it is a meaningless technicality that has been raised 40 times since 1980, and no other congress has blackmailed the world over it.

    • Tim says:

      Raising the debt ceiling is a technicality. Program spending, funded by borrowing money over the last twelve years (such as the wars in Iraq and Afghanistan and the a drug plan for seniors) is what creates the need to do this. That’s not a technicality, and I don’t see how anybody can be impressed with Democrat or Republican policies on this issue. Paul Krugman is sincere and thoughtful, but I think he’s wrong on this one.

      • GPAlta says:

        The Democrats have a history of reducing deficits and/or creating surpluses, which Obama is continuing by overseeing large structural reductions in government spending (such as Obamacare, which is actually much cheaper than the US Government’s previous spending on healthcare), while the Republicans, like the Canadian Conservatives have a history of turning surpluses into record-breaking deficits. I would say it is pretty clear whose policies are more impressive.

        Krugman is right in both law and economics on this one. The US Government needs to continue paying its employees, its vendors, and its debt holders (mostly US citizens with T-Bills) one way or another: those costs are not going away, and without either the debt ceiling increase or the coin, those bills will not be paid, and the US Government’s word will be worthless on both debt and currency. The normal way is to increase the debt ceiling, just as Bush did 8 times in 8 years with no resistance from Congress, but the House Republicans have said that normal accounting is not going to be allowed without severe reductions in medicare and social security, Krugman is just saying that it is better to pay the bills using unusual accounting than either to not pay the bills at all or to create massive suffering among the weakest Americans.

        • Tim says:

          I’ll agree with you that the Democrats are better at finance than the Republicans, just like the Liberals are smarter than the Conservatives or the old PC’s. But more impressive doesn’t equal impressive. Brian Mulroney’s administration as you no doubt recall recall eliminated the “structural deficit” which wasn’t anywhere near enough. Putting off the heavy lifting is what we’re watching here. The Paul Krugman/Robert Reich wing of the Democrats refuse to acknowledge the realities of globalization. The American middle class is not coming back to lift the US out of this current problem and there are some painful structural adjustments on the horizon. It would be nice if it wasn’t on the backs of the less fortunate, but it’s not going to go away.

  2. Mike says:

    Krugman and the New Keynsians have been right since the onset of our “Great Recession”. The “Austerians” have been disastrously wrong. GPAlta is correct.

    • Mike says:


      The Alberta Socred actions on taking office in the 30s do not seem relevant to the actions Krugman proposes. As GPAlta points out, it’s about deling with the artificial U.S. “debt ceiling”. Krugman discusses it here: http://krugman.blogs.nytimes.com/2013/01/08/rage-against-the-coin/

      • James Hanna says:

        The Socred solution wasn’t issuing ” Albeta Bonds”, somehting that Alberta and every province has done and continues to do without any interference from the feds (and other issues aside, if for some reason a province was in threat of default the Feds likely would come to their aid, but we aren’t quite in Grecian territory yet). What they tried to do was effectively print money. Yes, they cant do that constitutionally, so they came up ” prosperity certificates” which could be used like money. Same difference. Just it was a boneheaded idea. http://en.wikipedia.org/wiki/Prosperity_certificate

  3. Michael says:

    Isn’t the idea that the coin would just sit in Fort Knox, guaranteeing that cheques from the Government could still be passed without the Treasury having to do a bond auction? (Which is what the debt ceiling silliness is preventing.)

    You can print all the trillion-dollar bills you want, but if they’re never in circulation, why would they cause inflation?

  4. James Bow says:

    Warren, I agree that my gut reaction says that solving the US debt crisis with a plotline straight out of the Simpsons is… well… it really chokes in my craw that we’re even thinking about this.

    But as commentators pointed out, this is different from printing money and dumping it in the economy, as we saw in Weimar Germany. It’s a legal technicality to get around the equally silly debt limit. The trillion dollar coin doesn’t end up circulating in the economy, it’s put in deep storage to allow the US government to keep paying its bills rather than default on its debts.

    That’s still printing money and dumping it into the economy, but this is the action that has been happening for the past several years as the US has maintained this deficit, and we haven’t seen the hyperinflation that has marked the examples of mass printing of money in the past century. So, this is not exactly Social Credit thinking, here.

    Over the long term, this deficit needs to dragged down and stopped, but the looming debt limit promises to have really bad affects on the world economy. We really would like to avoid the financial cliff, but going from 100mph to 0mph in less than a second does as much damage to the people in the car as flying off the cliff.

  5. Peter says:

    Is it possible it didn’t work for the Alberta Socreds in the 30’s because Alberta has no power to print or create money?

    Nah, that’s too easy.

  6. James Smith says:

    Can Obama flip the #trillion$coin into a wishing well & get all his presidential wishes?
    What happens if it gets stuck in a Pop Machine?
    Will a pay phone (remember them?) give you change?
    Can they just give it to China?
    Can’t wait to see the knock off-by the Franklin Mint!

  7. Kaplan says:

    With all due respect, I don’t think Moffat said what you’ve attributed to him…

    “The platinum coin is a silly, but elegant, solution to a silly problem,” Mike Moffatt, assistant economics professor at Western University’s Richard Ivey School of Business, wrote in an email to CBC News. “The platinum coin proposal gives the Obama administration an alternative if House Republicans are completely intransigent on the debt ceiling issue.”

    “Although there are no direct economic consequences, I cannot see the Obama administration using such an option,” Moffatt said. “Such a move would be highly controversial and would not be well understood by the general public.”

  8. James Hanna says:

    I’m just curious how an economics professor thinks that a burger costs 75 cents.

    Thats way more silly than anything Moffatt said.

  9. patrick says:

    The US government can print coin, but not bills. I think the assumption is that the government can’t control the money supply printing silver dollars, so the private banks remain in charge. Actually, I think the government should control the printing and supply of money – imagine all the money printed with out the debt load and where the US economy would be (remember the banks are just printing money, not recycling it, since it’s mostly electronically created numbers).
    It’s funny that everyone brings up the failure of Germany during the twenties but no one brings up the success of Britain controlling the money supply that took it out of the dark ages and into the enlightenment.

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