the trillion dollar coin.

the trillion dollar coin.
back in 2013, the atlantic surfaced the concept of the trillion dollar coin: the treasury mints it for the federal reserve, which then uses it to pay down debts and avoids congress having to raise the debt ceiling
  • in 2011 the u.s. was under the threat of defaulting on their obligations bc of the debt ceiling -- a debt limit for the gvt set by congress
  • writer cullen roche floated the idea of a trillion dollar coin as a solution on his blog, “pragmatic capitalism”
  • the legality of this idea has been questioned -- but surprisingly it is technically allowed. in 1997 congress passed a law allowing the treasury secretary to mint platinum coins in any amount they desire
and this year the new republic is fed up with congress fighting again about the debt ceiling: minting the trillion dollar coin would be the *perfect* solution. the gop is being unreasonable in refusing to raise the ceiling
  • the gop is hijacking the democrats’ effort to raise the debt ceiling, putting the nation at risk by threatening default
  • instead of waiting for republicans to get serious, the treasury could mint a trillion dollar coin and end the stupid debate once and for all
  • ppl are overthinking ways to end america’s debt ceiling crisis. the solution is staring us right in the face
an msnbc op agreed: house republicans are threatening to force the u.s. to default on its debts, a situation that would have disastrous economic consequences. biden has to embrace the trillion dollar coin loophole
  • the gop put biden in a bad spot. if he obeys the debt limit, he would have to refuse to spend money the gvt already committed to spending
  • and that’s just as ridiculous as minting a trillion dollar coin. if biden uses the loophole, at least he’ll spare the u.s. an economic crisis
  • obeying the debt ceiling would be illegal. and a 1997 law clearly makes minting a trillion dollar coin legal -- it’s not a stupid gimmick if it mitigates a crisis
but the mises institute doesn’t like the idea: the treasury would have to fabricate the value of a coin just to plunge the nation deeper into debt. it’s bad for taxpayers and it could make inflation worse
  • when the gvt goes into debt, it sells bonds for cash. as the country goes further into debt, taxpayers are responsible for paying off the bonds when they mature, and paying interest when the gvt take out new debt
  • in the coin scheme, the treasury is essentially printing more money to cover its debts
  • printing more money will contribute to inflation -- and inflation is already at record highs
and forbes said a trillion dollar coin can’t exist -- it’s not real currency and there is no demand for it
  • you can print money -- but “you can’t print demand”
  • gvts don’t have any real spending power -- they only benefit from economic growth
  • w/o work, money is meaningless
  • the coin would be a giant waste of resources
national review added that the trillion dollar coin would only be a bandaid solution: it would buy the treasury less than a year, and wouldn’t address the root problem -- the government’s tendency to overspend
  • sure, the coin theory *could* work, but it could contribute to inflation. and it’s not a long-term solution
  • the fed created money in response to the covid pandemic, and it caused serious inflation. the fed’s had to work for years to get inflation under control after that
  • instead of minting a trillion dollar coin, the gvt should just spend less money!
perhaps this debate is for nothing. the secretary of the u.s. treasury, janet yellen, rejected the trillion dollar coin idea. she said the fed simply wouldn’t go for it -- and the ultimate decision lies with the fed
  • in the trillion dollar coin plan, the treasury would mint the coin, but the fed would have to accept the coin in order for the plan to work
  • in the past, the fed has objected to settling disagreements in congress
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