Medici-coin and the U.S. government

I like the show Da Vinci's Demons* in that the mythos has Da Vinci's humanism and science in tension with the church and unaccountable authority. Also Da Vinci himself - played by Tom Riley - is portrayed as a bit of a wag.** On the show, the Medicis are his sponsors.

Medici-coin by Izabella Kaminska

I think DeLong has a better comparison: the U.S. Government is now like the Medieval Medici Bank.

In a way, the United States government would then look like the Medieval Medici Bank. The Medieval Medici Bank doesn't pay you interest. It charges you fees. You don't lend it money in order to boost your wealth. You lend it money in order to keep your wealth safe--so that if the Pope excommunicated you and you had to flee the city of Lucca in the dead of night with only the clothes on your back, when you got to Paris you could draw on the local Medici bank. In a similar way, since 1990 the average growth rate of the economy has never been lower than and has often been much higher than the average interest rate the US pays on its debt. The US can simply borrows, roll over the borrowing, and watch, as time passes, the debt it owes shrink relative to the size of its economy. No reason to fear inflation. No policy changes required in order to make people hold Treasury debt at low interest rates. It just happens.

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*new season in 2014
** He's an idiosyncratic genius like Jonny Lee Miller's Sherlock Holmes.