Can a $1 Trillion Coin End Debt Ceiling Crisis?

Yahoo ^

[Red in Blue PA]

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.

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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."

This section of law was meant to allow for the printing of commemorative coins and the like. But the Treasury Secretary has the authority to mint these coins in any denomination he or she sees fit.

With a $1 trillion coin in hand, Treasury could deposit the money into Fed accounts, and pay its debts in that manner, instead of relying on bond issuance.

And none of this requires Congressional consent. Talk about an elegant solution.

The White House unsurprisingly hasn't commented on the idea. But Rep. Jerrold Nadler is on board. "I'm being absolutely serious," he told Capital NY. "It sounds silly but it's absolutely legal."

[Tzimisce]

These are just as good. These are IOUs.

Lloyd, 'Dumb and Dumber'

[Bon mots]

Yes.
That will fix everything just fine.
Why didn't they think of this brilliant plan sooner.

[Bon mots]

The only thing that will fix the federal finances is for Congress to live within its means. Everything else is just putting off the inevitable crash.

It is too late to fix this mess by simply living within ones means.

The total debt including off-balance-sheet debt is now approximately $90Trillion, while total revenue forcefully taken by the IRS is only some $2.5Trillion.

Total IRS Revenues are now ENTIRELY eaten up by entitlements with nary a cent left for debt reduction nor even military expenses.

Where are we headed?

A good roadmap for where we are headed is something like what happened to Weimar Germany. The background was a bit different - Germany's debt was war reparations imposed by the victors of WWI, but the path ahead is the same, albeit on a global scale this time.

Anyone who doubts it needs to read the brilliant book, "When Money Dies" by Adam Fergusson.

You can click on the book below to get it from Amazon:

Download it for free here!

When Money Dies: The Nightmare of the Weimar Collapse

This book was out of print for a while, but now is being reissued. If you are interested, I suggest you grab the free e-book above while it lasts, as it will likely soon disappear since the book has gone back into print.

:)

Of course you can always buy a bookshelf copy from Amazon as it's cheap enough.

[Blue_Ridge_Mtn_Geek]

Quite possibly they are serious... and if so it highlights a peculiarly Inner Beltway delusion: that the “Debt Ceiling” is something that can be fixed by law or regulation. The reason for a ‘legal’ debt ceiling is to avoid the debt ceiling that really counts: the one imposed by bond and currency markets. When the ‘legal’ debt ceiling loses credibility through stunts like this proposal, the US dollar and US debt denominated in dollars will be discounted just like the debt of fiscally incontinent European states like Greece, Portugal, Italy, and Spain.

A review of 20th century examples: http://www.globalfinancialdata.com/news/Articles/Century_of_Inflation.doc
http://www.globalfinancialdata.com/news/Articles/Century_of_Inflation.doc