Tuesday, January 15, 2013

Solve Financial Crisis with a single coin?

Yeah, sure. Geithner's just gotta mint one before he leaves the Treasury Department:

A Trillion-Dollar Coin Brings a Jackpot of Jests
[...] WASHINGTON — A bizarre but seemingly legal idea to get around the country’s debt ceiling using a trillion-dollar coin is having its day in Washington.

The proposal, which originated in economics and business blogs and has a vanishingly remote chance of happening, has won ample attention and garnered new controversy as Republicans and the White House seem to be headed for yet another standoff over a legal limit on the country’s debt — a fight that may come as soon as next month.


The workaround would come from exploiting a 1997 law that allows the Treasury to “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.”

The idea was that a secretary might authorize the creation of a commemorative eagle coin, for instance, to be put on sale for collectors. But the law inadvertently gave the Treasury secretary the power to mint, say, a $1 trillion coin, or even a $5 trillion coin, or even a $1 quadrillion coin.

Rather than selling it, he might deposit it at the Federal Reserve. Presto! The shiny new asset would erase a trillion dollars in debt liabilities. Then, the Treasury could carry out its spending — including disbursing Social Security checks and Medicare payments — without hitting the ceiling, a cap on total debt issuance that currently stands at about $16.4 trillion.

When Congress raised the ceiling again, the administration could then take the platinum coin and destroy it. With a token the size of a penny, the White House could head off another round of Congressional brinkmanship and another run at a fiscal cliff.

Blog commentators came up with the idea in 2010, and it gained some attention from financial writers and monetary policy followers during the 2011 debt ceiling standoff. Now, with Republicans and the White House again at odds, the country is expected to run out of spare cash sometime between mid-February and early March. [...]
I find it unbelievable that ADULTS can even talk like this. Talk about clueless. And people wonder why we're in sh*t street.

How about a REAL solution:

Reforming a Congress that spends like teenagers

It used to be called common sense. Remember common sense? I do. And I say, bring it back!

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