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He's the real republican, cause he voted for tax cuts.

It is sad when you have to spin a vote in a way that results in more Democrats voting for less taxes than Republicans.

 LordofHats wrote:
The bill has assuredly passed. So I guess we can now sit back and wait for the next crisis.

In 2 months for the debt ceiling fight.

I'll make sure we have popcorn in storage

Boehner didn’t come close to satisfying the “majority of the majority” rule, which leaves him on thin ice for Thursday’s Speaker vote. Need new leadership...

Who do you propose the "new" leader should be?

Dave Miltrin of Catterwaulky, Ohio

He's a 7-11 clerk I met last night, but he seems trust worthy.

This is what we need to do...


Seems assed backwards, but coining these trillion dollar coins may be used to wipe out the deficit.

My mum mentioned this... and she works for Ernst & Young!

My gut reaction... NO WAY! Like Rick said:

This is a comic proposal and someone is yanking my chain...

Then, my mum challenged me by saying "why not'? (and she never does that to me). I suspect she doesn't like the plan, but wants me to figure it out.

o.O

Dammit mom... then, I start researching...

Here's the legal aspect of this concept:

The Secretary may mint and issue platinum bullion coins 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.

Wait... wut? The treasury secretary can legally authorize the mint to strike platinum coins for any denomination??? o.O

My biggest concern would obviously be the inflationary pressure having trillion dollar coins in the currency... so, I read more...

They WOULDN'T be in the currency at all. (really, can you ask anyone to break a trillion dollar coin? ).

So, here's how it'll work as far as I can see:
-A platinum coin or coins (!! egads!) would be minted and deposited in the US Mint’s Public Enterprise Fund (PEF) at the Fed, where it would be credited for their full legal tender face value, as determined by the Sec of Treasury's discretion.

-The Treasury would then “sweep” the profits (technical term I think), which is the difference between the cost to the Mint of producing the coin and face value of the coin into the Treasury general Account (TGA) at the Federal Reserve. This is how it normally works for any denominations.

-Again, the face value of the coin can be whatever the Treasury Sec/Mint chooses... there is no requirement that the coin weight be related to the face value. So, it could be $1 trillion or more, or less if preferred. This is all perfectly legal. o.O

- According to folks way smarter than me, they insists that these coins could retire the Treasury securities/bonds held by the Federal Reserve and the private sector, which mechanically is the same as QE. That's not necessarily bad since this happens all the time.

tl;dr: My mum got me thinking that the Treasury Secretary can issue Monopoly Money in form of trillion dollar coins to pay off the national debt... and I can't see how it wouldn't work, even though my gut is screaming at me that it's all wrong! Please help!

@Frazzeled: You a banker? Please tell me that these economic professors are smoking some rainbow'ed miracle.

we went over it years ago

 DIDM wrote:
we went over it years ago

oh?

What was the consensus?


Automatically Appended Next Post:
In any event, when are we getting the Bluebacks?

 whembly wrote:
This is what we need to do...
...

...

As far as I can tell, the platinum coin idea is merely quantitative easing by a different method. In other words, printing new money.

It doesn't make any difference if the money is paper or specie, what matters is that the face value is more than the material value, which makes it fiat money.

Quantitative easing can be a good thing if done in moderation. If done badly, it leads to runaway inflation.

Presumably the clever trick here is that in the USA there may a law that prevents the Federal Reserve from just printing paper money, and the platinum coin evades that restriction.

I suspect it is more of a PR thing.

People hear "Quantitative easing" they fall asleep, or on the more extream end start screaming about "European Ideas".

They hear "We made a trillion dollar platinum coin" they think "Thats cool" and "It's not making money because its real because its made of platinum, like gold but better".

Quantitative easing has worked, to some extent, in the UK. Not as well as people hoped though.

The big problem countrys run in to is when govenrments use it as a way to pay for things, and just start printing more and more, you get runaway inflation. IMO you need the kind of disconect the UK has between monetary policy and fiscal policy for it to work. I don't know if the US dose or not as I'm not sure how independant the federal reserve is.

 Kilkrazy wrote:

 whembly wrote:
This is what we need to do...
snip...

...

As far as I can tell, the platinum coin idea is merely quantitative easing by a different method. In other words, printing new money.

It doesn't make any difference if the money is paper or specie, what matters is that the face value is more than the material value, which makes it fiat money.

Quantitative easing can be a good thing if done in moderation. If done badly, it leads to runaway inflation.

Presumably the clever trick here is that in the USA there may a law that prevents the Federal Reserve from just printing paper money, and the platinum coin evades that restriction.

Yes, there is a law that mandates only "x" paper currency in circulation (300 million?). There's also laws dictating denominations, circulation, material components for the other metals... platinum as none of that.

From an accounting perspective, it'll work...

Inflation may not be a concern cause all it does is add spendable credits into the Treasury funds... which they can use to retire existing debts (when bonds become due). Remember, Treasury cannot spend more than what was apportioned by Congress...

The two dangers I see is that it may encourage Congress to Spend waaaay more and the world wide market my take a hit due to "confidence".

The degree to confidence is what drives the value of a fiat currency system.

Thus... me no likey.


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Steve steveson wrote:
I suspect it is more of a PR thing.


The big problem countrys run in to is when govenrments use it as a way to pay for things, and just start printing more and more, you get runaway inflation. IMO you need the kind of disconect the UK has between monetary policy and fiscal policy for it to work. I don't know if the US dose or not as I'm not sure how independant the federal reserve is.

The federal reserve is independent insofar as they're largely private banks. It's just that they must abide by the rules and regulation of being a "Federal Reserve Bank".

This is a MAJOR disconnect between the Fed's monetary policy and fiscal policy... that's why there's deficit spending.

I'm paraphrasing here:
Congress says: Spend 2 trillion
OMB says: Tax revenue is only 1 trillion...
Treasury says: Okay, we'll issue additional 1 trillion in bonds to fund congressional spending
Treasury comes back and says: gak... we're hitting the Debt Limit ceiling and can only legally issue 500 billion in funds.
Congress says: gak... we passed some spending plans with no way to pay for it.
President says: Guys... I can't NOT pay the interest, bonds and mandatory spending... I'd be break the 14th admendment among other bad things.