$1 trillion platinum coin

[jefboyardee]

Theater of the Absurd: Administration won't rule out minting $1 trillion platinum coin

Imagine - stamping "$1 trillion" on a coin and calling it money? Have they completely lost their minds? And what about Congress? If the executive branch can mint its own money why can't it authorize its expenditure as well?
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So what do I do with my penny collection?

 

[Speed Daemon]

Once again this is a case of needing to understand that extreme right-wing blogs aren't the God's honest truth. As any naturalized American (and at least a few of us native-born ones) knows, it's Congress, not the President, that has the power to tax and spend. And the Executive branch has always been the one to mint money. Read "American 'Thinker'" with a great deal of salt!

President Obama is a true Constitutional scholar, and his past executive decisions have proved his commitment to honoring the Constitution of the United States of America. Unfortunately the authors of the Constitution didn't make any provisions for a mutinous Congress. President Obama must do something to save the US from its enemies, including the Republicans.

Minting a large denomination coin is better for the American people than another sovereign debt default, that's for sure! However it has problems in the long run. Even though the coin would never go into circulation, it could dilute the value of the US Dollar, which would in turn raise the price of everything that the US imports. It could also cause the US' largest creditors to lose confidence in the US Dollar. But since that's why there would be any need to mint a "trillion dollar coin" in the first place, there would be no net loss if that should happen.

What's still not clear is how the President could use this coin to pay the minimum amounts due on all of the US' loans. For domestic creditors, this could be done in the form of a tax credit. But since the bulk of US sovereign debt is owed to foreign governments, that wouldn't help there. The payments could be made with zero-coupon sovereign bonds (which is already being done in Europe) or scrip.

The bottom line is that the President has a Constitutional duty to save the US from all enemies, and minting a trillion dollar coin is a reasonable next step in this time of crisis.

 

[jefboyardee]

President Obama is a true Constitutional scholar

That explains everything.

 

[pbf98]

Am I missing something? I thought minting/ printing more money just caused inflation

I admit I'm not the smartest when it comes to financial terms and government financial spending. But I do recall 11th grade government glass teaching that if you just print money it causes inflation.

 

[ElasticNinja]

Am I missing something? I thought minting/ printing more money just caused inflation

It does, a lot of people don't seem to realise this.

Inflation is the worst form of wealth redistribution.

Also, why could the executive branch be able to do this? Monetary policy should be in the hands of an independent central bank. In fact the way the US central bank actually buys federal bonds is similar to many a banana-republic.

 

[copestag]

unfortunately this is the sort of thing dillusional liberals contrive......... hell why not just mint a $17Trillion coin and pay off the debt..... same exact principle...... derp

 

[Speed Daemon]

Am I missing something? I thought minting/ printing more money just caused inflation

I admit I'm not the smartest when it comes to financial terms and government financial spending. But I do recall 11th grade government glass teaching that if you just print money it causes inflation.

Excellent point! That's precisely what I was thinking. But after I did some research I was reminded that for inflation to occur, the money must be put into circulation.

Since it would be impractical (to say the least!) to use the coin as pocket change, it would never see the light of day. FYI the $100,000 notes have never been in circulation. The remainder of $500, $1000, $5000 and $10,000 notes in circulation are so rare that the ones in good shape are sold for more than face value.

The only real benefit to minting this still-theoretical coin would be as a good-faith gesture, hopefully negating the bad-faith acts of the Republican members of Congress. The US must honor its sovereign debts, and if Congress will not do its job, the President must find some way to save the nation (and the whole world) from the economic disaster that another default could trigger.

 

[Davdi]

Sometines (Greece, Italy & Spain spring to mind) the best thing is to default and 're-boot' the currency. Although in EU countries, crashing out of the Euro could have considerable knock-on consequences. The UK needs to be formly out of the EU before the muck hits the fan and we're up the proverbial creek in a barbed-wire canoe sans paddle.

 

[Speed Daemon]

Sometines (Greece, Italy & Spain spring to mind) the best thing is to default and 're-boot' the currency. Although in EU countries, crashing out of the Euro could have considerable knock-on consequences. The UK needs to be formly out of the EU before the muck hits the fan and we're up the proverbial creek in a barbed-wire canoe sans paddle.

Here in the Us we have a saying: "if California gets sniffles, the whole country catches a cold." It's commentary on how our west coast influences the whole nation.

The same can be said about the US and the rest of the world. As early as in 1929 when the US stock markets crashed, the entire world suffered from the Great Depression. In Germany the Depression brought down the Weimar Republic, making room for the Nazis and Hitler, which in turn started WWII. More recently the two Bush recessions (the first under HW, the second under W) led to recessions in Japan, to which the US is its largest market.

China's burgeoning economy was even thrown into recession after the first US debt default. Now China is reading us the riot act. Not that it's doing any good. I hope you escape the Eurozone soon, because from what I've seen, the Republicans here will continue to see how much they can get away with (much like other authoritarian regimes), right up to when the hangman's noose stops them once and for all. I hate to write those words but that's how it's looking.

 

[ElasticNinja]

Sometines (Greece, Italy & Spain spring to mind) the best thing is to default and 're-boot' the currency.

In Italy and Spain's case? Are you serious? Not a hope.

Italy needs some structural reform. Its been in the doldrums for two decades, but with some reform it should be back up to its fighting weight. Spain has just come off a large construction boom, and still has relatively low debt. The problem is not interest repayments.

Greece did have a partial managed default, which it need. I would say that the rest of Europe will have to mutualise some more of the rest, as Greece cannot cut anymore and is now running a primary surplus (ie all its borrowings are to service debt).

Although in EU countries, crashing out of the Euro could have considerable knock-on consequences.

That's why no countries (bar maybe Greece, but Draghi has changed opinion on this, I reckon they'll stay no), will be crashing out of the Euro.

The UK needs to be formly out of the EU before the muck hits the fan and we're up the proverbial creek in a barbed-wire canoe sans paddle.

Why would you imagine leaving the EU will help? You have already excluded yourself from direct financial responsibility. You still want to be part of the single market, ie basically being a colony of Europe. If you leave the single market (to somehow shield you?), then the UK economy will collapse.

 

[ElasticNinja]

I hope you escape the Eurozone soon

Then you clearly have no understanding of the situation.

because from what I've seen, the Republicans here will continue to see how much they can get away with

Dafuq does this have to do with Europe?

I hate to write those words but that's how it's looking.

I'd say you don't, really.

Also, for the record, the UK is running the largest budget deficit in Europe.
It is also imposing austerity. There is a structural problem with the EU in that national governments deficit spending is inefficient due to the single market, yet the European government itself cannot do this spending.

Excellent point! That's precisely what I was thinking. But after I did some research I was reminded that for inflation to occur, the money must be put into circulation.

If you print money to pay debts you will cause strong inflation.

 

[Speed Daemon]

Then you clearly have no understanding of the situation.

Talk about the pot calling the kettle black!

 

[ElasticNinja]

Talk about the pot calling the kettle black!

You claim the UK needs to escape the Eurozone.

The UK, is not in the Eurozone. They decided to be awkward and stay out. While the Euro strengthened during the crisis theirs fell so much it was almost at parity with the Euro.

The UK government actually has no Eurozone liabilites. London is the main Euro trading hub, and of course the UK is in the single market. But it has its own bank and own currency. It is not in the Eurozone.

In fact the UK has so many opt outs no that its on the way out of the Union, unless there is a change in their mindset.

Also, whats so bad about the Euro that it requires escape? I think Peurto Rico should escape the Dollar, maybe New Hampshire too.

 

[Speed Daemon]

You claim the UK needs to escape the Eurozone.

No I did not.

How about you lose the combative attitude, OK?

 

[ElasticNinja]

No I did not.

Unfortunately, you did:

I hope you escape the Eurozone soon

How about you lose the combative attitude, OK?

If something is wrong on the internet, its still wrong.

 

[jefboyardee]

Trillion dollar coin idea *finally* goes down in flames.

About freaking time, too.

Forget about the government minting a $1 trillion coin to solve its debt-limit crisis.

Treasury Department spokesman Anthony Coley said Saturday that neither his department nor the Federal Reserve believes the law can or should be used to produce such a coin to avoid a coming battle with Congress over government borrowing.
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Some of President Barack Obama​

 

[Speed Daemon]

Yeah. The really, really, really stupid ones: apparently, there are people out there who thought that you could dump a trillion dollars into the economy in one go and NOT get vicious inflation. This is what happens when you only read history books that have the words ​