Rage Against the Coin

NYT ^ | January 8, 2013 | Paul Krugman (Moonbat)

[Qbert]

Well, the trillion-dollar-coin thing — deal with the debt ceiling by exploiting a legal loophole to have the Treasury mint one or more large-denomination coins, deposit them at the Fed, and use the cash in the new account to pay bills — has really taken off. Last month I spoke with a senior Fed official who had never heard of the idea; these days it’s all over.

There seem to be two kinds of objections. One is that it would be undignified. Here’s how to think about that: we have a situation in which a terrorist may be about to walk into a crowded room and threaten to blow up a bomb he’s holding. It turns out, however, that the Secret Service has figured out a way to disarm this maniac — a way that for some reason will require that the Secretary of the Treasury briefly wear a clown suit. (My fictional plotting skills have let me down, but there has to be some way to work this in). And the response of the nervous Nellies is, “My god, we can’t dress the secretary up as a clown!” Even when it will make him a hero...

[Snip]

What the hysterics see is a terrible, outrageous attempt to pay the government’s bills out of thin air. This is utterly wrong, and in fact is wrong on two levels.

The first level is that in practice minting the coin would be nothing but an accounting fiction, enabling the government to continue doing exactly what it would have done if the debt limit were raised.

[Snip]

So minting the coin would be undignified, but so what? At the same time, it would be economically harmless — and would both avoid catastrophic economic developments and help head off government by blackmail.

[DuncanWaring]

Destroying a nation’s currency with massive infusions of fake (fiat) “money” is definitely NOT “economically harmless!”.

There was actually a time in this country when debasing the currency was a capital offense.

[OneWingedShark]

Every bank's reserves in treasury bonds immediately become worthless. I hope you are the one in the front of the line for the bank run when the news hits.

How about your insurance company's investments? That life insurance you've put money into for your entire life? Gone instantly, or at least greatly reduced in value. And the reserves for car and property insurance disappear too, so you better hope that it isn't a bad year for disasters if you wreck your car.

Have bonds in your retirement account or even some savings bonds in your bedroom drawer? You better hope that WalMart can use you as a greeter when you hit seventy.

Given that banks were bailed out by gov, I have little sympathy for them in this scenario; what sympathy I do have is to those who bought into government lies.
Same with insurance companies, but moreso, as they have used government to force people to buy their product.

Everyone would be better off with a more impotent federal government; if this means those supporting its corruption have to go down, so be it & let it happen.

[xzins]

What it is is unconstitutional. Revenue decisions are a power of Congress, specifically the House of Representatives. This is done purely as an unintended manipulation of a law about minting coins.

[Flick Lives]

How about we pretend a tulip bulb is worth a fortune. Oh, wait, it’s been done.

[faithhopecharity]

“When it all comes crashing down” is precisely their objective (and thus is synonymous with their “winning”). The crash won’t just happen after they’re done, it will define the completion of their agenda.

[Brightitude]

The coin should have a picture of Congress in clown suits!

[Logical me]

Oh my gosh! How damn stupid. With thinking like this I am firmly convinced that there is absolutely no hope. We are done. What backs this as@ hole of a coin? As a matter of fact nothing much backs our currency now.

[tsomer]

Rather than waste the platinum,(by the way, where’s that supposed to come from?) here’s a better plan:

Round up all the art school graduates and have them make, find or excrete something for a promise of extra social security sometime in the distant future and a good reference letter (the White House has a press and rubber stamp).

Then, get the New York times art critic to declare them all masterpieces. Afterwards, stash that crap somewhere— no security needed since everyone else will assume it’s junk.

Then, claim the value of all that “art” as a national cultural treasure and base the value of their notes on its declared worth.

[Lonesome in Massachussets]

Willkommen in Weimar Amerika!

[Elsie]

Boink Boink Boink

the king has no clothes!

[a fool in paradise]

"So minting the (trillion dollar) coin would be undignified, but so what? At the same time, it would be economically harmless" - Paul Krugman

Nevermind pesky inflation and devaluation.

We're off on the road to Zimbabwe, we certainly do get around...

[4Liberty]

He got the "accounting fiction" part right...

[a fool in paradise]

In my economic course in the 1980s, there was an example from the 1960s or 70s where some people conspired to "wreck" the economy by encouraging people to cause a run on the banks with one day's withdrawls.

The Left has plotted and schemed for generations. This is a sustained LOOTING of the national wealth (the money is handed out with NO intentions of ever paying it off, that money is being used to feather nests of the protected interest groups). Obama is going unchecked and really doesn't give a DAMN about ever meeting his fiscal RESPONSIBILITY. He does seek to usher in a post-American world. Otherwise he's a complete dumbass if he thinks he can buy his way out of debts.

[lentulusgracchus]

[Article/Pharticle/Testicle]

...mint one or more large-denomination coins, deposit them at the Fed, and use the cash in the new account to pay bills .....

---

I'm sure the Chinese will be deliriously happy to see one of these supercoins show up at their Washington embassy. They'll be thrilled.

[lentulusgracchus]

The whole idea is to create a false sense of "stability" in the short-term so that they can ram home as much of their progressive agenda as possible.

They have to know that proposing a stunt like this, with its massive freight of unseriousness, will have the opposite effect.

But then, perhaps that is what they intended.

[kevkrom]

All other arguments against the coin ploy aside, here's a fundamental problem with the scheme: Let's say it's National Treasure 3, and Nick Cage's character breaks into the Treasury and steals the $1T coin. How much can he actually get for it on the open market? Is it really worth $1T, or something in the general neighborhood? Or does it have a value -- as a coin -- equal only to its component metal(s)? Or something inbetween?

Or, more to the point, outside of the perception of value, how much is a $1T coin actually worth?

[stevencraw]

We need to print 200 Trillion dollar coins, have the Fed pay 3 percent interest on the coins. That way we can start paying decent interest on individual savings. Thats 6 trillion a year use 3 trillion a year to pay off all federal debt and spend the other 3 trillion. In about 5 years all debt is gone and in the maan time all other taxes can be eliminated. Or we could make it a Quadrillion and do it in less than a year. Absoulutly brillant Idea.

[stevencraw]

We need to print 200 Trillion dollar coins, have the Fed pay 3 percent interest on the coins. That way we can start paying decent interest on individual savings. Thats 6 trillion a year use 3 trillion a year to pay off all federal debt and spend the other 3 trillion. In about 5 years all debt is gone and in the maan time all other taxes can be eliminated. Or we could make it a Quadrillion and do it in less than a year. Absoulutly brillant Idea.

[Cyber Liberty]

Well, Krugman doesn’t think there should be a debt ceiling, so it only makes sense he supports cheating the system to get around it. Take note: This is one of those times when Krugman looks warmly upon a “loophole.”

[TomasUSMC]

how much is a $1T coin actually worth?

PRETTY SOON.............. ABOUT 2 CENTS