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When the platinum coin is deposited, it will increase government's account balance by one trillion dollars, which can then spent in the economy like any other d
by Geee 5y ago
When the platinum coin is deposited, it will increase government's account balance by one trillion dollars, which can then spent in the economy like any other dollar. The newly issued money will increase the total circulating supply of US dollar, diluting its unit value.
- panarky 5y agoThat's not at all how this works. Treasury mints the coin. Treasury trades the coin to the Federal Reserve for existing bonds the Fed already owns. Treasury retires the bonds which keeps the US under the statutory debt limit. The coin isn't "spent in the economy". It's just an exchange of assets among government departments. Zero new money circulates in the economy.
- Geee 5y agoHow are they going to keep spending then? That's why they need to raise the debt limit in the first place. If they retire their old debt, they would have to issue new debt. In both cases the end result is the same; new money in circulation, and the Fed has platinum coins instead of government bonds.