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View Diary: House Republicans mock idea to save economy from threat of GOP sabotage (146 comments)

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  •  Inflation and Devaluation are likely (0+ / 0-)

    The US dollar is a fiat currency, which means there is no obligation to make a fixed exchange in a commodity - it keeps its value as long as markets have confidence in the currency. Market confidence takes a very long time to establish, but actions that undermine confidence can very rapidly drop market confidence  (inflation and devaluation of the dollar).

    Having a successful fiat currency requires that markets believe the government will increase the money supply no more than modestly faster than economic growth (its actually more complex than this).

    There is great concern in financial markets that the US is having unsustainable increases in government debt from already very high levels.  The battle with Congress is partly over how rapidly US debt will increase.  Using the coin loophole to continue the growth in Federal spending at a faster rate than previous expected and increasing debt would undermine confidence, and tell markets that the historic controls on this increase in debt have failed.

    The debt rating agencies who have not already downgraded US debt would have little choice but the do so.

    Other countries will ramp up efforts to develop alternatives to the dollar as a world currency.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Tue Jan 08, 2013 at 11:04:38 AM PST

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    •  In which case… (0+ / 0-)

      …we'd be better off minting 16 coins thereby wiping out the debt.

      Teh stoopidTM, it hurts. Buy smart, union-printed, USA-made, signs, stickers, swag for everyone: Get your We are the 99% Yard Sign.

      by DemSign on Wed Jan 09, 2013 at 12:15:46 AM PST

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      •  Why not then make 310 million (0+ / 0-)

        Tiny $1 T coins and give one to every citizen!  No more wealth inequality.  If Buffett has $1040 billion, and I have $1000 billion , he is only 4% more wealthy.  As we would all be wealthy nobody in the country would need to work if they did not want to.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed Jan 09, 2013 at 12:29:08 AM PST

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