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It'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 Con

It'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 ago
The 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 ago
  Why 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.
    - gruez 5y ago
      >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. But the party in power has 50 + tie-breaking VP vote? What gives?
      - deleted 5y ago
        [deleted]
      - weeblewobble 5y ago
        It takes 60 votes to break a filibuster (which the GOP has promised to do on a debt ceiling vote). It only takes 51 votes to change the filibuster rules, but at least 2 Democratic Senators oppose that, so we're kind of stuck.
      - toss1 5y ago
        See: Filibuster [1] 60 votes are required to break the filibuster in the Senate, and whatever their private ideas (e.g., I've seen reports from credible sources that no less than 44 R Senators personally support raising the debt ceiling), there are apparently zero R votes to go against their leader and end the filibuster. Interesting times. [1] https://en.wikipedia.org/wiki/Filibuster https://en.wikipedia.org/wiki/Filibuster
    - was8309 5y ago
      Sadopopulism
988747 5y ago
It would also destroy the confidence in US Dollar worldwide, provide further proof that Biden is indeed an idiot, and basically pushed the US to the slippery slope, that ends with the US economy being in the same condition as Venezuelan.
- hellojesus 5y ago
  I'm honestly surprised the above hasn't happened with Yellen coming out and telling everyone that the US will default on its debt if it can't borrow more money to pay back the people it already borrowed from. Peter Schiff has touched on this, but who in the world is willing to lend to the US at the moment when the US just came out on record as running the biggest ponzi scheme ever?
  - headShrinker 5y ago
    Peter Schiff is a broken clock that was right once in the last 20 years. Even broken clocks are right twice a day.
    - hellojesus 5y ago
      He has been arguing mostly the same points for the past decade, but at least he's been consistent. The old saying comes to mind, "Markets can remain irrational longer than you can stay solvent." I wanted to believe in MMT; it sounded at first like it could be something completely counterintuitive that just works, and some time later a rational quantity of math would explain it. At the present, I think that was too wishful. The US seems to be able to print unlimitedly because of its unique status as the reserve currency. Once other countries opt out, and some are making concrete steps towards doing so, our dollar will quickly collapse, and it'll take the rest of our lives to experience a quality of living akin to today's.
- headShrinker 5y ago
  > It would also destroy the confidence in US Dollar worldwide, No it wouldn't > provide further proof that Biden is indeed an idiot, Idiot or not, the coin is actually a solid move. > and basically pushed the US to the slippery slope, Nope. > that ends with the US economy being in the same condition as Venezuelan. TF?! Not at all. You do not belong in this conversation. You have no clue what you are talking about.
treeman79 5y ago
Why stop at one coin? Print a wheelbarrow full of them. Surly nothing could go wrong with that.
- headShrinker 5y ago
  The difference between is smart argument and a straw man is nuance. You have none.
- dragonwriter 5y ago
  > Why stop at one coin? Because the coin can be any arbitrary amount, and its only use will be to redeem federal debt held by the Federal Reserve. Using multiple coins serves no purpose.
  - treeman79 5y ago
    It’s printing money. Same scenario that leads to ultra inflation. The sort where a wheelbarrow is more valuable then the money it holds. Sure this time it may used as an accounting trick. But it also frees government to spend recklessly until current money is worthless.
    - dragonwriter 5y ago
      > It’s printing money Substantively, its not when its used to redeem Fed-held government debt. The money creation involved happened when the Fed created money to buy the debt (and, lo and behold, did not produce ultrainflation); interaction between two hands of the money-issuing government isn't substantively “money creation”, its accounting gimnicks with a platinum token. > Sure this time it may used as an accounting trick. But it also frees government to spend recklessly until current money is worthless. No, the law authorizing it already frees government to do that (and, more generally, the Constitutional power of creating money.) There are procedural constraints, like the budget and the Constitutional assignment of power over it, which prevent the executive willy-nilly spending such money having minted it (unlike, say, the Fed’s money creating powers, where it can spend all the money it creates fairly freely, which is how it bought the debt it now holds.) This is really a non-issue; its one of the clearly-legal routes around the stupid, contradictory (with mandated spending in the budget), counterproductive, and probably constitutionally null at least insofar as it purports to constrain later-mandated spending, and possibly more generally, debt ceiling without openly defying it. A less legally clear method is just to treat it as the complete legal nullity it may be and ignore it completely. In many ways, I think that's the best option, but effectively “mint the coin” is no different in substance.
dragonwriter 5y ago
> The Treasury can't issue bonds to pay for government expenses until Congresss approves a budget. Congress has approved a budget not merely authorizing but legally mandating spending and necessary borrowing to finance it. It has also imposed a debt ceiling, purportedly prohibiting borrowing beyond a certain amount. Minting the coin is one way of using an unquestionably legal power to resolve the conflict of mandates. Another option is to simply ignore the debt limit because it conflicts with the budget mandate (and, given existing obligations, the 14th Amendment’s debt clause.) > But president can mint coins without Congress's authorization Only platinum coins. For...reasons that are mostly irrelevant.

khuey 5y ago

The 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 ago
Why 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.
  - gruez 5y ago
    >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. But the party in power has 50 + tie-breaking VP vote? What gives?
    - deleted 5y ago
      [deleted]
    - weeblewobble 5y ago
      It takes 60 votes to break a filibuster (which the GOP has promised to do on a debt ceiling vote). It only takes 51 votes to change the filibuster rules, but at least 2 Democratic Senators oppose that, so we're kind of stuck.
    - toss1 5y ago
      See: Filibuster [1] 60 votes are required to break the filibuster in the Senate, and whatever their private ideas (e.g., I've seen reports from credible sources that no less than 44 R Senators personally support raising the debt ceiling), there are apparently zero R votes to go against their leader and end the filibuster. Interesting times. [1] https://en.wikipedia.org/wiki/Filibuster https://en.wikipedia.org/wiki/Filibuster
  - was8309 5y ago
    Sadopopulism

988747 5y ago

It would also destroy the confidence in US Dollar worldwide, provide further proof that Biden is indeed an idiot, and basically pushed the US to the slippery slope, that ends with the US economy being in the same condition as Venezuelan.

hellojesus 5y ago
I'm honestly surprised the above hasn't happened with Yellen coming out and telling everyone that the US will default on its debt if it can't borrow more money to pay back the people it already borrowed from. Peter Schiff has touched on this, but who in the world is willing to lend to the US at the moment when the US just came out on record as running the biggest ponzi scheme ever?
- headShrinker 5y ago
  Peter Schiff is a broken clock that was right once in the last 20 years. Even broken clocks are right twice a day.
  - hellojesus 5y ago
    He has been arguing mostly the same points for the past decade, but at least he's been consistent. The old saying comes to mind, "Markets can remain irrational longer than you can stay solvent." I wanted to believe in MMT; it sounded at first like it could be something completely counterintuitive that just works, and some time later a rational quantity of math would explain it. At the present, I think that was too wishful. The US seems to be able to print unlimitedly because of its unique status as the reserve currency. Once other countries opt out, and some are making concrete steps towards doing so, our dollar will quickly collapse, and it'll take the rest of our lives to experience a quality of living akin to today's.
headShrinker 5y ago
> It would also destroy the confidence in US Dollar worldwide, No it wouldn't > provide further proof that Biden is indeed an idiot, Idiot or not, the coin is actually a solid move. > and basically pushed the US to the slippery slope, Nope. > that ends with the US economy being in the same condition as Venezuelan. TF?! Not at all. You do not belong in this conversation. You have no clue what you are talking about.

treeman79 5y ago

Why stop at one coin? Print a wheelbarrow full of them. Surly nothing could go wrong with that.

headShrinker 5y ago
The difference between is smart argument and a straw man is nuance. You have none.
dragonwriter 5y ago
> Why stop at one coin? Because the coin can be any arbitrary amount, and its only use will be to redeem federal debt held by the Federal Reserve. Using multiple coins serves no purpose.
- treeman79 5y ago
  It’s printing money. Same scenario that leads to ultra inflation. The sort where a wheelbarrow is more valuable then the money it holds. Sure this time it may used as an accounting trick. But it also frees government to spend recklessly until current money is worthless.
  - dragonwriter 5y ago
    > It’s printing money Substantively, its not when its used to redeem Fed-held government debt. The money creation involved happened when the Fed created money to buy the debt (and, lo and behold, did not produce ultrainflation); interaction between two hands of the money-issuing government isn't substantively “money creation”, its accounting gimnicks with a platinum token. > Sure this time it may used as an accounting trick. But it also frees government to spend recklessly until current money is worthless. No, the law authorizing it already frees government to do that (and, more generally, the Constitutional power of creating money.) There are procedural constraints, like the budget and the Constitutional assignment of power over it, which prevent the executive willy-nilly spending such money having minted it (unlike, say, the Fed’s money creating powers, where it can spend all the money it creates fairly freely, which is how it bought the debt it now holds.) This is really a non-issue; its one of the clearly-legal routes around the stupid, contradictory (with mandated spending in the budget), counterproductive, and probably constitutionally null at least insofar as it purports to constrain later-mandated spending, and possibly more generally, debt ceiling without openly defying it. A less legally clear method is just to treat it as the complete legal nullity it may be and ignore it completely. In many ways, I think that's the best option, but effectively “mint the coin” is no different in substance.

dragonwriter 5y ago

> The Treasury can't issue bonds to pay for government expenses until Congresss approves a budget. Congress has approved a budget not merely authorizing but legally mandating spending and necessary borrowing to finance it. It has also imposed a debt ceiling, purportedly prohibiting borrowing beyond a certain amount. Minting the coin is one way of using an unquestionably legal power to resolve the conflict of mandates. Another option is to simply ignore the debt limit because it conflicts with the budget mandate (and, given existing obligations, the 14th Amendment’s debt clause.) > But president can mint coins without Congress's authorization Only platinum coins. For...reasons that are mostly irrelevant.