So today, the Republican Party wheeled out their defeated 2012 candidate Mitt Romney to denounce Donald Trump. This was the latest in a series of events that are eerily similar to events that took place last summer during the Labour leadership party contest. Romney appeared at an event organised by the Hinckley Institute which seems to me quite similar to the Progress event at which Tony Blair recommended supporters of Jeremy Corbyn should get a ‘heart transplant’.
There are other similarities too. People said Corbyn didn’t really want the job. They said the same about Trump. Those within and outside the Labour Party tried to damn Corbyn with guilt by association. They’ve just tried the exact same thing with Trump. In a desperate last ditch effort to derail Corbyn, third placed candidate Yvette Cooper tried to attack Corbyn. In a desperate last ditch effort to derail Trump, third placed candidate Marco Rubio tried to attack Trump.
Corbyn attracted hundreds of thousands of new supporters to the Labour Party. In America, turnouts in the Republican Primaries have been breaking records.
Obviously there are huge differences between the two men. Trump was already a celebrity in an even more celebrity-obsessed culture than ours and a billionaire to boot, while Corbyn was virtually unknown until last June. On policy, you could say Trump is the anti-Corbyn (or vice versa).
Tony Blair’s attack on Corbyn didn’t seem to have the desired effect. Some think it actually bolstered support for Corbyn. I wonder how effective Mitt Romney’s attack will have?
After the farce of the phony ‘fiscal cliff’ crisis at the end of last year, a new debate now rages in the US over the issue of the debt ceiling.
In the US, budgets are approved by congress, but at the same time, the government is constrained by the ‘debt ceiling’. This places a limit on the total amount of government debt that may be issued. If the ceiling is hit, the government cannot continue to issue new debt. This means that although congress has approved a certain level of spending, the government may be unable to carry it out without further approval to raise the debt ceiling.
Previously, the debt ceiling has been raised as and when it was needed without incident, but since Obama became president, the Republicans have used it as a weapon to try to force through savage spending cuts. A previous debt ceiling ‘crisis’ played out in 2011 which led to the fiscal cliff fiasco – automatic spending cuts and tax increases, that last week’s deal only partially put a stop to. Now the issue of the debt ceiling has raised its ugly head again, leading to some to suggest creative ideas to avoid the genuine crisis that would ensue if the debt ceiling is not raised.
One such idea was first raised as a response to debt ceiling crisis part 1, when one blogger pointed out a law which allows the US Treasury Secretary to authorise the minting of platinum coins of any denomination. In theory, the US Treasury could mint a $1 trillion coin and deposit it at the Federal Reserve, which would mean the government could get round the debt ceiling and continue spending as approved by congress. This idea has been gaining some traction in the US recently, and the hashtag started by MMT economist @deficitowl, #mintthecoin even trended on Twitter for a while. While it’s unlikely this idea would ever be acted upon by the President, (and probably unnecessary, as even the Republicans are not actually stupid enough to not raise the ceiling aren’t they?), it does demonstrate further the absurdity of worrying about a government with it’s own currency running out of money or being beholden to the bond markets. We don’t have a debt ceiling or the option of using coin minting in the UK, but we do could sell bonds directly to the central bank rather than to the markets, and run a deficit without incurring more debt.
The debt ceiling debate looks set to run and run. Hopefully along the way, people will learn something about how the monetary system actually works!