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Skip to comments.Strange Days: Print Two-One Trillion Dollar Coins to Solve Debt Ceiling Crisis?
Posted on 12/09/2012 10:31:28 AM PST by whitedog57
The Washington Post had interesting article about solving the debt ceiling crisis. The author recommended that Treasury produce two-one trillion dollar platinum coins and deposit them at The Fed.
I like it, says Joseph Gagnon of the Peterson Institute for International Economics. Theres nothing thats obviously economically problematic about it.
Actually, Mr. Gagnon, there are a few problems with it.
1. Moral hazard. The President orders trillion dollar coins to be produced, then gives one each to campaign donors and other party favorites (note that I did not mention our current President by name since this would be a temptation of any political party or President).
2. The Fed. Like it or not, The Fed has helped keep the inflation rate down near 2%. This is because our monetary system relies on banks to make loans to consumers and business get the money supply circulating through the financial system. Without money circulation, there is little inflation and little economic growth.
Growth in bank-held loans and leases in positive (above the red line of 0% growth) but still below the historic levels (pink line). So, it is difficult to generate inflation when bank lending is below historic levels.
Of course, student loans have skyrocket along with auto loans. Mortgage loans are still trending downwards (although this is a combination of lower purchase mortgage originations and household defaults on their mortgages.
So producing trillion dollar coins and depositing them at The Federal Reserve Bank of New York (NOT the Board in DC!) is the same as Treasury printing an additional $2 trillion of money. And if anyone suggests producing those trillion dollar coins and giving them to households or friends of the Administration, please take a money and banking course at your nearest college or university.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
Next April 15th, make your own trillion dollar coin and send it in for tax payment.
If you can do it, I can too. BTW, you can keep the change...
Some Dems are seriously insane.
Problem is, meanwhile the GOP has exported enough American jobs, that they win.
Bring back American jobs now.
Why do you keep saying the GOP is exporting jobs? I don’t think the GOP employs very many, and I doubt they employ any in foreign countries.
High taxes, heavy handed regulations, mandates, unions, massive red tape and paperwork have all worked together to make it too expensive to do business in this country.
Then support American jobs.
Pretty simple, then.
Isn't wonderful when a silly cartoon becomes real life?