Pluralistic: Blue Bonds (04 Oct 2025)


Today's links


A US $100 bill, tinted blue. Benjamin Franklin has been replaced with the bear from the California state flag.

Blue Bonds (permalink)

The US economy is on the brink. Trump's illegal clawbacks of federal spending (waved through by a supine Congress), combined with his illegal tariffs and his government shutdown have sucked billions out of the economy, which was already much-weakened by proliferating crypto scams and AI stock swindles.

Every day sees more irreparable harm done. People who are pushed out of the workforce stand a good chance of never rejoining it, becoming "discouraged workers" (the economist's term for a worker who can no longer find employment thanks to bosses' prejudice against hiring people who don't already have a job). The businesses those people used to patronize are next in line for the mortuary.

Farms are failing at rates not seen in generations, even as Trump sends billions to prop up the Argentinian madman Javier Milei, whose Trumpalike policies have wrecked the Argentine economy. Milei repaid the US for its bailout by sending soybeans to China to replace the US crops that China blocked in response to Trump's trade war:

https://www.farmprogress.com/commentary/china-thrives-without-u-s-soybeans

Long-running scientific experiments that might represent the cure for the cancer you'll contract next year, or a way to improve solar output and save you from the wildfires and floods that have your town's name on them, or a vaccine for the next pandemic, have had the plug pulled and may never restart. Research groups at universities are falling apart, their grants illegally canceled, the teams scattered to the four winds, never to reform.

Families, illegally deprived of food assistance, are having to choose between rent and groceries. Parents skip medication to feed their kids. Kids go hungry. All of this has permanent effects – on learning, on health, and on growth. Literally: my grandfather, a refugee who suffered from malnutrition in his boyhood, was a head shorter than his Canadian-born children.

Solar and wind projects are being shut down just as they near completion, squandering billions in public money – and a renewable future. Trump has stolen billions intended for Chicago public transit:

https://www.politico.com/news/2025/10/03/trump-targets-chicago-transit-money-shutdown-00592722

What is to be done? What can be done?

Many Americans have pinned their hopes on federalism, the devolution of power to the states. When I became a US citizen, the hardest question on the exam was untangling the tortured syntax of the 10th Amendment:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In a nutshell: the states have total power over their affairs, except where the Constitution says otherwise.

Lawsuits by state attorneys general have thus far done little to stanch the bleeding. Lawsuits are slow, and they rely on judges upholding the law, a task the Supreme Court has abandoned with sadistic glee.

The people need money, not legal briefs.

The editorial collective of Money on the Left offers a way to get money into the peoples' hands, right now, to allow us the material security we need if we are to organize to overthrow fascism and rekindle American Democracy. Their solution is "Blue Bonds," billed as "A Fiscal Strategy for Overcoming Trump 2.0":

https://moneyontheleft.org/2025/05/09/blue-bonds-a-fiscal-strategy-for-overcoming-trump-2-0/

What's a Blue Bond? It's a municipal or state bond, issued to replace the funds that Trump has illegally impounded. Blue states and cities can issue these bonds and use them to fund all the research, subsidies, programs and projects that Trump is trying to murder:

Dollars for housing and rental assistance, infrastructure and construction projects, rural energy and development, public health programs, veterans’ services, K-12 schools, colleges and universities, arts and culture: all public money previously authorized by congressional procedures should be reinstated in compliance with the Constitution.

Blue Bonds wouldn't just be backed by the states and cities that issue them, either. The Fed can swap them, one-for-one, with T-bills, the federal Treasury bonds that are considered "risk-free debt."

Blue Bonds don't have to be bonds, either; states can issue lots of different kinds of debt instruments, like "Tax Anticipation Notes" (TANs) and "Revenue Anticipation Notes" (RANs). These have different maturities and interest rates, and can be combined to hedge against liquidity traps.

These are legal. As the authors write, "Section 13(3) of the Federal Reserve Act permits the Central Bank to purchase debt in any amount 'in unusual and exigent circumstances,' such as during financial crises." Trump destroying the US economy is unquestionably "a crisis." The Fed used Special Purpose Vehicles to bail out the economy during other recent crises, including the 2008 crash and covid. The difference here is that this is a people's bailout, going to fund the programs that people – not bankers or investors – rely on.

This is within the Fed's means. Thanks to those earlier bailouts, the Fed holds $7T worth of assets, and has "repeatedly emphasized [that] it can continue to do so without limit":

https://www.c-span.org/clip/house-committee/user-clip-greenspan-there-is-nothing-to-prevent-the-government-from-creating-as-much-money-as-it-wants/5028493

But – as the authors point out – this isn't just about bridging state and local financing through the Trump years. This is a fundamental restructuring of public spending, a way out of neoliberalism's violent allergy to the fiscal spending that expands the economy and lifts up the population. It's been nearly a century since the New Deal and Americans are still basking in its benefits (where they survive). It is time to renew those benefits:

https://pluralistic.net/2025/10/03/we-dont-care-we-dont-have-to/#were-the-phone-company

Austerity can't get us out of a collapsing economy. It is precisely when the private sector withers that the state must step in, providing the income that people need to do the purchasing that makes the private sector possible. After all, money ultimately comes from the government (try making your US dollars and see how far you get). It's only through government spending (and government authorized lending through banks) that money enters our economy. When governments stop spending, money – the economy's lubricant – dries up, and the economy grinds to a halt.

Public debt issuance isn't "borrowing" in the sense that you or I might borrow. Governments are not households or businesses. Governments aren't money users, they are money creators. Governments don't need to "borrow" to create money any more than Starbucks needs to "borrow" to create gift cards redeemable for future mochalattafrappacheenaspressae.

Private debt is a drag on the debtor. State debt is generative. It creates the roads, the hospitals, the schools, the educated and healthy populace, needed for the private sector.

To issue Blue Bonds, states – which cannot be forced into bankruptcy – must repeal their disastrous "balanced budget" rules and rules requiring supermajorities to raise taxes. From Money on the Left: "public deficits are healthy, so long as they support communities and take care of our planet. What is debt but a promise to bring about a desired outcome in the future?"

Trump has destroyed investor confidence in the US economy. The only paths to returns today are flushing your money into the crypto casino or backing giga-mergers that only go through if the companies involved throw sufficient bribes at the tip jar on the Resolute Desk. Blue Bonds are a safe place for institutional investors seeking a safe haven from kleptocratic chaos.

As the authors say, this is "the true Abundance agenda" – not the "diet Reaganism" of deregulation and sacrifices to the market gods being peddled by the corporate wing of the Democratic Party. A true Abundance agenda "builds robust public systems, including newly chartered public banks, that put people over profits."

Blue Bonds are the good version of Trump's beloved shitcoins. Rather than wildcat money created by and for speculators, Blue Bonds are a source of public prosperity, backed by a present or future Fed under democratic control, accountable to the people. Trump and his fascist pals are all-in on creating as many forms of "money" as there are memes on the internet. Here, at last, is a form of novel money creation that builds a human, shared future.

Hey look at this (permalink)


A shelf of leatherbound history books with a gilt-stamped series title, 'The World's Famous Events.'

Object permanence (permalink)

#20yrsago Ebook DRM that encourages identity theft gets a huge makeover https://web.archive.org/web/20051011041018/https://www.eff.org/deeplinks/archives/004026.php

#15yrsago Security company ad tricks people into thinking their houses were burgled https://copyranter.blogspot.com/2010/10/adt-shows-you-how-easy-it-is-to-break.html

#15yrsago Firefighters watch as house burns to the ground: owner had not paid annual firefighting fees https://web.archive.org/web/20101003021723/https://www.wpsdlocal6.com/news/local/firefighters-watch-as-home-burns-to-the-ground-104052668.html

#15yrsago Sky Marshals to lose their cushy first-class seats? https://web.archive.org/web/20160521034617/https://www.wsj.com/article_email/SB10001424052748703431604575521832473932878-lMyQjAxMTAwMDIwOTEyNDkyWj.html

#15yrsago Michael Swanwick writes a story about autumn on fallen leaves https://www.flickr.com/photos/54366973@N04/5035946705/in/photostream/

#15yrsago Why the copyright wars matter: a reply to Helienne Lindvall https://www.theguardian.com/technology/blog/2010/oct/05/free-online-content-cory-doctorow?utm_source=twitterfeed&utm_medium=twitter

#15yrsago William Gibson nails my philosophy in life https://memex.craphound.com/2010/10/04/william-gibson-nails-my-philosophy-in-life/

#10yrsago Car accidents aren’t accidents https://www.wired.com/2015/10/stop-calling-daughters-death-car-accident/

#5yrsago Why I love the Haunted Mansion https://pluralistic.net/2020/10/04/build-back-better/#grim-grinning-ghosts

#5yrsago Normal isn't enough https://pluralistic.net/2020/10/04/build-back-better/#post-pandemic

Upcoming appearances (permalink)

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A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


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Latest books (permalink)


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Upcoming books (permalink)

  • "Canny Valley": A limited edition collection of the collages I create for Pluralistic, self-published, September 2025

  • "Enshittification: Why Everything Suddenly Got Worse and What to Do About It," Farrar, Straus, Giroux, October 7 2025
    https://us.macmillan.com/books/9780374619329/enshittification/

  • "Unauthorized Bread": a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2026

  • "Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2026

  • "The Memex Method," Farrar, Straus, Giroux, 2026

  • "The Reverse-Centaur's Guide to AI," a short book about being a better AI critic, Farrar, Straus and Giroux, 2026


Colophon (permalink)

Today's top sources:

Currently writing:

  • "The Reverse Centaur's Guide to AI," a short book for Farrar, Straus and Giroux about being an effective AI critic. FIRST DRAFT COMPLETE AND SUBMITTED.

  • A Little Brother short story about DIY insulin PLANNING

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