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A trillion-dollar coin could be minted within hours of an emergency decision
- suction 5y agoParker: A trillion dollar coin isn't cool. You know what's cool? A quadrillion dollar coin.
- andrewclunn 5y agoCapitalism, communism, democracy, authoritarianism, if the money is fake, the votes are rigged, and the leaders are little more than front men, is there any difference?
- headShrinker 5y agoThere is no difference. There is no difference whether you are alive or dead. If you are dead you wouldn't know it. See, fatalism and moral ambiguity works in all different ways. Fun!
- smt88 5y agoThis is not about cryptocurrency for once. It's about a way to work around Congress to raise the debt ceiling. Interestingly, the workaround involves minting an official, physical coin worth $1T: > "The swiftness of creating a $1 trillion coin could serve as an extreme last-minute option if Congress failed to raise the debt ceiling before the Treasury runs out of money on October 18."
- tengbretson 5y agoThe value obviously has nothing to do with the material choice, so why don't they just print it out of PLA?
- gnicholas 5y agoThe law specifically refers to a coin of any denomination, minted in platinum. It apparently said "bullion" prior to 2000. https://en.wikipedia.org/wiki/Trillion-dollar_coin https://en.wikipedia.org/wiki/Trillion-dollar_coin
- h2odragon 5y agoLegal technicalities about what values can be put on what type of coin. The sovereign citizens and anti- Federal Reserve folks had fun with the idea in the 90s too.
- da_big_ghey 5y agoAnd we were told these ideas were rediculous, look now what we are seeing though.
- verall 5y agoBecause the law says that platinum coins may be minted with an arbitrary value and says nothing about coins made of PLA. Sorry, was your question rhetorical?
- bananabiscuit 5y agoProbably not rhetorical, I don’t think most people know about what obscure laws that make these kinds of loopholes work. I’m actually surprised you thought it was common enough knowledge that you suspected the question was rhetorical.
- detaro 5y agoIt's mentioned in the article.
- verall 5y agoIt is the subject of the article. My best faith reading of the original comment was that it decries the arbitrary nature of platinum - if we are calling it a $trillion, why not make it out of anything? But the debt ceiling is itself a legal construction. People call it a "loophole" because of episodes of The Simpsons or whatever but the Treasury is explicitly given permission to issue coins of arbitrary value. The debt ceiling is itself a legal construction.
- dreadlordbone 5y ago31 U.S.C. 5112(k) as originally enacted by Public Law 104-208 in 1996: The Secretary may mint and issue bullion 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.
- jagrsw 5y agoThis is a bit a bike-shedding discussion/topic, no? The amount of national (fiscal?) debt is a matter of accounting, and not physical paraphernalia.
- Calavar 5y agoIt's a legal loophole. The Treasury can't issue bonds to pay for government expenses until Congresss approves a budget. But president can mint coins without Congress's authorization. A trillion dollar coin would easily cover government expenses for the next several months.
- khuey 5y agoThe issue isn't approving or not approving a budget. The issue is that Congress has simultaneously passed budgets saying to spend enough money to rack up X dollars in debt, and passed laws saying the government may issue no more than Y dollars in debt, and X > Y.
- gruez 5y agoWhy is this even an issue? Is it harder to pass a "raise debt limit" motion than it is to pass the budget? Did people who pass the budget a few months ago get buyer's remorse?
- toss1 5y ago>> Is it harder to pass a "raise debt limit" motion than it is to pass the budget? Ordinarily, NO, as this is passed in the normal course of business - this merely authorizes the issuance of debt instruments to finance the spending that was previously authorized. But, now the answer is YES, when one party has decided to exploit this legal quirk separating the spending from the issuance of debt to execute a DOS attack on the other party currently in power. >>Did people who pass the budget a few months ago get buyer's remorse? Yes, since they are no longer in the driver's seat, they want to execute a DOS on the other party now in the driver's seat, and they don't care if it crashes the country or global economy, as they think they won't be blamed and the other party will. It really is as simple as that, putting party over country.
- Proven 5y agoThey could release a fxxing NFT in 10 seconds. It'd be worthless either way. The US government and Federal Reserve are running a legal Ponzi scheme.
- corey_moncure 5y agoWhat if we stopped spending $3.8 trillion on ineffective healthcare, or $1.2 trillion on welfare instead? Or just reduced our spending on those proportionally to save the $1 trillion?
- jzebedee 5y agoIgnoring the ghoulish suggestion entirely, this misses the point of the debt ceiling crisis. The debt ceiling has zero effect on spending, it's servicing the debt for spending that already happened. You don't fix what you spend on your credit card by not paying the bill.
- da_big_ghey 5y agoSpend less now so we can use the saved money for paying off old spending?
- SideburnsOfDoom 5y agoThat is in fact how household budgets work. That is not how government budgets work, at all. For starters, payment within a household budget are not typically to other members of the same household. The house's mortgage debt isn't to another person resident there, the groceries aren't bought from an household member. Payments within a country are. It's circulation of money within the entity, not income and outgo. And a household does not own their own bank to manage the circulation. https://theconversation.com/why-the-federal-budget-is-not-like-a-household-budget-35498 https://theconversation.com/why-the-federal-budget-is-not-li... https://positivemoney.org/2018/10/a-government-is-not-a-household/ https://positivemoney.org/2018/10/a-government-is-not-a-hous... https://www.forbes.com/sites/francescoppola/2018/04/30/governments-are-nothing-like-households/?sh=58e536cc54f8 https://www.forbes.com/sites/francescoppola/2018/04/30/gover...
- PhileinSophia 5y agoDid you learn this in your AP econ class? Logic doesn't go out the window once you get to government scale.
- aww_dang 5y agoThe trillion dollar platinum coin has been proposed on other occasions, but never minted. Last I checked, platinum was trading at around 30-31 dollars a gram, roughly half that of gold. The presumption is that the coin will be 1 troy ounce or about 31g. Hyperinflation from reckless debt monetization isn't unprecedented. When it does occur, it tends to quickly spiral out of control. Let us assume for the sake of discussion that there are some responsible people within these institutions who would like for these platinum coins to act as an actual asset, a backstop against a total devaluation of the dollar. What would a reasonable weight of a trillion dollar platinum coin be?
- wavefunction 5y agoReasonable weight? Something that won't blow away in the wind.
- jaywalk 5y agoOur money hasn't been backed by physical metals for a very long time. The coin would be purely symbolic, being made of platinum only because the law allows platinum coins to be minted in any denomination.
- aww_dang 5y agoYes, that much is obvious. Please understand that I was posing a hypothetical.
- khuey 5y agoThe seigniorage is the entire point of the exercise.
- Geee 5y agoThe idea is to mint a worthless coin that has face value of $1 trillion. That way, the coin has one trillion dollars of seigniorage, i.e. profit for government, and the coin could be deposited to Federal Reserve treasury instead of issuing debt. In other words, they would be issuing new money by debasing the dollar, without generating debt in their balance sheet. It's like issuing one trillion worth of cash, which is backed with just one worthless platinum coin. It's not really different from just issuing debt that isn't paid back, but this way they don't have to raise the debt limit. Shenanigans like this will completely erode the trust in the value of dollar.
- celim307 5y agoSo simpsons predicts it yet again
- quaffapint 5y agoIt's like they have a time machine. For those not aware, here's the clip in question... https://www.youtube.com/watch?v=_KgHy3Pi5Yw https://www.youtube.com/watch?v=_KgHy3Pi5Yw
- mjklin 5y agoHere, trilly trilly…
- k__ 5y agoWhy do they need that coin to raise their dept limit? Who gets the coin?
- bananabiscuit 5y agoNot sure why your being downvoted. Nothing about this makes any sense, I don’t think your questions have obvious answers unless you already knew how it works.
- jfengel 5y agoThey don't need the coin to raise the debt limit. They need the coin to get around the failure to raise the debt limit. The coin goes to the Federal Reserve, the government's bank. Then the government has money on deposit at the bank, and can write checks for the things that the Congress has already budgeted. Ordinarily they would just sell bonds to the Federal Reserve, which is exactly the same thing. There's a law preventing them from doing that above the authorized debt limit. But there's another law allowing them to mint coins -- which are the same thing, except made out of metal. It would be much easier if Congress would just allow them to borrow the money to spend on the things Congress already ordered them to do. But as a matter of political grandstanding, parts of Congress are standing on the rules... so the President will stand on different rules.
- cblconfederate 5y agoWhy does it take so long?
- coding123 5y agoWhat happens if someone steals this coin?
- SideburnsOfDoom 5y agoNot much. Since it's unique, how would you profit from that theft without being provably in receipt of stolen goods?
- acheron 5y agoObviously this is absurd, but the Treasury doing absurd things with loopholes is not new. Example: the $100 United States Notes. Before all paper money became Federal Reserve Notes, some was legally required to be "United States Notes", which were direct obligations of the US Treasury (as opposed to coming from the Federal Reserve system). Before the 1970s $2s and $5s were issued as USNs, with a red seal instead of the green seal of FRNs (or the blue seal of Silver Certificates, which had a slightly different legal authorization and obligation). When the concept of redeeming paper money for silver ended in the 1960s, USNs became irrelevant, and the $2 and $5 USNs were pulled from circulation and eventually reissued as FRNs. But the treasury still had the legal requirement to circulate a certain dollar amount in USNs. So they printed up a bunch of $100 USNs, stuck them in boxes, and occasionally carted them around between different bank vaults, which technically met the definition of "circulate". This went on until 1994, when Congress finally repealed the law requiring the USN circulation. https://en.wikipedia.org/wiki/United_States_Note https://en.wikipedia.org/wiki/United_States_Note
- ianleeclark 5y ago> Obviously this is absurd Default seems a bit more absurd. Gotta keep the machine running one way or another.
- panarky 5y ago> Obviously this is absurd What's even more absurd is that Congress can approve trillions in tax cuts and new spending over the last four years, and then just refuse to pay for what they already approved.
- jeffdn 5y agoWell, and in the same vein, that Congress has essentially become a zero-sum game, where one party attempts to cut taxes, slash regulation, and prevent the government from paying for anything except for a larger military. The idea that the government doing anything except for defending the country is socialism is patently absurd, and the fact that so-called respectable people, in large numbers, keep parroting the idea is toxic for democracy. Marco Rubio, for instance, has called Biden's policy agenda Marxist -- this coming from a man who has spent his political career agitating against normalizing diplomatic relations with Cuba. Conflating the two makes Cuba's government look more benign than it is, and makes the American government look more extreme than it is.
- coding123 5y agoThe other funny thing about this whole thing, is... who gets that coin after it's printed? We're literally giving it to China. I mean you don't create a coin without having someone to give it to.
- simonblack 5y agoA trillion-dollar coin is 'magical thinking'. It doesn't get past the problems of having exploding debt and no way to fix it. Otherwise known as 'Kicking the can down the road." All of these smart-ass solutions are leading inexorably to a lack of confidence by the world in the US Dollar. When that happens, you can produce billions of these 'Trillion-Dollar Coins' and it won't make the slightest bit of difference in the 'New Zimbabwe' currency.
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