America to Mint a Trillion Dollar Coin?

[Tonington]

No they don't. They don't have to. They do so in practice to manage inflation, but as they're pretty mcuh at the zero bound, the risk of default is greater than the risk of some inflation.

If the US wants to get out of debt, then Congress shouldn't pass a budget that they can't afford to pay. If the US defaults, the consequences are far worse than some more debt which the US has up until now always been able to pay for.

 

[JLM]

The idea, backed by Nobel- Prize-winning economist Paul Krugman, is for Obama to order minted a trillion-dollar platinum coin to be deposited in the American Treasury. The Treasury would have cash to end run any Republican-Congressional attempt to block funds needed to run government programmes.
Seems logical.

#MintTheCoin NOBEL PRIZE WINNER PAUL KRUGMAN: Obama Must Get Ready To Mint The Trillion Dollar Coin - Business Insider

Reaction?

Who is going to pay for it?

 

[PoliticalNick]

No they don't. They don't have to. They do so in practice to manage inflation, but as they're pretty mcuh at the zero bound, the risk of default is greater than the risk of some inflation.

If the US wants to get out of debt, then Congress shouldn't pass a budget that they can't afford to pay. If the US defaults, the consequences are far worse than some more debt which the US has up until now always been able to pay for.

They don't have to according to the constitution but they do have to according to the federal reserve act. Bit of a catch 22. Until they abolish the (not really federal) federal reserve they have to issue the bonds to the fed to produce any new money.

 

[Spade]

Coins Against Crazies

 

[Tonington]

They don't have to according to the constitution but they do have to according to the federal reserve act.

Care to quote the clause?

 

[PoliticalNick]

Care to quote the clause?

Feel free to read the Federal Reserve Act at your leisure. I'm a little busy at work right now.

 

[Angstrom]

Lol What's the next big number after a trillion? Might as well get started on the design for that coin too.

 

[Tonington]

Feel free to read the Federal Reserve Act at your leisure. I'm a little busy at work right now.

I searched it. It doesn't say anything about the activity described in US Code which allows the Treasury Secretary to authorize the minting of platinum coins. I'm not prepared to take you at your word that it does, so I was hoping you would provide some evidence for your assertion of what the Federal Reserve Act says on this matter. The issuing of comemorative coins is not backed by bonds. That's the law we're talking about.

 

[Spade]

A $100 Bill Is Just as 'Impossible' as a Trillion Dollar Coin

 

[JLM]

Lol What's the next big number after a trillion? Might as well get started on the design for that coin too.

tri, quad, quin, sex, sept. etc. etc.

 

[PoliticalNick]

I searched it. It doesn't say anything about the activity described in US Code which allows the Treasury Secretary to authorize the minting of platinum coins. I'm not prepared to take you at your word that it does, so I was hoping you would provide some evidence for your assertion of what the Federal Reserve Act says on this matter. The issuing of comemorative coins is not backed by bonds. That's the law we're talking about.

A comemorative coin has no tenable cash value and is not legal tender.

 

[Spade]

It's not commemorative. It's a coin of the realm.

 

[damngrumpy]

That certainly makes the payments easier, twenty of those and the debt is paid off.

 

[Spade]

As long as the debt is held in American coin,sure!

 

[damngrumpy]

It's America they can do what they want

 

[PoliticalNick]

So if the US (and Canada) is a corporation, why don't they do like other businesses and declare bankruptcy, restructure, and open again under a different name without the debt.

 

[Spade]

Name change not required...
Which Country Goes Bankrupt Next? (Hint: It's Not Who You Think) - DailyFinance

 

[Highball]

I'll bet that in my life time the US qwill never fix its serious financial issues. No one wants to seriously take an in depth look at just how severe the problem is. Picture a firm like Micro Soft being bankrupt and that is but a small glimpse. Then ad GE to that photo and it would still not equal the enormity of this problem.

 

[JLM]

I'll bet that in my life time the US qwill never fix its serious financial issues. No one wants to seriously take an in depth look at just how severe the problem is. Picture a firm like Micro Soft being bankrupt and that is but a small glimpse. Then ad GE to that photo and it would still not equal the enormity of this problem.

I'm not sure their financial issues are serious given today's standards of conducting business and the propensity for "spending money you don't have". They arrived at this situation one dollar at a time, no one is starving to death through necessity........when they can no longer meet the interest payments on the debt then something will have to give. (I would think there are big chunks of Alaska and Wyoming they could rent out for a little extra cash.)

My guess would be Somalia has worse financial problems.

 

[Spade]

Well, it all has to do with how the problem is defined. If you cannot borrow because you have acne or the plague and are therefore considered a poor risk, and as a consequence no one has leant you any money, the banks aren't going to come after you, or the mob. No problem!
If you were Mr. Kleanshirt and banks, and the mob, bent over backwards to lend you cash, and slowly it was discovered that you neither had the ability nor the intention to repay, then by Keericed you have a problem, and the banks have a problem, and the mob.