Everything You Need to Know About the Crazy Plan to Save the Economy With a Trillion-Dollar Coin

[grahamhgreen]

Everything You Need to Know About the Crazy Plan to Save the Economy With a Trillion-Dollar Coin
By Matthew O'Brien
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Congress passed a law in 1997, later amended in 2000, that gives the Secretary of the Treasury the authority to mint platinum coins, and only platinum coins, in whatever denomination and quantity he or she wants. That could be $100, or $1,000, or ... $1 trillion.

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Last question. You don't seriously think this is a good idea, do you? If ever there was something that tells the world we're a banana republic, it's --

Choosing to default on our obligations. There is nothing crazier than that. If it it's a choice between defaulting on our obligations, and minting a trillion-dollar coin, I say mint the coin. In an ideal world, Obama would end the platinum coin loophole in return for the House GOP forever ending the debt ceiling, as Josh Barro proposed, but I'll settle for anything that involves us paying our bills as we promised.

http://www.theatlantic.com/business/archive/2013/01/everything-you-need-to-know-about-the-crazy-plan-to-save-the-economy-with-a-trillion-dollar-coin/266839/

[Warren Stupidity]

1. The coin would not default on anything.

It is effectively no different at all from congress issuing a piece of paper stating that the treasury can issue another 1T of bonds to cover current expenses. The 1T coin deposited at the fed would nominally lower our debt account at the fed by 1T. The treasury would then be able to issue another 1T in bonds. The coin does not circulate. It is not spent. All existing debt obligations are met, as are new obligations.

The only difference is that congress did not hold our current debt obligations hostage while negotiating about raising the entirely artificial debt ceiling.

[SQUEE]

2. But it does highlight the fact that money is ephemeral

And that we are pretty much living on a false value system. I see no way this doesnt end up being a HUGE mistake.

[Warren Stupidity]

3. "a false value system" - please google fiat money.

we have been living, along with the rest of the modern world - in this "false value system" for well over 100 years. Even the theoretical convertibility of the US dollar under Bretton Woods was within a global system of fiat money, and officially ended in 1971. Nobody outside of lunatic rightwing libbers is seriously arguing to go back to precious metals based currencies, although the irony of the platinum coin gambit does bring the whole issue of what exactly is money back up.

[SQUEE]

4. Kind of my point, although a bit clumsily made I admit.

There has been a form of specie attached to "money" throughout history. Now it is merely a non substantial concept, we attach value to a myriad of things from ideas to sand. The is fact that most people have agreed to accept this even without truly understanding it, it still doesn't take away the fact that the current monetary system is starting to unravel.
I am constantly amazed at the various and different ways that value is established, and the many things that fall under the idea of capital. Some good, others not so.