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View Diary: Co-author of platinum coin law weighs in on trillion dollar coin (333 comments)

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  •   Real Concern is if the Debt Limit is Never (11+ / 0-)

    raised after the Treasury gets the $1trillion credit. Wouldn't this become a new form of quantitative easing? Preventing the macroeconomic effects is based on the assumption that the Congress raises the debt ceiling and the gov't issues new debt to buy back the dollars it spent correct?

    "The problem with posting quotes off the Internet is you never know if they're genuine."--Gen. George Washington at the Battle of Gettysburg, February 30, 1908

    by Aspe4 on Tue Jan 08, 2013 at 08:33:19 AM PST

    [ Parent ]

    •  They will raise it (3+ / 0-)

      IMO, the only reason this is an issue is because we are in power.  If Romney had won, we wouldn't even be having this conversation.

      Once the president takes away their bargaining chip, they will bitch and moan, and then they'll shut up and raise it.

      "Mediocrity cannot know excellence." -- Sherlock Holmes

      by La Gitane on Tue Jan 08, 2013 at 11:06:38 AM PST

      [ Parent ]

    •  No (1+ / 0-)
      Recommended by:

      There are virtually no macroeconomic effects even if deficit spending is funded by platinum coin seigniorage for any length of time, even permanently. The government will spend the same amount as it would if the money was borrowed, so the effect on aggregate demand is the same, as is the effect on inflation.

      The Federal Reserve would have to change the procedure for how it maintains its interest rate. Instead of buying or selling treasury bonds it would simply credit interest on reserves. Functionally, though, there would be virtually no difference.

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