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

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  •  Krugman is for it (8+ / 0-)

    he's pretty well titled and awarded, for an economist:

    Be Ready To Mint That Coin

    Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.
    •  I did a read through of your link and found this (0+ / 0-)

      as a support for no effect.  It's still a bit weak on support and uses mostly background with the one caution against the coins potential inflationary effect.  Basically it seems that given the near zero interest rates we currently have, the coin is just an end around to where we'll end up anyway, deeper in debt waiting for our elected officials to get us out of this mess. Since it seems Obama still looks like our only hope while the republicans continue to act like reprobate bullies I will continue to support his process.

      But leaving the debt ceiling on one side, isn’t it true that since spending can currently be financed by Fed money printing, we shouldn’t care at all about the notional debt owed to the Fed? Alas, no.

      It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought. So even though right now that debt is just a claim by one more or less governmental agency on another governmental agency, it will eventually turn into debt held by the public.

      The third-rate mind is only happy when it is thinking with the majority. The second-rate mind is only happy when it is thinking with the minority. The first-rate mind is only happy when it is thinking. A. A. Milne

      by Memory Corrupted on Tue Jan 08, 2013 at 10:00:13 AM PST

      [ Parent ]

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