Time to Mint the Trillion-Dollar Coin, and Shove It Up Congress's Ass

[Yo_Mama_Been_Loggin]

Posted by Goldy on Fri, Dec 7, 2012 at 9:16 AM


I understand that using the debt ceiling to hold the nation hostage may be all the leverage they have, and if "they" were China, or Russia, or al Qaeda, or some other American adversary, that tactic might be perfectly reasonable. But "they" are the Republicans in Congress, and if they actually think they have something to gain politically by either forcing the nation into default or by shutting down the federal government, they are not just unpatriotic, they are fucking idiots.

Only Congress can raise the debt ceiling, and if Republicans choose not to, voters will know exactly who to blame for the consequences.

Of course, President Obama does have an out. I know all the serious people roll their eyes at the Trillion-Dollar Coin scenario, but it is legal, practical, and despite knee-jerk concerns to the contrary, no more inflationary than simply issuing more debt. It turns out, there are some problems you can just throw money at. Plus, unlike debt, taxpayers don't have to pay interest on the money. Such a deal!

http://slog.thestranger.com/slog/archives/2012/12/07/time-to-mint-the-trillion-dollar-coin-and-shove-it-up-congresss-ass

[KamaAina]

1. If he really wants to shove it up Congress' ass,

he'll put Reagan's face on it.

[cliffordu]

2. Now you're talking!!!!!

[bluestateguy]

3. I suspect Obama has something up his sleeve he is not telling us

Either the coin, the 14th Amendment or some unknown unknown. He says he will not negotiate over the debt the ceiling and increasingly I am coming to believe that he means business.

[DreamGypsy]

4. Great idea! Imagine buying a half gallon of milk at Superfresh with a $1,000,000,000,000 coin...

Last edited Mon Dec 17, 2012, 02:09 AM - Edit history (2)

...and waiting the 3 thousand years while the clerk counts out your change in $10 bills.

A bit more detail on the coin idea here: The Trillion-Dollar Coin Is Back

Here's what Chris Krueger of Guggenheim wrote in a note (which also details three other alternative policy options for dealing the debt ceiling):

This is even more theoretical than the Constitutional Option, though some argue that it is a stronger legal option. There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper. BUT, the Treasury has broad discretion on coins made from platinum. The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins. The President would then order the coins deposited at the Fed, who would then put the coin(s) in the Treasury who now can pay all their bills and a default is removed from the equation. The effects on the currency market and inflation are unclear, to say the least. You would also likely trigger a wave of lawsuits similar to the Constitutional Option and create two tranches of treasuries. Both this option and the Constitutional Option are VERY low probability options.