WSJ - Krugman endorses $1 Trillion coin idea.

[Anti Federalist]

Yeah, I'm shocked.



'Joke' Solution to Debt Clash Gets Serious Study

By ERIC MORATH

http://online.wsj.com/article/SB10001424127887323706704578228072822313666.html

What if Washington's next debt clash, widely expected to be as bitter as the "fiscal cliff" fight, could be resolved with the minting of a $1 trillion coin?

That is the idea being pushed by a handful of policy wonks and columnists, and it has caught the attention of lawmakers even though it is an unlikely solution.

Under the proposal, the U.S. Treasury would use an obscure commemorative-coin law to mint at least one platinum coin and deposit it at the Federal Reserve, giving the government breathing space as it bumps up against the $16.4 trillion borrowing limit.

Rep. Jerrold Nadler (D., N.Y.) last week said he was "absolutely serious" about pushing for the coin. Nobel Prize-winning economist Paul Krugman, in a column on the New York Times website Monday, said Washington should be ready to take the step. A petition at whitehouse.gov asks the U.S. Mint to make the coin, and had drawn over 5,000 signatures as of Monday evening.

"We would avert the absurd-yet-imminent debt ceiling face-off in Congress," the petition says.

The fervor for the concept has grown so strong that Rep. Greg Walden (R., Ore.) said he would introduce a bill to bar the Treasury from making such a move.

"This is Alice in Wonderland looking through the looking glass at debt management," Mr. Walden said.

When asked about the platinum-coin idea, White House spokesman Jay Carney said the debt-ceiling solution is a political one. "The way to prevent a debt ceiling crisis is not to manufacture one. Congress has the responsibility to pay the bills Congress racked up," Mr. Carney said.

The U.S. Treasury declined to comment.

The Treasury secretary has the power to "mint and issue platinum bullion coins" in dominations of his choosing. In theory, such coins could be used to essentially buy back U.S. Treasuries held by the Fed, thus lowering the outstanding amount of government debt and avoiding the looming debt ceiling.

Harvard Law School professor Laurence H. Tribe said the concept appears to be legally sound and would be difficult to challenge in court. But policy analysts said such a move could erode international interest in investing in U.S. debt and lead to higher inflation.

Cullen Roche, founder of Orcam Financial Group in San Diego, was among the first to float the concept in the summer of 2011 on his website, "Pragmatic Capitalism."

"It's funny that it became as mainstream as it has," he said. "We were kicking the idea around as a joke."

[Confederate]

Nobody saw this coming.

[paulbot24]

I thought it was his idea.:eek:

[tttppp]

I thought it was a joke too. Some people are just stupid. It doesnt even sound like a rational idea. Its something a three year old would come up with.

[TheTexan]

I still think its a brilliant idea.

[puppetmaster]

end the fed congress

[itshappening]

The main problem with the idea is that the congress has to pass a law to put a face on the coin. The chance of them doing that are nil so it cannot happen.

Who would you put on as the face of the coin ?

[ghengis86]

Stupidest shit I've ever heard. If people don't laugh these cunts off the stage, you know they're idiots.

[kcchiefs6465]

Anyone who buys the debt on this trillion dollar platinum coin deserves to have their money taken. On a side note, I have rights to the Brooklyn bridge and will lease parcels to the highest bidder. Let's start the bidding at, ooohh, one trillion dollar platinum coin. Now that's a steal folks. You can't afford to miss out on an opportunity like this.

[kcchiefs6465]

The main problem with the idea is that the congress has to pass a law to put a face on the coin. The chance of them doing that are nil so it cannot happen.

Who would you put on as the face of the coin ?
Bernake/Greenspan hybrid. Ruby eyes and emerald teeth. I could see it now.

[Chester Copperpot]

this is old old news.... they could mint 16 of these coins and pay off the debt....


thats the original spin I heard on this story probably 20 years ago.

[Justinfrom1776]

The main problem with the idea is that the congress has to pass a law to put a face on the coin. The chance of them doing that are nil so it cannot happen.

Who would you put on as the face of the coin ?

Keynes

[Origanalist]

I should be stunned.

[Occam's Banana]

Hey! You guys shut up! You don't know what you're talking about!

Any day now we're gonna be invaded by the Elite Zaxylaxian Space Fleet from the Pleiades Star Empire!

We're gonna need a planet-wide Quantum Multi-Plexor Repulsor Sheild - and LOTS of Plutonium Q-36 Explosive Space Detonators!

And that's just to start with. Where do you think we're gonna get the money to pay for all that if we don't do this trillion-dollar coin thing, hmmmmm?

[Warrior_of_Freedom]

wow 5,000 signatures! That's some magnitude of support. That's like, 1/30th of the signatories of the Texas Secession petition.

[AGRP]

You know things are bad when jokes like this are seriously considered.

[James Madison]

$1 Trillion? Awesome...idea...what?!

Ah, fuck it! Let's make a $10 Trillion coin! Or a $100 Trillion coin! Then we can give out coins to every person in America. No more poverty!

[Origanalist]

Hey! You guys shut up! You don't know what you're talking about!

Any day now we're gonna be invaded by the Elite Zaxylaxian Space Fleet from the Pleiades Star Empire!

We're gonna need a planet-wide Quantum Multi-Plexor Repulsor Sheild - and LOTS of Plutonium Q-36 Explosive Space Detonators!

And that's just to start with. Where do you think we're gonna get the money to pay for all that if we don't do this trillion-dollar coin thing, hmmmmm?

You need people of vision to foresee these types of calamities. The Banana for President!

[TheTexan]

100 trillion quadrillion dollar coins. Is what we need.

[Occam's Banana]

You need people of vision to foresee these types of calamities. The Banana for President!

Thank you! I gratefully accept your nomination of me for Emper ... um, I mean, President.

Now, I have to warn everyone - I may have to assume dictato ... erm, I mean "extra-Constitutional" ... powers early in my administration.

But only for the duration of the crisis. I promise.

And it just so happens, I have some experience in overseeing the construction of interstellar navies in this price range ...

http://2.bp.blogspot.com/-fGyA8uePlQU/TtiXbwhPMdI/AAAAAAAAA8I/HpzSR1IE84I/s320/gdw-0.jpg http://2.bp.blogspot.com/_vBV-h_KWCNM/R3fRfLbAhkI/AAAAAAAAAAc/BcmQjxIU8m4/s400/FL-01aa.jpg

[Anti Federalist]

I wager 400 Quatloos.

[Brian4Liberty]

The main problem with the idea is that the congress has to pass a law to put a face on the coin. The chance of them doing that are nil so it cannot happen.

Who would you put on as the face of the coin ?

They would put Ron Paul on there. Just like Jefferson and Jackson.

[Brian4Liberty]

It's the monetarist's dream. It's just printing money. This way, they don't have to launder it through the Federal reserve and JP Sachs.

[kcchiefs6465]

They would put Ron Paul on there. Just like Jefferson and Jackson.
I'm pissed about Jackson being on the 20 dollar bill. Talk about adding insult to injury. I propose Ron Paul should be on a newly minted .999% gold coin. They'll probably put him on a trillion dollar bond...

[Drex]

Imagine finding one of those on the ground

[Origanalist]

Imagine finding one of those on the ground

Could you spend it?

[juleswin]

I still think its a brilliant idea.

Hehe, only if they coin 2 of em and give me one :)

[S.Shorland]

http://www.youtube.com/watch?v=1Hccfhwkpzk&feature=endscreen&NR=1

[ghengis86]

Why stop at $1 trillion?

QED

[oyarde]

The main problem with the idea is that the congress has to pass a law to put a face on the coin. The chance of them doing that are nil so it cannot happen.

Who would you put on as the face of the coin ? Hamilton.

[kcchiefs6465]

Could you spend it?
Yes. You just have to imagine yourself as wholly irresponsible and incredibly wasteful. I'd probably start an ale brewing company. I'd buy $7,322 coffee pots. My ass would not sit on anything less than $732 toilet seats bolted down with $2,300 bolts and $800 nuts. Of course they would need $800 wrenches to tighten the bolts. You can't just use a Craftsman for such important tasks. I would further lose a few or 15 billion. Literally lose it. I have a trillion dollar platinum coin though, so I'd make jokes when asked that, 'I might as well have thrown it out of an airplane for all I know what happened to the money.' Ahh, how nice it would be.

[Occam's Banana]

Trillion-dollar coins are like a bad penny ...

https://twitter.com/axios/status/1445375095262879756
1445375095262879756

[Anti Federalist]

Clown World: D.C. Elites Consider Minting ‘Trillion-Dollar Coin’ to Game Debt Limit

https://www.breitbart.com/economy/2021/10/06/clown-world-d-c-elites-consider-minting-trillion-dollar-coin-to-game-debt-limit/

Breitbart News 6 Oct 2021

WASHINGTON (AP) — Some politicians think they’ve found a silver bullet for the impasse over the debt limit, except the bullet is made of platinum: Mint a $1 trillion coin, token of all tokens, and use it to flood the treasury with cash and drive Republicans crazy.

Even its serious proponents — who are not that many — call it a gimmick. They say it is an oddball way out of an oddball accounting problem that will have severe consequences to average people’s pocketbooks and the economy if it is not worked out in coming days.

But despite all the jokes about who should go on the face of the coin — Chuck E. Cheese? Donald Trump, to tempt or taunt the GOP? — there’s scholarship behind it, too. However improbable, it is conceivable the government could turn $1 trillion into a coin of the realm without lawmakers having a say.

How is this possible when the treasury secretary can’t simply print money to pay public debts? It’s because a quirky law from more than 20 years ago seems to allow the administration to mint coins of any denomination without congressional approval as long as they’re platinum.

The intent was to help with the production of commemorative coins for collectors, not to create a nuclear option in a fiscal crisis. Oops.

Specifically, the law says the treasury secretary “may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”

This is that time, in the view of coin advocates. But Treasury Secretary Janet Yellen, the White House and some Democrats slapped down the idea Tuesday, just as past leaders have done when the going got tough and radical quick-fixes emerged.

“The only thing kookier would be a politically inflicted default,” Sen. Mark Warner, D-Va, said of the coin.

Said Yellen, “What’s necessary is for Congress to show that the world can count on America paying its debt.” A platinum coin, she told CNBC, “is really a gimmick.”

Sure it is, said Rohan Grey, a Willamette University law professor and expert on fiscal policy.

“The fact that (the coin) represents an accounting gimmick is a source of its strength, rather than a weakness,” Grey wrote in a 2020-21 study in the Kentucky Law Journal. “The idea of ‘fighting an accounting problem with an accounting solution’ is entirely coherent … the debt ceiling itself can be viewed as one big, poorly designed accounting gimmick.”

The United States will hit the ceiling Oct. 18 unless Congress acts in time to suspend it. The two parties are in a stalemate in the Senate — Republicans unwilling to join Democrats in what used to be a routine exercise; Democrats holding back on using only their own votes to fix the problem.

That’s what makes a shiny coin with a 1 and 12 zeroes tempting to some, if that untested and audacious path actually would work.

But fraught questions arise for lots of Democrats as well as Republicans: Would they have wanted President Donald Trump to be ordering up mega-coins like Diet Cokes to his desk? Do they want the next president to have that power? Or even this one?

Other extraordinary possibilities have been floated, too, such as invoking the 14th Amendment’s guarantee that the “validity of the public debt of the United States, authorized by law … shall not be questioned,” which some scholars argue could be used to override the debt limit.

The White House has looked at all such options “and none of those options were viable,” press secretary Jen Psaki said. “So, we know that the only path forward here is through Congress acting.”

The debt ceiling was instituted in the World War I era to make it easier for the U.S. to issue war bonds without needing congressional approval each time. Legislators only needed to stay under the approved total.

Raising or suspending the ceiling has been a mostly uncontroversial task until recent times, because the debt comes mostly from spending that has already been approved by Congress or covers payments mandated by law. Now everything is fodder for a fight to the last minute.

The Treasury can’t introduce new currency into circulation, only the Fed can do that. In theory, the coin would be minted and deposited with the Fed and its value would make its way into Treasury’s general account and used to pay a whole lot of bills.

In practice, no one knows precisely how it would work and what problems, like inflation, would result. Democrats do not seem willing to upend a messy process that for generations has nevertheless stood as the gold standard in global credit.

The idea of a $1 trillion coin got attention in 2013 when President Barack Obama struggled to get Republicans on board. Donald Marron, a tax policy expert who had led the Congressional Budget Office during part of the Bush administration, thought it wasn’t a great idea — but not a terrible one, either.

“Analysts have considered a range of other options for avoiding default, including prioritizing payments, asserting the debt limit is unconstitutional, and temporarily selling the gold in Fort Knox,” Marron said then. “All raise severe practical, legal, and image problems. In this ugly group, the platinum coin looks relatively shiny.”

Still, he said, it sounds like an Austin Powers sequel or a “Simpsons” episode: “It lacks dignity.”

[Occam's Banana]

In practice, no one knows precisely how it would work and what problems, like inflation, would result. Democrats do not seem willing to upend a messy process that for generations has nevertheless stood as the gold standard in global credit.

:blank: Was that supposed to be funny?


“Analysts have considered a range of other options for avoiding default, including prioritizing payments, asserting the debt limit is unconstitutional, and temporarily selling the gold in Fort Knox,” Marron said then. “All raise severe practical, legal, and image problems. In this ugly group, the platinum coin looks relatively shiny.”

Note that "spending less" is not among the options considered.


Still, he said, it sounds like an Austin Powers sequel or a “Simpsons” episode: “It lacks dignity.”

Dignity? Dignity? As compared to what? Spending like drunken sailors on shore leave?

[oyarde]

:blank: Was that supposed to be funny?



Note that "spending less" is not among the options considered.



Dignity? Dignity? As compared to what? Spending like drunken sailors on shore leave?

I think so . Oyardes credit rating agency rates all fiat as class D.