{"id":21635,"date":"2016-09-17T08:17:46","date_gmt":"2016-09-17T13:17:46","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21635"},"modified":"2016-09-17T08:17:46","modified_gmt":"2016-09-17T13:17:46","slug":"ken-rogoffs-government-debt-default-plan","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21635","title":{"rendered":"Ken Rogoff\u2019s Government Debt Default Plan"},"content":{"rendered":"

Ken Rogoff\u2019s Government Debt Default Plan<\/a><\/h3>\n

 <\/p>\n

Ken Rogoff is by all accounts a brilliant man. The Harvard professor and former IMF chief economist is a chess grandmaster. His thesis committee included current Fed vice-chair Stanley Fischer. But like many survivors of Ivy League hoop jumping, the poor fellow appears to have emerged punch drunk.<\/p>\n

That\u2019s the only conclusion to be drawn from Rogoff\u2019s new book,\u00a0The Curse of Cash\u00a0<\/em>, which, in effect, proposes a ban on paper currency.<\/p>\n

It\u2019s terrifying piece of work, for several reasons.<\/p>\n

First, the cashless society, which Rogoff proposes in order to make it easier for the US government to confiscate private wealth, in effect, amounts to an admission that Washington can\u2019t pay back its debts.<\/p>\n

Second, the fact that Rogoff uses the fight against \u201cterrorism\u201d and \u201ccrime\u201d arguments in selling his proposals to the public – justifications which he as a mathematician should know are farcical – suggest that his arguments hide another agenda.<\/p>\n

Third, and most important, is the fact that not only would banning cash not achieve Rogoff\u2019s objectives \u2013 it could cause irreparable harm to the dollar\u2019s role in the American economy and as a reserve currency.<\/p>\n

Let\u2019s look at these arguments one at a time.<\/p>\n

Enforced negative rates ARE debt defaults<\/em>
\n<\/strong><\/p>\n

Rogoff’s \u201ccashless society\u201d is an elegant solution to a key problem bedeviling the Federal Reserve: with interest rates at the zero bound, the US central bank has no ammunition left to fight the next recession – because if cuts rates below zero, savers will withdraw their cash and put it under their mattresses.<\/p>\n

\u201cIn principle, cutting interest rates below zero ought to stimulate consumption and investment in the same way as normal monetary policy,\u201d Rogoff writes. \u201cUnfortunately, the existence of cash gums up the works.\u201d<\/p>\n

That argument is spurious at best.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Ken Rogoff\u2019s Government Debt Default Plan   Ken Rogoff is by all accounts a brilliant man. The Harvard professor and former IMF chief economist is a chess grandmaster. His thesis committee included current Fed vice-chair Stanley Fischer. But like many survivors of Ivy League hoop jumping, the poor fellow appears to have emerged punch drunk. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1035,1034,4853,195,418,434,1508,536,13228,6355,8854,865],"class_list":["post-21635","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cash","tag-cashless-society","tag-confiscation","tag-debt","tag-imf","tag-international-monetary-fund","tag-kenneth-rogoff","tag-money","tag-peter-diekmeyer","tag-sprott-money","tag-stanley-fischer","tag-washington"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21635"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21635\/revisions"}],"predecessor-version":[{"id":21636,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21635\/revisions\/21636"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}