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View Diary: More on Section 4 of the 14th Amendment and the debt ceiling (45 comments)

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  •  I have no problem with that approach (0+ / 0-)

    but let's no delude ourselves into thinking that is not the PResident borrowing for the Nation, a usurpation of the Congress' power.

    •  Justified, however, by the fact that the president (0+ / 0-)

      is borrowing for the nation only to pay the obligations imposed by the Congress itself. Not really such a radical concept, given that the executive is a co-equal branch of government charged with protecting the full faith and credit of the republic.

      “I’m able to fly, do what I want, essentially. I guess that’s what freedom is — no limits.” Marybeth Onyeukwu -- Dreamer.

      by chuco35 on Mon Dec 10, 2012 at 08:28:01 AM PST

      [ Parent ]

    •  But is it borrowing? (0+ / 0-)

      This discussion suggests it's really retiring debt

      First, mint a $1.6 Trillion coin and have Treasury use the profits from it to buy all the outstanding debt instruments held by the Fed. This would retire a substantial part of the national debt and immediately create $1.6 T in “headroom” relative to the debt ceiling. This alternative involves the least amount of change in current procedures. The coin, once deposited at the Fed, would remain in a Fed vault, and would not go into circulation.
      Here the comparison is made to the Fed's quantitative easing
      Through open-market operations (e.g., QE1 and QE2), the Fed has purchased (monitized)  $2T of Treasury bonds, i.e., the Fed has paid off $2T of the national debt with money from its (virtual) printing press. But, Treasury bonds held by the Fed still count as part of the national debt.  The Secretary of the Treasury can, however, buy them from the Fed with a single freshly minted $2T platinum coin, and then retire (burn) them.  This plan is based on one  proposed at FDL by Beowulf and letsgetitdone.
      It would no doubt be advantageous to have the Fed willingly involved in the whole procedure. Preventing a prolonged debt crisis and its pernicious consequences would seem to be in keeping with the Fed's mandate.

      Just another faggity fag socialist fuckstick homosinner!

      by Ian S on Mon Dec 10, 2012 at 10:18:17 AM PST

      [ Parent ]

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