Trillion Dollar Platinum Coin

December 9th, 2012
econ, money, politics
Congress passes laws that have the effect of bringing in money and sending it out. Where there's a shortfall the government borrows money, going deeper in debt. Except there's a maximum amount of money congress allows the government to borrow, the "debt ceiling", and if the government reaches that point we get a crisis.

Last time this came up people pointed out that the president could just ask the mint to make some trillion dollar platinum coins. Apparently borrowing money requires congressional approval, but minting it does not. [1] Normally printing money is a bad way to finance government operations because it causes inflation: it's basically forcing the people who already have money to give the government a nominally zero-interest loan. Interest rates are practically zero, however, so is there any downside to forcing the government to fund itself through seigniorage instead of bonds?


[1] The law has huge numbers of restrictions on most coins, including their values and how many can be minted, but the law for platinum coins is wide open:

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.
This is a strange loophole; why is it there? I can't find when it was added. Is there some sort of blame command for the law where you can look up when a particular bit of text was added, and from there look into why it might have been put there?

Comment via: google plus, facebook

Recent posts on blogs I like:

Jealousy In Polyamory Isn't A Big Problem And I'm Tired Of Being Gaslit By Big Self-Help

The nuance is in the post, guys

via Thing of Things July 18, 2024

Trust as a bottleneck to growing teams quickly

non-trust is reasonable • trust lets collaboration scale • symptoms of trust deficit • how to proactively build trust

via benkuhn.net July 13, 2024

Coaching kids as they learn to climb

Helping kids learn to climb things that are at the edge of their ability The post Coaching kids as they learn to climb appeared first on Otherwise.

via Otherwise July 10, 2024

more     (via openring)