Skip to comments.Can a $1 Trillion Coin End Debt Ceiling Crisis?
Posted on 01/04/2013 12:51:00 PM PST by SeekAndFind
What if the threat of a voluntary default by the United States could be erased by simply turning one tiny scrap of platinum into a coin?
That's right. No debt ceiling problem. No bickering in Congress. No market jitters. The only thing needed is for the Treasury Department to mint a platinum coin with a face value of $1 trillion.
Of course, this is not going to happen. Creating money out of thin air is hardly a solution. It could lead to even more concerns from those worried about inflation. Critics of the Federal Reserve's monetary easing programs would likely be apoplectic if the Treasury Department trumped Ben Bernanke's "helicopter drop" by minting a trillion more new dollars.
The influential New York Times columnist Paul Krugman has already dubbed the talk a "gimmick." But here is why some people think this bizarre strategy could work.
Last week, Treasury Secretary Tim Geithner made it official: Federal borrowing has reached the $16.394 trillion debt ceiling.
Treasury, which runs the government's debt-issuance operation, is busy creating about $200 billion of headroom by employing what it calls "extraordinary measures." That should cover about two months' worth of borrowing.
When the two months expire, Treasury will no longer be able to pay the country's bills -- that is, it won't be able to borrow more money to pay for spending already authorized by Congress.
If Congress does not act to raise the debt ceiling, the U.S. will default on its debts. Not good. But this is where the platinum coin comes in. Normally, the Federal Reserve is charged with issuing currency. But U.S. law, specifically 31 USC § 5112, also grants Treasury permission to "mint and issue platinum bullion coins and proof platinum coins."
(Excerpt) Read more at finance.yahoo.com ...
Is this in any way similar to the EO on currency that JFK issued? The one that some think may have led to his assassination?
The original concept for this idea allegedly came from someone at the American Enterprise Institute. Not exactly a raving left-wing loon factory.
Then again the Obamacare mandate had its origins in a white paper put out by the Heritage Foundation.
God save us from people who think they’re smarter than the rest of us sitting around Washington, D.C. brainstorming all day.
but at least the Chinese will have cheap lettuce!
Theory: All money is nothing more than an IOU. Money is a unit of transfer. It transfers the value of goods or services. Money let's you transfer the value of a good or service to another use, good or service.
Fact: Our government is empowered to print money.
Would it be possible for the Government to pay for itself, WITHOUT taking taxes from the governed?
No taxes, except maybe small, "use taxes".
Theory: With US FED print of money to pay it's bills, there would be no appreciable inflation hit, because our trillion dollar economy would generate a more robust GDP. 6 or 7% growth per year or more!
No taxes and print money
Heck, make a couple hundred of these coins and declare them worth eleventy quintillion. No taxes, free houses, free food, free gold plated Obamaphones for all.
This is exactly what the Germans did after World War I, in an effort to get rid of their debt. The subsequent inflation ruined the country’s economy.
Present law allows the Treasury Secretary to mint coins out of platinum and assign a value to them. He can’t do that with copper or any other metal.
Or just a minimal tax like 3% of income with no deductions.
We suffer from Stockholm syndrome on taxes.