The potential of a trillion dollar coin saving the US from bankruptcy...

[afc wimbledon]

My vote for the design

[afc wimbledon]

nm

[Jacks]

Edit: CP is haunted.

[Daradon]

Originally Posted by Red-Mile-DJ

Didn't they try doing this in Germany, where they printed more money or something?

After the first world war, Germany printed a bunch of money to pay off it's punitive foreign debts which they were saddled with as reparation payments.

And yes, the inflation pretty much destroyed their economy.

As I have heard about this US plan, they really don't want to have to print this coin, they are just using it as a negotiating ploy cause they don't want the Republicans to hold the economy hostage again over the debt ceiling.

It wouldn't have the same catastrophic results as the Germany example anyway because the US GDP (or is it GNP?) is far higher than one trillion. But it certainly wouldn't help.

This is just the very basic understanding of it though, I'm sure someone who knows better will come in and refine and add to what I have written.

[Daradon]

Originally Posted by Red-Mile-DJ

Didn't they try doing this in Germany, where they printed more money or something?

After the first world war, Germany printed a bunch of money to pay off it's punitive foreign debts which they were saddled with as reparation payments.

And yes, the inflation pretty much destroyed their economy.

As I have heard about this US plan, they really don't want to have to print this coin, they are just using it as a negotiating ploy cause they don't want the Republicans to hold the economy hostage again over the debt ceiling.

It wouldn't have the same catastrophic results as the Germany example anyway because the US GDP (or is it GNP?) is far higher than one trillion. But it certainly wouldn't help.

This is just the very basic understanding of it though, I'm sure someone who knows better will come in and refine and add to what I have written.

[Caged Great]

This isn't a bad idea as a negotiating tactic by Obama to perhaps push through a compromise getting rid of this option and the debt ceiling once and for all so stupid people can't risk the country and world economy because they can.

[Daradon]

Whoopsy, double post.

[driveway]

The difference between the trillion-dollar coin and the printing of money in Germany is two-fold:

One: the trillion dollars would not enter circulation. As such it would have no effect on the available money supply and would not lead to a de-valuation of the dollar. Also, the money represented by the coin would not be used to purchase foreign currency or gold, which was what the Mark was being used for at the time.

Secondly: The coin would not represent new spending, nor would it be an account from which the Administration would be able to withdraw at will. The Executive Branch cannot make decisions about spending in the United States, and it is required to honor the spending decisions of Congress. The 'coin-account' would only be able to be used to pay for things, such as interest-payments on debt, and existing programs, that have already been passed by Congress.

It's a stupid solution, and one that shouldn't be discussed by serious people, but when more than a third of Congress has demonstrated themselves to be utterly un-serious, stupid solutions need to be considered.

[3 Justin 3]

Posting in this thread only so I can have 12 double posts.

[Rathji]

The really funny thing is that creating a trillion dollar coin isn't the stupidest part of this story.

[handgroen]

came in fully expecting a fake story from the cbc show 'this is that'

[Gozer]

Personally, I like the idea. It can circumvent the idiocy of Congress that is spending more than they tax while prohibiting borrowing the difference (at virtually no interest).

I hate the idea because it's:
a) an obvious ploy to circumvent the legal process
b) another expansion of supreme authority
c) still the best apparent solution.

[Teh_Bandwagoner]

I'm shocked and appalled that this hasn't been posted yet:



Edit:

Originally Posted by You Need a Thneed

"Give what back?"

Close enough!

[Swarly]

so... print 17 of these and poof, no more US debt? spread out over 10 years of course, all at once would just be a crazy plan

/crazy plan to begin with

[Slava]

I guess it should be noted that no one is suggesting that this would eliminate the debt at all, and it wouldn't stave off bankruptcy. What it does is circumvent the debt ceiling.

Its still just silly, but that's what it would do.

[SeoulFire]

Originally Posted by Slava

I guess it should be noted that no one is suggesting that this would eliminate the debt at all, and it wouldn't stave off bankruptcy. What it does is circumvent the debt ceiling.

Its still just silly, but that's what it would do.

You expected that people actually read the linked article? tsk tsk

[Northendzone]

so would vending machnes, car washes and laundromats have to be retrofitted to handle the new coin?

Why go thru the point of minting a coin - just write the demonmination you want on a piece of papers and walk it on over to the treasury.

[jammies]

Originally Posted by Northendzone

so would vending machnes, car washes and laundromats have to be retrofitted to handle the new coin?

Why go thru the point of minting a coin - just write the demonmination you want on a piece of papers and walk it on over to the treasury.

Because the latter wouldn't be legal tender?

They would be better off minting a thousand or so billion dollar coins. Or, more like ten thousand - then, anytime they needed to raise the debt ceiling they would have a stash in someone's desk they could raid to do so.

"Hey Bernie, ya gotta couple hundred billion around I can take? I need to cover next month's Social Security before the bank closes.""

[Hack&Lube]

This thread is proof that people don't actually read the articles posted in original posts. Almost all the people in this thread are just giving knee-jerk reactions without actually understanding or even bothering to read the article.

This is not Weimar Republic or Zimbabwe printing money to inject into the economy and causing rampant inflation. This is not even about paying off debt.

There is a law in the U.S. that says that the government cannot spend past the debt ceiling. Every time the government needs to go more into deficit, they need to go to Congress to raise this limit.

Every time this happens, there is a huge political hubbub and Congress and the controlling parties demand concessions or policy changes, etc. before they will increase the debt ceiling.

Obama can avoid having to concede anything in terms of dealings with Congress and Republicans and bargaining in this manner if Geitner just mints a huge denomination platinum coin (legal loophole says that Platinum coins may be minted in any denomination at his discretion) and uses that instead of having to face the debt-ceiling law.

The debt will not change. Money will not go into the public. Nothing will happen aside from circumventing the debt-ceiling law.

[MarchHare]

There is a law in the U.S. that says that the government cannot spend past the debt ceiling. Every time the government needs to go more into deficit, they need to go to Congress to raise this limit.

Every time this happens, there is a huge political hubbub and Congress and the controlling parties demand concessions or policy changes, etc. before they will increase the debt ceiling.

No, there isn't a huge political hubbub every time. Raising the debt ceiling was formerly one of the most routine things Congress would pass regardless of which side was in power. That all changed in 2011 when a bunch of Tea Party morons decided to hold the US economy hostage because they hate Obama more than they love their country.

Something else that many people don't realize: raising the debt ceiling isn't the same as authorizing new spending; it's only allowing the federal government to pay the bills that have already been approved by Congress.