18 ms·
Trillion-dollar platinum coin could be minted at the last minute
- SV_BubbleTime 5y agoSure, ok, if we’ve completely dropped the facade… why not make it a $2 trillion dollar coin? Maybe we get a powers of two economy and my binary skills become very handy outside of embedded programming.
- deleted 5y ago[deleted]
- csdvrx 5y agoWhy stop there? Let's make it a $10 trillion coin!
- ravenstine 5y agoTrillions are so mundane, now. Why not a quadrillion?
- jtbayly 5y agoPrecisely. If there is really no effect on inflation, as the ending quote claims, then why bother making it so small?
- djur 5y agoIt was originally an arbitrary number picked by the person who came up with the idea. In practice, the only reason to make it a relatively low value rather than a septillion is because the White House would want to be in a position to argue that it was an emergency action to ensure continued compliance with the debt limit, the Impoundment Control Act, and the 14th Amendment. Their position would continue to be that it is Congress' responsibility to approve enough borrowing to fulfill their spending mandates, rather than that the President can unilaterally abolish the debt limit (which would itself be unconstitutional).
- andrewla 5y agoI think the logic of a trillion dollar coin is that it will prevent the debt ceiling from being a crisis for a couple of election cycles, long enough for Congress to get their act together and remove one leg of the trilemma that they have created, but not so long as to make them not have to deal with it at all.
- GDC7 5y agoWhy a coin? It has to be a note because the coin+platinum could be a PR nightmare as people would do the math and realize that the amount of platinum in the coin is not worth 1 trillion dollars. I know that even for small coinage the value we assign to them is arbitrary, but for the public it doesn't matter because it's just change. If they want to use this solution they need to print a 1 trillion note, that would be in line with the arbitrarily assigned value to the smaller denomination notes.
- thatguy0900 5y agoWhen was the last time we used coinage that was actually worth its face value? Seems meaningless to me
- GDC7 5y agoAs I said there is a difference between 1$ and 1 trillion. People don't question the face value of 1$ given the fact that it's cheap change.
- Ancapistani 5y agoOur current coins in regular circulation are basically worthless in terms of metal content. On the other hand, US Mint-produced $50 gold eagles contain ~$1,800 of gold. Political opinions aside, it seems obvious to me that the value of the metal content of US coinage is unrelated to the face value.
- GDC7 5y agoNobody cares about 1$ coins, people would care about a 1T$ coin.
- JadeNB 5y ago> Our current coins in regular circulation are basically worthless in terms of metal content. On the other hand, US Mint-produced $50 gold eagles contain ~$1,800 of gold. That sounded so ludicrous that I thought you must be mistaken or exaggerating, but, as with all things currency-related, I think it's impossible to out-absurd the reality. https://en.wikipedia.org/wiki/American_Gold_Eagle#Value https://en.wikipedia.org/wiki/American_Gold_Eagle#Value
- jjk166 5y agoCan someone explain why minting a platinum coin is in any way more effective than writing "IOU $1 Trillion" on a napkin?
- thedudeabides5 5y agoBecause the 'ping' sound it makes as the coin hits the ground is much, much more satisfying than 'brrrrrr'
- mkr-hn 5y agoIt's also much harder to slide a napkin into a payphone on a string and pull it back out to bankrupt the phone company.
- wcoenen 5y agoThe goal here is to circumvent the debt ceiling. Writing a $1T IOU would add $1 trillion to the liability side (i.e. debt) of the bookkeeping (and presumably also to the asset side in the form of an addition to a federal reserve account), while minting a $1T coin only adds it to the asset side.
- Uehreka 5y agoSo then why not a note? And is there a rule somewhere that a physical thing needs to be minted at all?
- wcoenen 5y agoIt has to be a platinum coin because subsection (k) of https://www.law.cornell.edu/uscode/text/31/5112 https://www.law.cornell.edu/uscode/text/31/5112 is the special case that allows for issuing any denomination. Notes are a liability of the Federal Reserve. Meaning they can be traded for balance on a Federal Reserve account. The treasury can't just create liabilities for the Fed out of thin air, I mean that would be wrong ;-) (edit: just joking. The $1T coin would also be deposited at the Federal Reserve. I don't know why it can't be a note, other than that's how the law was written.)
- deleted 5y ago[deleted]
- brundolf 5y agoThe entire story here is wildly bizarre. The fact that the honest-to-god solution to anything in today's world is to have a mint at the ready, just in case you need to swiftly stamp a coin of arbitrary value and then transport it with haste by helicopter to a particular location in time to keep the national economy on track is just completely bonkers.
- dmarchand90 5y agoMakes me think of the Simpsons episode where the US government prints a trillion dollar bill https://youtu.be/_KgHy3Pi5Yw https://youtu.be/_KgHy3Pi5Yw
- jesuslop 5y agoApropiate. Also, Burns: "Priceless coins not used in vending machine. Yes, not bad." https://frinkiac.com/caption/S11E12/1184960 https://frinkiac.com/caption/S11E12/1184960
- rightiousrob 5y agoWell said
- deleted 5y ago[deleted]
- BelenusMordred 5y agoPut so honestly in that way it reads like something out of Hitchhikers Guide to the Galaxy. The utter absurdity of it all.
- kazinator 5y agoIt's not even half as bizarre as someone buying a GIF of some cartoon cats as a sort of cryptocurrency token.
- JadeNB 5y ago> It's not even half as bizarre as someone buying a GIF of some cartoon cats as a sort of cryptocurrency token. I think it is considerably more bizarre. People have always done strange things with their money; NFTs have made it maybe more visible, and have certainly dressed it up in new tech-y buzzwords, but they've hardly introduced the idea of spending money in strange and stupid ways. But I am considerably more upset about whole countries' economies being founded on strange and stupid decisions than I am on individuals making such decisions. (Which is not to say that I could, or know how to, do any better; we're just comparing bizarre-ness, not solutions.)
- htrp 5y agoWelcome to Debt Ceiling Shenanigans.... Waiting for Fast and the Furious 14 where the crew have to steal this coin.....
- deleted 5y ago[deleted]
- teachrdan 5y ago"I don't got inflation... I got family."
- modeless 5y agoIt's fun to imagine what the value of it would be on the open market. I mean, it's not like anyone could spend it. "Do you have change for a trillion?" The value would be limited to what a black market coin collector would be willing to pay, I suppose.
- blacktriangle 5y agoI just read that as "fiat currency has failed."
- deleted 5y ago[deleted]
- ceejayoz 5y agoYou can read it that way. I read it as "fiat currency is more resilient in certain scenarios".
- djur 5y agoThe minting of the coin has literally nothing to do with the performance of the USD as currency. It is an accounting trick to work around broken legislation.
- curtis3389 5y ago> without any impact on inflation This seems like quite the assertion. Anyone want to explain how minting $1 trillion will definitely not have any impact on inflation?
- horsawlarway 5y agoI'd assume the thought is that the coin is not fungible in any meaningful way. It's not going to enter the monetary supply, it's more of a loophole to avoid debt ceilings. Now whether avoiding debt ceilings has an impact on inflation is up for debate (my vote is that it will, but I also don't like the debt ceiling in the first place)
- plutonorm 5y agoBut it erodes faith in the currency and that is, ultimately, what gives it value.
- djur 5y agoA debt default or a sudden halt of US government spending, both resulting in economic collapse, would both be much more effective at eroding faith in the value of the US dollar.
- horsawlarway 5y agosure, but as an outsider looking in - the thing that erodes my faith in the currency is not the minting of a trillion dollar coin, it's the complete disfunction of governance that leads to a situation where this is even considered. And the harm is already done on that front. This is relatively low impact compared to other shenanigans.
- djur 5y agoIt won't enter the money supply. If there's an effect on inflation, it will be from the borrowing and spending (already authorized by Congress) that the $1 trillion coin allows to proceed.
- erentz 5y agoCongress mandate the spending, that’s their job. The executive is then legally required to implement the spending Congress mandates in its budgets. That’s it’s job. the executive is not allowed to not spend what Congress tells it to spend. But Congress at the same time wants to have a silly law that tries to prohibit the executive from doing what it’s required to do in our system of government. So in that case minting a coin actually seems to be what is required of the executive. It’s the only legal route out. This is all a farce.
- kemayo 5y agoYou can certainly construct a reasonable argument that (a) the executive is required to do everything possible/legal before failing to fulfill the budget, and (b) Congress has been aware of the coin loophole for years and has declined to close it, so (c) the executive is basically-required to try the coin before defaulting. It's silly, but mostly as a representation of how the underlying situation is ridiculous.
- djur 5y agoThat's certainly how I interpret things. Either that or the debt ceiling is simply unconstitutional under the 14th Amendment section 4. If Congress makes contradictory laws that the President cannot obey without violating the Constitution, the Constitution takes precedence.
- Ancapistani 5y ago> "Voila, we'd have bought ourselves the equivalent of a trillion-dollar increase in the debt limit, without any impact on inflation," says Diehl. > without any impact on inflation This strikes me as absurd. Putting it on the other side of the balance sheet doesn't change its impact on the overall economy.
- lostgame 5y agoI’m reminded of Zimbabwe (I believe?) and their hundred trillion dollar bills - some of which I still have somewhere. It’s insane to think that’s how inflated their economy became.
- kemayo 5y agoThis is silly, but only about as silly as the entire debt ceiling issue. So they might as well go for it. For those of you not paying attention or who are from less-silly countries, the USA has a two-part spending process. First, congress passes a budget that directs how the government is going to spend money. Second, congress authorizes the government to borrow money if needed in order to fund said spending. This, yes, means that congress first votes on whether to spend enough that we'll need to borrow money, and then votes on whether we're allowed to borrow the money that's needed for the spending they legislated. Once congress has passed the budget, it's (essentially) a law that requires that the money be spent, so those responsible for using the money literally aren't allowed to e.g. trim programs to make sure we come in under the debt limit.
- deleted 5y ago[deleted]
- aghilmort 5y ago$1T coin in case feds wimp out, piping hot on OpenSea, https://opensea.io/assets/0x495f947276749ce646f68ac8c248420045cb7b5e/65062453917073833051410799490443377251198534057086150724416449559380212318209/ https://opensea.io/assets/0x495f947276749ce646f68ac8c2484200...
- phrz 5y agoHey, thanks for the free image! It's very high quality.
- mikewarot 5y agoThe Democrats are playing chicken with a stone wall, it is self sabotage of the highest order. If they fail to stop in time, they're merely hastening the demise of the Petrodollar.