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

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  •  The Fed does the printing (0+ / 0-)

    The Government generally spends by marking up accounts these days. In the act of spending it creates money. When it expects that the spending will be deficit spending Congress requires it to issue debt.

    Paper money is issued by the Fed. They do the printing and place that money in circulation. The Treasury still has the legal right to print, I think, but I think there's some ambiguity about that. Also, from an accounting point of view that would be viewed as spending that would not get around the debt limit, since it's functionally the same as marking up accounts.

    Coin seigniorage works differently. First, there is no doubt coming from the law or the Constitution that Treasury can do it if it chooses. Second, the seigniorage profits are not booked as revenue. Last year there were billions in such profits. I think beowulf has the number in his piece. And third, fairly recent legislation gives Treasury the right to mint Platinum jumbo coins.

    The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
    31 USC 5112(k)

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