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View Diary: Progressives in Congress: Vote for the President to Do It! (35 comments)

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  •  I'm confident (3+ / 0-)
    Recommended by:
    psyched, The Moonlit Knight, maddogg

    that the markets don't matter if the president chooses the PPCS option. In that case, he can mint a coin large enough to pay off 40% of the total debt within a week and most of the remainder over the next three years as the debt instruments mature. We'd never have to borrow back our own money again. So we really would not have to worry about the bond vigilantes or their markets. And, before you raise nonsense about this being inflationary, please read this and this.

    •  A magic coin? (0+ / 0-)

      Forgive me for being blunt, but does any respected economist support the coinage notion as an answer to the debt ceiling problem?

      Obama and strong Democratic majorities in 2012!

      by TRPChicago on Sun Jul 31, 2011 at 12:40:01 PM PDT

      [ Parent ]

      •  Sure (2+ / 0-)
        Recommended by:
        psyched, maddogg

        Jamie Galbraith, Warren Mosler, Randy Wray, Brad Delong, Paul Krugman, Stephanie Kelton, Scott Fullwiler, and God knows who else since it went mainstream over the past few days.

        Also, forgive me for disputing your label. The coin is not magic. It is just fiat money created by the United States. Guess what, all of our money is currently fiat money.

        Once the Fed credits the face value of the coin to the Mint's PEF account, and the Treasury sweeps that account, the TGA will be able to spend in the usual way, by marking up private sector reserve accounts. No magic involved!

        The only thing new here is that the Executive would be using a new method to fill the nation's purse. PPCS would replace borrowing back fiat money the United States previously issued, as the method used to fill the purse. Control over the purse strings, however still remains with Congress.

        •  You've thought about this more, obviously, but ... (0+ / 0-)

          ... I can't agree that Paul Krugman, for one, endorses the idea.

          What he said, in his NYT op ed piece a couple of days ago was:

          "These things [trillion dollar coins and exploding options to buy up all the US government's real estate] sound ridiculous — but so is the behavior of Congressional Republicans. So why not fight back using legal tricks?"

          Krugman also said, "Outrageous behavior demands extraordinary responses. Over to you, Mr. President." But again, that's not much of an endorsement of the coinage alternative.

          Obama and strong Democratic majorities in 2012!

          by TRPChicago on Sun Jul 31, 2011 at 01:54:38 PM PDT

          [ Parent ]

        •  We also have (0+ / 0-)

          Mark Kleiman Professor of Public Policy UCLA says

          Is it legal? Arguably, it would be illegal not to do it. The President is bound by the Constitution and his oath of office to “take care that the laws be faithfully executed.” Appropriations bills are laws; he’s not allowed to impound appropriated funds, but must expend them. If the debt ceiling isn’t raised – won’t have the cash to do so unless he issues the trillion-dollar coins. And if that’s the only way to carry out his Constitutional duties, then he is not just allowed, but required, to do precisely that.

          Michael Froomkin, Laurie Silvers and Mitchell Rubenstein Distinguished Professor of Law, University of Miami, commenting in Brad DeLong's blog appears to agree. that coinage is aq legal way to circumvent the Debt Ceiling.

    •  Inflation (0+ / 0-)

      wouldn't hurt right now anyway.

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