4 ms·

The Trillion-Dollar Question: Could a Coin Save the Day?

2 points by miles 4y ago

miles 4y ago
The money quote: > The trillion-dollar-coin concept first emerged in 2010 before the first big Obama-era debt ceiling fight. A musing in the comments of a popular blog on economics and finance about the viability of minting such a coin to create money out of thin air and avoid default spurred a debate about creative ways to avoid an economic catastrophe. Right! Unlike the money that the Fed creates from their vast storehouse of mysterious if undoubtedly far less ephemeral stuff!
- amalgamated_inc 4y ago
  > money quote ;)
amalgamated_inc 4y ago
Shameful plug: My game Fed Up allows you to buy Trillion Dollar coins as part of the game :) https://fedupgame.com/ https://fedupgame.com/ PS: Not mobile friendly, I'm sorry :(
bell-cot 4y ago
Yes, it could. Sorta. Both the optics of needing to do that, and the optics of doing it, are fairly bad. Plus, the belligerent nihilist faction in Congress would be really pissed off over you ruining their high-drama sh*t-show.
- amalgamated_inc 4y ago
  Of course it would solve nothing. Putting more 0s on the money doesn't change it's value. This is so obvious only an academic could deny it. There's no such thing as a free lunch. But the make belief fairy "lalala I can't hear you" faction in Congress would be really pissed off if somebody made them understand this obvious truth.
simonblack 4y ago
Why a coin? Surely a paper document valued at a trillion dollars would do the same job and be cheaper to produce. (Except that, being paper, it would scream that it is just a quick-fix solution to the problem. There is no way a coin, even if made of a rare metal like radium, could ever be worth a trillion dollars.) Once the country's financial situation is stuffed, it is stuffed. Period. And all the hand-waving in the world will never fix that.
- jfengel 4y ago
  Technically: because of a law (Public Law 104-208) that lets the Mint make platinum coins in any denomination it wants. It doesn't require Congress to authorize it. It has nothing to do with the value of the metal. All coins are worth more than their metal content. It's about complying with the letter of the law rather than anything specific to coins. It's a letter-of-the-law fix to a letter-of-the-law problem, where Congress won't authorize the government to spend the money that it allocated in its budget.
  - miles 4y ago
    > All coins are worth more than their metal content. That does not appear to be the case: Penny Costs 2.1 Cents to Make in 2021, Nickel Costs 8.52 Cents https://www.coinnews.net/2022/01/18/penny-costs-2-1-cents-to-make-in-2021-nickel-costs-8-52-cents-us-mint-realizes-381-2m-in-seigniorage/ https://www.coinnews.net/2022/01/18/penny-costs-2-1-cents-to... Pennies and nickels cost more to make than they're worth https://money.cnn.com/2016/01/11/news/economy/u-s-coins/ https://money.cnn.com/2016/01/11/news/economy/u-s-coins/

2 points by miles 4y ago

The money quote: > The trillion-dollar-coin concept first emerged in 2010 before the first big Obama-era debt ceiling fight. A musing in the comments of a popular blog on economics and finance about the viability of minting such a coin to create money out of thin air and avoid default spurred a debate about creative ways to avoid an economic catastrophe. Right! Unlike the money that the Fed creates from their vast storehouse of mysterious if undoubtedly far less ephemeral stuff!

amalgamated_inc 4y ago
> money quote ;)

amalgamated_inc 4y ago

Shameful plug: My game Fed Up allows you to buy Trillion Dollar coins as part of the game :) https://fedupgame.com/ https://fedupgame.com/ PS: Not mobile friendly, I'm sorry :(

bell-cot 4y ago

Yes, it could. Sorta. Both the optics of needing to do that, and the optics of doing it, are fairly bad. Plus, the belligerent nihilist faction in Congress would be really pissed off over you ruining their high-drama sh*t-show.

amalgamated_inc 4y ago
Of course it would solve nothing. Putting more 0s on the money doesn't change it's value. This is so obvious only an academic could deny it. There's no such thing as a free lunch. But the make belief fairy "lalala I can't hear you" faction in Congress would be really pissed off if somebody made them understand this obvious truth.

simonblack 4y ago

Why a coin? Surely a paper document valued at a trillion dollars would do the same job and be cheaper to produce. (Except that, being paper, it would scream that it is just a quick-fix solution to the problem. There is no way a coin, even if made of a rare metal like radium, could ever be worth a trillion dollars.) Once the country's financial situation is stuffed, it is stuffed. Period. And all the hand-waving in the world will never fix that.

jfengel 4y ago
Technically: because of a law (Public Law 104-208) that lets the Mint make platinum coins in any denomination it wants. It doesn't require Congress to authorize it. It has nothing to do with the value of the metal. All coins are worth more than their metal content. It's about complying with the letter of the law rather than anything specific to coins. It's a letter-of-the-law fix to a letter-of-the-law problem, where Congress won't authorize the government to spend the money that it allocated in its budget.
- miles 4y ago
  > All coins are worth more than their metal content. That does not appear to be the case: Penny Costs 2.1 Cents to Make in 2021, Nickel Costs 8.52 Cents https://www.coinnews.net/2022/01/18/penny-costs-2-1-cents-to-make-in-2021-nickel-costs-8-52-cents-us-mint-realizes-381-2m-in-seigniorage/ https://www.coinnews.net/2022/01/18/penny-costs-2-1-cents-to... Pennies and nickels cost more to make than they're worth https://money.cnn.com/2016/01/11/news/economy/u-s-coins/ https://money.cnn.com/2016/01/11/news/economy/u-s-coins/