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View Diary: President Obama Should Use Coin Seigniorage Now! (55 comments)

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  •  No more spending than now (0+ / 0-)

    I'm not suggesting any more Federal Government  spending than we have now, which is obviously too little since we have a large gap in aggregate demand. So, while seigniorage may add more money to the economy than debt issuance it doesn't add any more net financial assets. Aggregate demand is a function of net financial assets out there, not simply money alone.

    Also, btw, all of our money right now is fiat money, so there's no distinction between coin seigniorage and any other kind of money issue by the Government. However, because of an accounting peculiarity seigniorage profits get booked as revenue, while China taking what is in effect a savings account at the Fed is booked as "debt."

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