3 ms·

Trillion dollar coin or no coin, the debt ceiling attempts to regulate (in part) expenditures already authorized by Congress and signed into law. It's a tempest

Trillion dollar coin or no coin, the debt ceiling attempts to regulate (in part) expenditures already authorized by Congress and signed into law. It's a tempest in a teapot for one party in Congress to argue that it's irresponsible to conduct authorized expenditures, because in fact, Congress did authorize the expenditures. The two transactions, debt providing cash to the government, and seigniorage (difference in value from the metal in the coin and the fiat value asserted) providing cash to the government for the coin issuance are approximately equally inflationary, over time, assuming that the debt remains outstanding. If such a coin were undertaken, in all probability, it would be repurchased by the Treasury and retired, and debt would be issued. Indeed, the a return of the coin to the Treasury could be via issuance of debt directly to the Federal Reserve. A little perspective on Federal Reserve Bank's process to create cash: Federal Reserve Balance Sheet - by James Hamilton on Econobrowser http://www.econbrowser.com/archives/2008/12/federal_reserve_1.html http://www.econbrowser.com/archives/2008/12/federal_reserve_...

temphn 14y ago
are approximately equally inflationary, over time. Exactly. Both terminate in the end of the US as the world's reserve currency, with the yuan as its obvious replacement. China has already signed deals with Russia, Australia, Brazil, Turkey, and the UAE to eliminate the USD from bilateral trade. [1] Your arguments appear to be directed at people who support the Republican party or are concerned about the partisan points here. Bush, Obama, Bernanke, Greenspan, Krugman, and the whole gang are peas in a pod. Bush won reelection in 2004 by having Greenspan inflate a housing bubble with Krugman cheering[2] the Fed Chairman on. Obama won reelection in 2012 by having Bernanke re-inflate[3] a housing bubble with Krugman cheering the Fed Chairman on. [1] http://www.forbes.com/sites/jackperkowski/2012/06/26/china-busy-signing-currency-deals/ http://www.forbes.com/sites/jackperkowski/2012/06/26/china-b... [2] http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip... To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Paul Krugman: August 2, 2002 [3] http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40... The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.

temphn 14y ago

are approximately equally inflationary, over time. Exactly. Both terminate in the end of the US as the world's reserve currency, with the yuan as its obvious replacement. China has already signed deals with Russia, Australia, Brazil, Turkey, and the UAE to eliminate the USD from bilateral trade. [1] Your arguments appear to be directed at people who support the Republican party or are concerned about the partisan points here. Bush, Obama, Bernanke, Greenspan, Krugman, and the whole gang are peas in a pod. Bush won reelection in 2004 by having Greenspan inflate a housing bubble with Krugman cheering[2] the Fed Chairman on. Obama won reelection in 2012 by having Bernanke re-inflate[3] a housing bubble with Krugman cheering the Fed Chairman on. [1] http://www.forbes.com/sites/jackperkowski/2012/06/26/china-busy-signing-currency-deals/ http://www.forbes.com/sites/jackperkowski/2012/06/26/china-b... [2] http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip... To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Paul Krugman: August 2, 2002 [3] http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40... The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment.