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View Diary: Platinum coin might be legally required in absence of debt limit increase (144 comments)

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  •  The US Government (2+ / 0-)
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    trevzb, Shockwave

    could pay its obligations in $1 coins, and not breach the Debt Ceiling - Seigniorage profits count as revenue to the Treasury - therefore government spending does not have to be funded by taxes alone. It can be funded by seigniorage profits.

    There is 82 cents of seigniorage profit in every one dollar coin. So theoretically, budgets 5 times tax revenues are feasible (not that I suggest going anywhere near that)

    With recycling of dollar coins, the costs drop much more. The Treasury could ask the Fed to return tax money in the form of dollar coins.

    The only drawback is the tediousness of it all. Which is why the platinum coin makes sense. But the trillion dollar coin is really no different than a trillion dollar coins!

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