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The 1,000,000,000,000 Dollar Coin

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Feoric
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The 1,000,000,000,000 Dollar Coin 2013-01-11 17:59:55 Reply

This is interesting, so let's talk about it.

So now that this Fiscal Cliff bullshit is over with (kinda), we get to hear about two new issues:

1) The sequester (which is really a continuation of the FC drama), and
2) The Debt Ceiling!!!!

I'm here to talk about number two (although a sequester discussion shouldn't be avoided here), but more specifically about a topic that has been buzzing around the media recently: The Trillion Dollar Coin.

What the hell is the trillion dollar coin?

It's exactly what it sounds like: a coin with a trillion dollar denomination. It's an option the Obama administration can take during the debt ceiling negotiations. Well, actually, it sounds like there won't be any negotiations to begin with. This, of course, bring us down one road: a government shutdown.

Oh, kind of like the one we had during the Clinton administration, right?

No, actually, this one would be different. Technically, we already hit the ceiling on New Year's Eve; the Fiscal Cliff fiasco did not address this fact. However, Geithner implemented the so called "extraordinary measures". What those measures include is kinda technical and dry, so I won't bore you with it (the article briefly touches upon some examples if you're curious), but the real issue here is when those measures run out: around February 28th. Approximately the same time the extension of the sequester cuts expire. This isn't a coincidence.

The biggest difference is that the deadline for the expiration of the extraordinary measures is completely different. The shutdown during Clinton occurred before the point where the Treasury's extraordinary measures ran out. The government shutdowns were from November 14, 1995-November 19, 1995 and December 16, 1995 - January 6, 1996, with the Treasury stating that the extraordinary measures would run out around March 1, 1996. The government shutdown we're seemingly headed for in March is after the extraordinary measures run out. If the shutdown occurs, this one would be nasty: major government services (e.g. Social Security payments, Medicare reimbursement, federal paychecks) are stopped.

Why?

Because of the risk of a technical default, where we fail to pay out the treasuries that comprise our debt. During the shutdown, the government would be operating only on the money it takes in via taxes since there are no extraordinary measures to help keep things afloat. We would be prioritizing our payments, and our top priority is servicing our debt. If we fail to pay it, then that's "defaulting," and the consequence of that on the global market would be on a scale we've never seen before. This means we would stop paying for things deemed less important than that, which includes a lot of stuff. So there's no default, but grandma doesn't get her SS check, anyone on the government payroll doesn't get a check, anyone owed money by the government for goods and services doesn't get paid, etc. That's bad.

So, how does this trillion dollar coin come into play?

To understand that, we need to go back to the coin itself and how it comes about. There is a sort of loophole which essentially authorizes the Secretary to print platinum coins without restriction. This means specifically platinum coins can be minted in any denomination. Hence, the trillion dollar coin: this is legally permissible.

How this plays out during the shutdown is simple: the debt ceiling affects the Treasury department, which sells T-Bills to raise cash. Once the debt ceiling is hit (or in this case, when the extraordinary measures run out), Treasury can't do it any more. So, the Treasury mints the coin. The Treasury then deposits the coin at the Fed. The Fed (which is part of the US Government) then credits the Treasury's account for $1T. The Treasury now has $1T, and viola! Crisis averted! So, in essence, the coin is simply an accounting trick.

So, what do you guys think about this? Do you think it's a good idea? I can happily answer any questions about it, since it's kind of a dense issue.

Camarohusky
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 18:27:45 Reply

"Accounting" and "trick" are two very dangerous words to exist together.

It's a nice thing to stop a complete crash, but that doesn't mean it should be done.

Feoric
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 19:06:52 Reply

At 1/11/13 06:27 PM, Camarohusky wrote: "Accounting" and "trick" are two very dangerous words to exist together.

It's a nice thing to stop a complete crash, but that doesn't mean it should be done.

Well, why not? Congress has given an unequivocal grant of authority and there's no vagueness about the plain meaning of the language of the law here. As far as I can see, it's not illegal, and there's no foreseeable negative effects on the economy.

Korriken
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 20:22:47 Reply

At 1/11/13 07:06 PM, Feoric wrote:
Well, why not? Congress has given an unequivocal grant of authority and there's no vagueness about the plain meaning of the language of the law here. As far as I can see, it's not illegal, and there's no foreseeable negative effects on the economy.

that would be a psychotically dangerous thing to do. Given that printing money causes inflation, printing trillion dollar coins whenever the government needs money could put us in a very very bad situation.

I'd rather not have to pay $700 for a loaf of bread and $30,000 for a gallon of fuel.


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Korriken
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 20:28:13 Reply

on the other hand, printing enough to pay off the debt completely would also be "legal" but I'm sure there is a reason they do not do this.

well, beyond the hyperinflation involved and wrecking our credibility with other nations as far as finances go.

I personally doubt they will ever print a trillion dollar coin, but... you never really can tell with the powermongers in washington. Leave it up to politicians to print enough of them to pay off our debt completely so they can gloat "Obama single handedly paid off the national debt! Vote Democrat now!"

Yeah I could see that happening.

on the other hand, Couldn't it be possible to print 1 or 17 of these coins, deposit them, pay off our debt, then destroy enough currency to bring the inflation back down?

Just a thought.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 21:16:21 Reply

At 1/11/13 08:28 PM, Korriken wrote: on the other hand, Couldn't it be possible to print 1 or 17 of these coins, deposit them, pay off our debt, then destroy enough currency to bring the inflation back down?

There's no inflation risk because the coin will never be in circulation. It quite literally is a hand-wave that lets the Government adjust it's books by $1T. Yes, it's ridiculous. Yes, it's dumb. But what better way to fight Debt ceiling retardation, than with a set of shenanigans worthy of a Batman villain (Adam West days, not Growly Bale days), made possible by congressional fuckup in the wording of the regulations on the minting of currency. It's practically Shakespearean.

I'm more interested in the possibility of Obama telling Congress to fuck themselves and raising the debt ceiling by executive order which, constitutionally, he would have justification for doing in order to fulfill his duty to the spending requirements of congress. Remember, the debt ceiling does not mean we're spending more, the money is already spent, by congressional order. The President is required to enact the budget put forth by the congress, so paying the bills congress has already racked up is within his mandate.

If congress further proves their inability to be civil human beings, I wonder if the president will have the stones to try that.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-11 21:30:03 Reply

At 1/11/13 08:28 PM, Korriken wrote:
on the other hand, Couldn't it be possible to print 1 or 17 of these coins, deposit them, pay off our debt, then destroy enough currency to bring the inflation back down?

Just a thought.

well if we did that I think it would be just as problematic. The debt would be paid off, and the value of the currency will remain the same, but then there will be much less currency in circulation meaning, less money to go around. With minimum wage laws and property taxes and all sorts of other obligations people have, the system would completely break as many people default on those payments and i'm beginning to think it would look a lot like a repeat of the great depression?


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 01:36:44 Reply

At 1/11/13 09:16 PM, Ravariel wrote:

I'm more interested in the possibility of Obama telling Congress to fuck themselves and raising the debt ceiling by executive order which, constitutionally, he would have justification for doing in order to fulfill his duty to the spending requirements of congress. Remember, the debt ceiling does not mean we're spending more, the money is already spent, by congressional order. The President is required to enact the budget put forth by the congress, so paying the bills congress has already racked up is within his mandate.

I don't know if you saw the signing statement for the latest NDAA but in it he talks first off about how there are some provisions of the bill he doesn't support but the bill does too much and is too needed to be delayed any longer. He also talks in several places about areas where Congress is trying handcuff him from doing certain things, but he basically says screw that, i am going to exercise my power "in a manner consistent with constitutional presidential authority.

If congress further proves their inability to be civil human beings, I wonder if the president will have the stones to try that.

I seriously think Obama is considering a very aggressive move if the GOP tries to hijack the debt ceiling talks. Whether that is the 1T$ coin or something else entirely, only time will tell, but it will be interesting to watch. He has been very insistent with getting this stuff done, even if he has to do it piecemeal instead of in a "Grand Bargain," and just based on what he has been saying recently I think he has an Ace in the hole, to steal a phrase.

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 02:12:27 Reply

Because creating trillions of dollars from nothing could never have any sort of backlash.. I mean why doesn't everyone do it?

Feoric
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 03:02:19 Reply

At 1/11/13 08:22 PM, Korriken wrote: that would be a psychotically dangerous thing to do. Given that printing money causes inflation, printing trillion dollar coins whenever the government needs money could put us in a very very bad situation.

I'd rather not have to pay $700 for a loaf of bread and $30,000 for a gallon of fuel.

What you're describing here is not anywhere remotely possible. Firstly, you're technically correct about them "printing money" in some sense, but it's not like the coin is going to enter circulation. It only exists to be deposited at the Federal Reserve. Think of it this way: instead of it being a security that the Fed buys, it's a coin that the Fed buys.

As far as inflation goes, let me start off saying that the word hyperinflation gets used a lot but is understood very little. If you knew how much the Fed increased the money supply over the past few years and then looked at our inflation rate*, you'd die laughing. Our inflation rate is ridiculously low and well within the Fed's target rate (not to mention the fact that allowing a certain target rate of inflation is part of any sane economy in the world, as it is much preferable to deflation, and the Fed can enact policy measures to control inflation levels). The coin option by itself has no inflationary effects, since it's really no different than raising the debt ceiling by $1T. The Federal Reserve can sterilize the inflationary impact by selling its own assets (of which it has $3T), keeping the money supply constant. The inflationary effect from spending the actual money would be minuscule - light years away from triggering a hyperinflation scenario. We can absolutely afford that minor impact, and we should if it's deemed necessary. Now, if the political process is still laughably broken and we're in a situation where we continue doing this repeatedly, then that's not good, so you're absolutely right about that. But considering the fact that we've had Republicans trying to force the government to default for over a year, I don't see any other good alternatives.

*I'll run these numbers for you right now in case you're weary of just accepting everything I tell you at face value. If you're a nice guy and you do, then you don't need to read this part since it's kinda boring, unless you're curious.

Here are the changes in the money supply over the past 13 years. Here's what you're looking at so this chart make sense:
M0 is the total of all physical currency including coinage. This includes Federal Reserve Notes (the paper currency we use today) + US Notes (these haven't been issued since January 1971 and are very rare to come across, but is still valid as currency) + Coins (pennies all the way up to collectible coins). Note that it's not relevant whether the currency is held inside or outside of the private banking system as reserves.
M1 takes the total amount of M0 described above, except it measures physical currency outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits.
M2 is M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).

Note that M0 doesn't really matter in this case, since the coin isn't entering circulation.

For some perspective, US GDP was $15.09T for 2011. The latest currency supply (cash + coin) data shows there was $1,081,800,000,000 in circulation. Minting the coin will certainly have an impact on the money supply, but it's effects on M1 and M2 would be pretty small. Measurable, but not drastic or threatening. Remember QE3, where the Fed's been buying up a shitload of assets with the goal to inject more liquidity into the economy (we're talking a scale of three trillion). As soon as the coin is deposited into the Fed's account and the government starts drawing on the Treasury's account, the Fed could respond by selling off some or all of those $3T worth of assets if it so desired. This would mean that for each dollar that the government spends from its Fed account, the Fed receives another dollar from asset sales. The total money supply would then remain constant. The trillion dollar coin is just an accounting fiction. Of course, the Fed doesn't need to sell its assets, and it's arguably better if they don't since we're in a liquidity trap. Increasing the money supply a bit would be fine. It's a win-win. Remember: inflationary pressure and devaluing the dollar are good things in a liquidity trap.

At 1/11/13 08:28 PM, Korriken wrote: on the other hand, printing enough to pay off the debt completely would also be "legal" but I'm sure there is a reason they do not do this.
well, beyond the hyperinflation involved and wrecking our credibility with other nations as far as finances go.

Because it makes it very difficult to control our money supply if we wanted to bring it down in the future. It's not a question of creating hyperinflation, it just makes it harder to control the money supply if we were to do it. That's why the proper solution remains eliminating the debt ceiling, and not the debt itself.

I personally doubt they will ever print a trillion dollar coin, but... you never really can tell with the powermongers in washington. Leave it up to politicians to print enough of them to pay off our debt completely so they can gloat "Obama single handedly paid off the national debt! Vote Democrat now!"

Yeah I could see that happening.

I bet you could see that happening, but it's not going to.

on the other hand, Couldn't it be possible to print 1 or 17 of these coins, deposit them, pay off our debt, then destroy enough currency to bring the inflation back down?

Just a thought.

No, because you'd have to bring in 17 trillion dollars worth of tax revenue. That's more than our GDP. Plus this would probably be an actual hyperinflation scenario, a far cry from any QE measures taken up by the Fed. Think of it this way: government debt is printing money; taxation is effectively the destruction of money while government spending is effectively the creation of it.

Feoric
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 03:34:59 Reply

At 1/11/13 09:16 PM, Ravariel wrote: There's no inflation risk because the coin will never be in circulation. It quite literally is a hand-wave that lets the Government adjust it's books by $1T. Yes, it's ridiculous. Yes, it's dumb. But what better way to fight Debt ceiling retardation, than with a set of shenanigans worthy of a Batman villain (Adam West days, not Growly Bale days), made possible by congressional fuckup in the wording of the regulations on the minting of currency. It's practically Shakespearean.

I'm more interested in the possibility of Obama telling Congress to fuck themselves and raising the debt ceiling by executive order which, constitutionally, he would have justification for doing in order to fulfill his duty to the spending requirements of congress. Remember, the debt ceiling does not mean we're spending more, the money is already spent, by congressional order. The President is required to enact the budget put forth by the congress, so paying the bills congress has already racked up is within his mandate.

If congress further proves their inability to be civil human beings, I wonder if the president will have the stones to try that.

It depends on how this plays out. There's multiple possibilities. The first one is either Obama or the GOP caves, and the shutdown is avoided. The second possibility is Obama invokes the 14th, which is what you're talking about. The final possibility is we enter the perfect storm and the coin is made. The coin option only makes sense if we shutdown, we've been shutdown for at least 2 weeks, and it looks like neither side is willing to move, making a deal impossible and a shutdown indefinite. That is the only time the coin option is acceptable, in my opinion.

Obama already said he's not going to use the 14th, and I don't think he will or should. It would be a massive legal battle. It would lead to years of litigation with an uncertainty of outcome. The coin option is constitutional because of the 14th, though, so there's always that.

Tim Carney said in a press conference on Wednesday that the administration has not ruled out the coin option. The thing I think is this: if the GOP knows that Obama isn't going to cave and a shutdown is imminent, why wouldn't they force Obama to mint the coin? This way they can get something out of it instead of just bad press: the spin machine is recalibrated to focus on economic rhetoric to attack Obama on being "fiscally irresponsible" and nonsense claims of hyperinflation/turning us into Zimbabwe or whatever. The general public has a hard time understanding and accepting the concept of fiat currency. "Obama made my dollars worthless!"

It of course would be a lot better if the House, y'know, did it's fucking job for once instead of holding the US economy hostage

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 11:39:24 Reply

At 1/12/13 03:02 AM, Feoric wrote:
What you're describing here is not anywhere remotely possible. Firstly, you're technically correct about them "printing money" in some sense, but it's not like the coin is going to enter circulation. It only exists to be deposited at the Federal Reserve. Think of it this way: instead of it being a security that the Fed buys, it's a coin that the Fed buys.

and then they spend the money. I wasn't too clear on the inflation. 1 coin won't do it, but if they government makes a habit of printing a trillion dollar coin any time they need money, it would be a disaster. Given some of the other shenanigans the government has gotten itself into, I wouldn't put it past them. $4 trillion budget? fire up the mint!


*I'll run these numbers for you right now in case you're weary of just accepting everything I tell you at face value. If you're a nice guy and you do, then you don't need to read this part since it's kinda boring, unless you're curious.

Here are the changes in the money supply over the past 13 years. Here's what you're looking at so this chart make sense:
M0 is the total of all physical currency including coinage. This includes Federal Reserve Notes (the paper currency we use today) + US Notes (these haven't been issued since January 1971 and are very rare to come across, but is still valid as currency) + Coins (pennies all the way up to collectible coins). Note that it's not relevant whether the currency is held inside or outside of the private banking system as reserves.
M1 takes the total amount of M0 described above, except it measures physical currency outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits.
M2 is M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).

Note that M0 doesn't really matter in this case, since the coin isn't entering circulation.
At 1/11/13 08:28 PM, Korriken wrote:
Because it makes it very difficult to control our money supply if we wanted to bring it down in the future. It's not a question of creating hyperinflation, it just makes it harder to control the money supply if we were to do it. That's why the proper solution remains eliminating the debt ceiling, and not the debt itself.

which, naturally, has its own problems.

No, because you'd have to bring in 17 trillion dollars worth of tax revenue. That's more than our GDP. Plus this would probably be an actual hyperinflation scenario, a far cry from any QE measures taken up by the Fed. Think of it this way: government debt is printing money; taxation is effectively the destruction of money while government spending is effectively the creation of it.

if printing one coin isn't going to have much effect, wouldn't it be somewhat feasible to print 1 or 2 a year to eliminate the deficit? it'd make inflation rise for certain, though.Think I'll look into this more

either way, the bubble keeps getting bigger and eventually it's going to pop. our debt driven budget can only accumulate so much debt before we can't even afford to pay the interest. Japan's over 200% of their GDP in interest. Japan's already got the noose around its neck, it's only a matter of time before the trap door swings open. Problem is, the way America's going, we're approaching the scaffold ourselves. The world isn't exactly in the mood to grand pardons either.

will this trillion dollar coin help? it'll delay the inevitable for a while, but we're still going to end up in serious financial trouble if our politicians can't contain their appetite for spending. Neither party wants to do what is necessary to fix the problem either, and that's the infuriating part. do we need to cut spending? yes! do we need to raise taxes? yes! we need to minimize or even eliminate the deficit before the shit hit the fan.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 11:47:02 Reply

Nobody ever seems to respect and understand that inflation undermines their little dog and pony show aka monetary econ. Instead they pine over such inane particulars such as a novel high denomination coin among other things instead of reality which is value is not inflation and inflation is all the US has to keep the dog and pony show rolling.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 11:56:00 Reply

I heard it being said somewhere that if all the gold in the world was put together, it would have a value of roughly a trillion dollars. So, we're basically dumping all the gold in the world into something that still won't account for ten percent of our problems. We need to make a ten trillion dollar coin and then make six or seven single trillion dollar coins. That would take up roughly a fourth of all the world's GDP.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 12:02:13 Reply

At 1/12/13 11:56 AM, Ericho wrote: I heard it being said somewhere that if all the gold in the world was put together, it would have a value of roughly a trillion dollars. So, we're basically dumping all the gold in the world into something that still won't account for ten percent of our problems. We need to make a ten trillion dollar coin and then make six or seven single trillion dollar coins. That would take up roughly a fourth of all the world's GDP.

LOL do you really think they need a trillion dollar coin LOL it's a joke man. They don't need to have a coin to create currency they just print it for example the Government just prints off Bonds and gives them to the Fed in exchange for what ever denomination they figure is needed at that time.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 13:07:51 Reply

At 1/12/13 02:12 AM, Ceratisa wrote: Because creating trillions of dollars from nothing could never have any sort of backlash.. I mean why doesn't everyone do it?

;;;
First a coin is created from something ...even a base metal coin is worth more than a paper note !

Secondly by the time they design the coin, get approval , create the dies necessary ....
it would be a hell of a lot cheaper to simply get the Fed to print a trillion dollar note.

Unfortunately it wouldn't be an original idea.

http://www.bing.com/images/searchq=trillion+dollar+Zimbawean +note+photo's&qpvt=trillion+dollar+Zimbawean+note+photo%27s&
FORM=IGRE

WHy not 10, 20 ,50 & 100 trillion dollar notes ?

you'll need a wheelbarrow full of them to buy nothing at all ~;p


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 13:10:16 Reply

I have no idea why cut & paste of web links doesn't seem to work here any more !?!?!?!?!

http://www.ebay.com/sch/i.html?_nkw=zimbabwe%20trillion%20do llar&clk_rvr_id=437807602666&adpos=%7Badposition%7D&MT_ID=7&
crlp=%7Bcreative%7D_2416792&geo_id=10232&keyword=zimbabwe+tr illion+dollar&crdt=0


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 14:25:24 Reply

This won't cause inflation.

No extra money is going to circulation. This is more akin to a subordinate company garnering losses so it can give money to a parent company.

It's merely an accounting trick, not anything real.

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 14:33:34 Reply

At 1/12/13 02:25 PM, Camarohusky wrote: This won't cause inflation.

No extra money is going to circulation. This is more akin to a subordinate company garnering losses so it can give money to a parent company.

It's merely an accounting trick, not anything real.

Actually it is inflation indeed as the money was created out of thin air and it does not represent any tangible value such as a skilled work force etc.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 14:42:57 Reply

At 1/12/13 11:39 AM, Korriken wrote: and then they spend the money. I wasn't too clear on the inflation. 1 coin won't do it, but if they government makes a habit of printing a trillion dollar coin any time they need money, it would be a disaster.

Right, yeah, plus it sends a pretty loud and clear message to our investors that the full faith and credit of the United States isn't worth much, considering we need to find arcane loopholes to keep the government and global market operating every time we need to raise the god damn debt ceiling. I'm certain this would be a one-time deal though. I have little idea how this would play out in the media or how the public will react, but I'm assuming it will be "overwhelmingly negative."

Given some of the other shenanigans the government has gotten itself into, I wouldn't put it past them. $4 trillion budget? fire up the mint!

The coin issue really doesn't have anything to do with the budget, it has to do with the debt ceiling; it wouldn't be used for any other purpose. All budgets and spending has to get through Congress, so I think we can all appreciate the childishness when the spending is approved but then the debt ceiling is used as a dangerous political tool, knowing full well that the debt ceiling will get raised. It always has and always will as long as it exists.

At 1/11/13 08:28 PM, Korriken wrote:
which, naturally, has its own problems.

Such as?

if printing one coin isn't going to have much effect, wouldn't it be somewhat feasible to print 1 or 2 a year to eliminate the deficit? it'd make inflation rise for certain, though.Think I'll look into this more

Not necessary.

either way, the bubble keeps getting bigger and eventually it's going to pop. our debt driven budget can only accumulate so much debt before we can't even afford to pay the interest. Japan's over 200% of their GDP in interest. Japan's already got the noose around its neck, it's only a matter of time before the trap door swings open. Problem is, the way America's going, we're approaching the scaffold ourselves. The world isn't exactly in the mood to grand pardons either.

What bubble? We're not in a bubble, we're in a liquidity trap from when the bubble popped. Our situation is nothing like Japan, they're in a deflationary spiral. It doesn't cost them 200% of their GDP to pay interest payments, you're thinking of their debt-to-GDP ratio, which is totally different. The US government took in $2.47 trillion in revenue for 2012. $248 billion of that went to interest payments on debt. There's absolutely no fear whatsoever of us not being able to pay interest payments, the problem is purely political, not economic.

will this trillion dollar coin help? it'll delay the inevitable for a while, but we're still going to end up in serious financial trouble if our politicians can't contain their appetite for spending. Neither party wants to do what is necessary to fix the problem either, and that's the infuriating part. do we need to cut spending? yes! do we need to raise taxes? yes! we need to minimize or even eliminate the deficit before the shit hit the fan.

Like I said earlier, it only helps under specific circumstances. If we're in a shutdown and there's no end in sight, then yes, I think it would help. Obama can't just print the coin tomorrow. He legally could, but the politics and optics of doing it at the wrong time are terrible. Spending isn't nearly as big of an issue as you make it seem. To really bring the deficit to sustainable levels, it's only possible if we makes cuts to three things: Social Security, Medicare, and Defense. Neither party wants to be the party that cut any of them, so yes, that's the infuriating part, especially when we can do this without making cuts to SS/Medicare, which would be a bad thing.

leanlifter1
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 14:52:03 Reply

The coin should read "Pass the buck another 4 years"


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leanlifter1
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 14:53:31 Reply

Also funny how everyone seems to think Econmics and politics are one and the same LOL.


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Ceratisa
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 18:53:00 Reply

What part of basic economic understanding tells people they can create more money from nothing circulation or not? The government would essentially be adding money that doesn't exist to their pocket. Good thing it won't ever happen.

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 19:56:46 Reply

At 1/12/13 06:53 PM, Ceratisa wrote: What part of basic economic understanding tells people they can create more money from nothing circulation or not? The government would essentially be adding money that doesn't exist to their pocket. Good thing it won't ever happen.

LOL they have been doing it for years news flash.


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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 20:40:40 Reply

At 1/12/13 06:53 PM, Ceratisa wrote: What part of basic economic understanding tells people they can create more money from nothing circulation or not? The government would essentially be adding money that doesn't exist to their pocket. Good thing it won't ever happen.

What part of basic economic understanding tells people they can't?

No, seriously, I'm not trying to be an asshole. How do you think this stuff works?

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 20:54:36 Reply

At 1/12/13 08:40 PM, Feoric wrote:
At 1/12/13 06:53 PM, Ceratisa wrote: What part of basic economic understanding tells people they can create more money from nothing circulation or not? The government would essentially be adding money that doesn't exist to their pocket. Good thing it won't ever happen.
What part of basic economic understanding tells people they can't?

No, seriously, I'm not trying to be an asshole. How do you think this stuff works?

Currency in order to be legit and sustainable has to 100% represent real value otherwise it will become like it is debased and FIAT with inflation the only way to keep to dog and pony show afloat. Sorry I cannot go into more depth but the simple fact remains that there is no need to as the monetary system is a fucked up dog and pony freak show based on lies and FIAT enough said. Also that's not even getting into the derivatives scam.


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Feoric
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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 20:58:52 Reply

At 1/12/13 08:54 PM, leanlifter1 wrote: Sorry I cannot go into more depth

No, it's okay leanlifter, I wasn't expecting you to.

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 20:59:00 Reply

If you make a coin of platinum at an arbitrary value doesnt that mess with the real world value of the metals?

example 1 ounce of platinum is $1630 USD....so how big is this coin gonna be lol

If you arbitrarily make 1 ounce 1 trillion what the hell is that gonna do to the inflation rate. Is one ounce of gold which is now $1662 USD then going to be 1 trillion or close to it?

srsly..

the whole idea is fking retarded...

If other countries see this stupidity they should all dump their USD holdings and bonds just for the lulz due to the US's stupidity

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 21:03:38 Reply

At 1/12/13 08:59 PM, Kellz5460 wrote: If you make a coin of platinum at an arbitrary value doesnt that mess with the real world value of the metals?

example 1 ounce of platinum is $1630 USD....so how big is this coin gonna be lol

If you arbitrarily make 1 ounce 1 trillion what the hell is that gonna do to the inflation rate. Is one ounce of gold which is now $1662 USD then going to be 1 trillion or close to it?

srsly..

the whole idea is fking retarded...

If other countries see this stupidity they should all dump their USD holdings and bonds just for the lulz due to the US's stupidity

No, it's fiat, it's not actually "worth" a trillion dollars, much like quarters aren't "worth" 25 cents (there's only about 6 cents worth of metal in each american quarter if my memory serves me). This is called seigniorage.

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Response to The 1,000,000,000,000 Dollar Coin 2013-01-12 21:05:22 Reply

At 1/12/13 08:58 PM, Feoric wrote:
At 1/12/13 08:54 PM, leanlifter1 wrote: Sorry I cannot go into more depth
No, it's okay leanlifter, I wasn't expecting you to.

Come on now out with some more big word and bar graph to try and justify and complcate the mess that is monetary econ LOL. Perhaps if you try and make it sound to complex people will just give up and give in right LOL.


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