A Coin worth...(pause)....ONE TRILLION DOLLARS!!!

[Heimdalr]

azulmagia

True, the metal of the coin is not going to be worth a trillion dollars. But does a penny contain a cent's worth of metal? Is the paper a dollar bill made of worth a dollar?

Once again, people are getting spooked out about money creation.

The real question is, though; what are you going to use to pay me back. That's the oil fund you're handling. The stuff we were going to use to pay our boomers. We were expecting returns. And we got what, imaginary coins put into an imaginary bank to raise an imaginary ceiling? The debt is the only thing that's real in this equation.

[azulmagia]

Heimdalr

azulmagia

True, the metal of the coin is not going to be worth a trillion dollars. But does a penny contain a cent's worth of metal? Is the paper a dollar bill made of worth a dollar?

Once again, people are getting spooked out about money creation.

The real question is, though; what are you going to use to pay me back. That's the oil fund you're handling. The stuff we were going to use to pay our boomers. We were expecting returns. And we got what, imaginary coins put into an imaginary bank to raise an imaginary ceiling? The debt is the only thing that's real in this equation.

Actually, the debt isn't real either, since that's money too.

It doesn't mean nothing bad will happen if the ceiling doesn't get raised...but money, value and debt are human creations, not some ineluctable feature of nature like gravity.

[Heimdalr]

azulmagia

Heimdalr

azulmagia

True, the metal of the coin is not going to be worth a trillion dollars. But does a penny contain a cent's worth of metal? Is the paper a dollar bill made of worth a dollar?

Once again, people are getting spooked out about money creation.

The real question is, though; what are you going to use to pay me back. That's the oil fund you're handling. The stuff we were going to use to pay our boomers. We were expecting returns. And we got what, imaginary coins put into an imaginary bank to raise an imaginary ceiling? The debt is the only thing that's real in this equation.

Actually, the debt isn't real either, since that's money too.

It doesn't mean nothing bad will happen if the ceiling doesn't get raised...but money, value and debt are human creations, not some ineluctable feature of nature like gravity.

I would be delighted to see debt and ensuing default punch you in the face to make you see just how real it is but on the other hand I'm just too comfortable right now. I don't have to travel for miles to get a carrot and my Nexus 4 is underway from the other end of the administrative region at the same price as it would from the Arctic.

[N3bu]

azulmagia

N3bu

azulmagia

N3bu

azulmagia

Treasury can't print enough bills, it's limited by law.

But there are NO laws limiting the amount of coinage it can mint. And the law allows the Treasury to mint coins of ANY denomination, provided that they are platinum.

God US laws suck balls.

Ok then, I won't argue further. It's still a bad idea, even if it's the only idea left, just simply because of the inability to use the coin.

This coin is not meant to be used as other coins are. It's just a really offbeat way to get certain things done without breaking the law.

All currency should be usable at some point, just by nature. Essentially the Fed is just pretending they have an extra 1 Trillion dollars. They don't really because they can't give it to anyone or pay anyone with it. This works for the situation, but eventually when it comes down to it your going to be promising 1 Trillion dollars to people when it doesn't exist, or at least until the point they replace that coin with 1 Trillion dollars in real currency.

I think you've forgotten how money is created. Atrios puts it this way:

Quote:

There really is nothing silly about this. Money is a creation of government. That we've, by statute, left most of that power to the Fed does not mean that Treasury should not, if necessary, use its power for a clearly positive purpose.

Frequently the Fed snaps its fingers and creates billions. The coin is no sillier than that, unless you just think money is silly. In which case you can give all of your money to me.

link

When the coin is deposited at the Fed, the Fed will start issuing bonds - just as would happen were the debt ceiling be raised by act of Congress.

It is sillier then that actually. When the Fed usually creates money it can do by backing it's values, otherwise we wouldn't have this problem now, the fed could just change their books and say they have more money, no coin needed. If the Fed intends to use the money it spirits into existence like it always does, the money itself has to be usable at some point.

Obviously if this plan is going to work that coin will have to be replaced once operations are normal again.

[azulmagia]

We are in deep, deep, deep s**t.

The Treasury says it will not mint the coin.

Paul Krugman

If I’d spent the past five years living in a monastery or something, I would take the Treasury Department’s declaration that the coin option is out as a sign that there’s some other plan ready to go. Maybe 14th Amendment, maybe moral obligation coupons or some other form of scrip, something.

And maybe there is a plan.

But as we all know, the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies?

The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue. Failing to pay debt service would be a breach of contract. Paying contractors, and maybe Social Security recipients, in scrip would violate the law, which says that they should be paid — not given IOUs. Deciding that the president has the right to ignore the debt limit after all would avoid these legal breaches at the expense of another breach.

And default in any of these senses would risk a huge collapse of confidence.

So is there a plan, or will it just be another case of tough talk followed by a tail-between-the-legs retreat?

As I said, if we didn’t have some history here I might be confident that the administration knows what it’s doing. But we do have that history, and you have to fear the worst.

(link)

In the words of Atrios of Eschaton, "On to the illegal alternatives."

[The Danguy]

azulmagia

We are in deep, deep, deep s**t.

The Treasury says it will not mint the coin.

Paul Krugman

If I’d spent the past five years living in a monastery or something, I would take the Treasury Department’s declaration that the coin option is out as a sign that there’s some other plan ready to go. Maybe 14th Amendment, maybe moral obligation coupons or some other form of scrip, something.

And maybe there is a plan.

But as we all know, the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies?

The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue. Failing to pay debt service would be a breach of contract. Paying contractors, and maybe Social Security recipients, in scrip would violate the law, which says that they should be paid — not given IOUs. Deciding that the president has the right to ignore the debt limit after all would avoid these legal breaches at the expense of another breach.

And default in any of these senses would risk a huge collapse of confidence.

So is there a plan, or will it just be another case of tough talk followed by a tail-between-the-legs retreat?

As I said, if we didn’t have some history here I might be confident that the administration knows what it’s doing. But we do have that history, and you have to fear the worst.

(link)

In the words of Atrios of Eschaton, "On to the illegal alternatives."

Good. There's one stupid idea out of the way.

[azulmagia]

The Danguy

azulmagia

We are in deep, deep, deep s**t.

The Treasury says it will not mint the coin.

Paul Krugman

If I’d spent the past five years living in a monastery or something, I would take the Treasury Department’s declaration that the coin option is out as a sign that there’s some other plan ready to go. Maybe 14th Amendment, maybe moral obligation coupons or some other form of scrip, something.

And maybe there is a plan.

But as we all know, the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies?

The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue. Failing to pay debt service would be a breach of contract. Paying contractors, and maybe Social Security recipients, in scrip would violate the law, which says that they should be paid — not given IOUs. Deciding that the president has the right to ignore the debt limit after all would avoid these legal breaches at the expense of another breach.

And default in any of these senses would risk a huge collapse of confidence.

So is there a plan, or will it just be another case of tough talk followed by a tail-between-the-legs retreat?

As I said, if we didn’t have some history here I might be confident that the administration knows what it’s doing. But we do have that history, and you have to fear the worst.

(link)

In the words of Atrios of Eschaton, "On to the illegal alternatives."

Good. There's one stupid idea out of the way.

OK.

Now, since you're so smart please give us a legal and effective manner in resolving this crisis that is better than this.

Or concede that it is not, in fact a stupid idea. Because you'll be rueing the day you said this once the United States defaults.

[Sen Natsu]

The coin won't be made, but one thing I thought was funny, fox thought it would weight several hundred tons, as if coins are tied value to weight.
lol.

[hahahalolwut]

should have gone with the coin, we would have saved a bunch in interest. oh well. ******** it, just raise the debt limit by executive order if congress won't play ball.

[METALFumasu]

Sen Natsu

The coin won't be made, but one thing I thought was funny, fox thought it would weight several hundred tons, as if coins are tied value to weight.
lol.

Hmm....

Step 1: Make giant platinum coin worth $1 trillion dollars weighing several hundred tons (Geez, how big was FOX expecting this thing to be? the size of a house?)
Step 2: Put the coin in it's own museum in DC. Call it the Museum National Debt Museum or something. (Because they've got museums for just about everything there already, I'm sure they've got room for one more). Charge $25 per person (with appropriate discounts for seniors. However, no military discounts, since they're still generating income) to see outrageously large coin.
Step 3: ????
Step 4: PROFIT!!!

But yeah, stupid idea was stupid. imo, worse than the petition for the U.S. to build a Death Star stupid (at least building a moon-sized killer space station could have the possibility of generating new jobs).

So how does the U.S. Government plan to solve the debt crisis?

The Zen Master says, "We'll see."

[19 yr old Political Geek]

The Danguy

Good. There's one stupid idea out of the way.

@Zen Master: Come on man, you know they'd just outsource all the labor to foreign countries if we ever tried to build a Death Star. And since the White House does not approve of blowing up planets, that'll never happen......

[Less Than Liz]

Treasury and the Fed have both rejected the gimmick as being without legal or other merit. Score one for the good guys.

[azulmagia]

METALFumasu

Sen Natsu

The coin won't be made, but one thing I thought was funny, fox thought it would weight several hundred tons, as if coins are tied value to weight.
lol.

Hmm....

Step 1: Make giant platinum coin worth $1 trillion dollars weighing several hundred tons (Geez, how big was FOX expecting this thing to be? the size of a house?)
Step 2: Put the coin in it's own museum in DC. Call it the Museum National Debt Museum or something. (Because they've got museums for just about everything there already, I'm sure they've got room for one more). Charge $25 per person (with appropriate discounts for seniors. However, no military discounts, since they're still generating income) to see outrageously large coin.
Step 3: ????
Step 4: PROFIT!!!

But yeah, stupid idea was stupid. imo, worse than the petition for the U.S. to build a Death Star stupid (at least building a moon-sized killer space station could have the possibility of generating new jobs).

So how does the U.S. Government plan to solve the debt crisis?

The Zen Master says, "We'll see."

Less Than Liz

Treasury and the Fed have both rejected the gimmick as being without legal or other merit. Score one for the good guys.

I like how people here like calling this idea stupid or similar without, you know, evidence.

What the refusal to mint the coin amounts to is a game of chicken that's been taken to a whole new - and frightening - level. Obama's press secretary said “there are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default.”

Frankly, I would question the grasp on reality of anyone saying "score one for the good guys". Because the odds of the United States defaulting just went up. Is that really a good thing?

[Less Than Liz]

Because some of us understand what the rule of law is and how that is important regardless of petty Congressional games. Further, if Congress can rely on executive circumvention every time they get in a tiff, there's even less incentive to cooperate.