By Josh Barro
In the news release announcing his bill to derail the platinum coin effort, Republican Representative Greg Walden says something really stupid: “My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air."
Well, yeah, obviously the Waldens' company couldn't issue currency to pay its bills, because issuing currency is a function of the federal government, not of some random small business in Oregon.
There are all sorts of nonsensical statements you could offer with the same structure. For example, why should we have a U.S. Marshals Service? After all, when I ran a small business, we didn't just go around arresting fugitives who were wanted for federal crimes.
Or why should the federal government impose environmental regulations or negotiate treaties with foreign countries? A small-business owner who tried to do those things would end up looking really silly.
The mistaken idea that federal economic policy should be driven by the same internal logic as corporate or household budgeting has led to some of the worst ideas of the last few years, such as that governments should respond to budget deficits created by the economic cycle with tax increases and spending cuts.
The federal government isn't a small business, and it has different purposes and different constraints than small businesses do. Whether minting a platinum coin is a good idea has nothing to do with how the Waldens balance the books at their company.
Read more breaking commentary from Bloomberg View at the Ticker.-0- Jan/07/2013 18:03 GMT