The scheme that proposes the issuing of a trillion-dollar coin to be sold for digital money from the Federal Reserve System is dead. The Treasury won’t go along with it.
That’s really a shame. I was a big fan of the scheme.
It would have been legal.
It would have short-circuited the debate over the debt ceiling.
It would have forced the Federal Reserve to put a $1,500 coin on its books at $1 trillion. That would have made as much sense as keeping Fannie Mae and Freddie Mac IOUs at face value.
It would have let the public know that the Federal Reserve is sitting on a completely fictitious portfolio of fraudulent IOUs.
It would have informed voters that the Federal Reserve is an economically irrational institution that creates money out of nothing in order to buy assets that no one else wants at artificially high prices.
It would have reminded voters that the debate over the debt ceiling is a Punch and Judy show, that Congress always capitulates anyway.
It would have informed voters that the Federal Reserve is a legalized gang of counterfeiters.
It would have been seen as making no economic sense from the point of view of the national interest, which in fact accurately describes the Federal Reserve.
All in all, it was a noble suggestion that should have been taken seriously by everyone who accepts the theory of central banking. These people clearly do not have the courage of their convictions.
Continue reading on nytimes.com.
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Published on January 14, 2013. The original is here.
The U.S. government will run another trillion-dollar deficit this year. It probably will not issue the coin this year, either.
This is from Wikipedia.
The trillion-dollar coin is a concept that emerged during the United States debt-ceiling crisis in 2011, as a proposed way to bypass any necessity for the United States Congress to raise the country's borrowing limit, through the minting of very high-value platinum coins. The concept gained more mainstream attention by late 2012 during the debates over the United States fiscal cliff negotiations and renewed debt-ceiling discussions. After reaching the headlines during the week of January 7, 2013, use of the trillion dollar coin concept was ultimately rejected by the Federal Reserve and the Treasury. . . .The idea for the Treasury Department to mint a coin and send it to the Federal Reserve in order to pay off the debt was first popularized by Populist Presidential Candidate Bo Gritz in 1992. As a standard part of his stump speeches, he would hold up a five-inch example coin. The specific concept was first introduced by Carlos Mucha, a lawyer who commented under the name "beowulf" on various blogs. "Beowulf" outlined the idea in a series of comments on Warren Mosler's blog in May 2010, noting that "Congress has already delegated to Tsy [Treasury] all the seinorage power authority it needs to mint a $1 trillion coin...." Beowulf also drew attention to the concept on the blog of economist Brad Delong in July 2010 and in a legal analysis blogpost of his own in January 2011 but it wasn't until July 2011 that the use of the concept as an unorthodox method of resolving the debt-ceiling crisis came to the attention of the financial press and in mainstream media blogs. At that time the idea also found some support from legal academics such as Yale Law School's Jack Balkin. Once the debt ceiling crisis of the summer of 2011 was resolved, however, attention to the concept faded.
The concept gained renewed, and more mainstream, attention by late 2012 as the debt-ceiling limit was being approached once again. In early January the economist Paul Krugman endorsed the idea and asserted that opposition to the idea was coming from people unwilling to admit the truth that "money is a social contrivance." His endorsement attracted considerable media attention. Former Mint director Diehl was widely cited in the media debunking criticisms of the coin and its basis in law. Congressman Jerry Nadler endorsed the idea, and it was featured in the international press by January 4, 2013.
Krugman is the most famous Keynesian economist in America. He won the Nobel Prize. Nadler was co-prosecutor of President Trump in the Senate early this year, along with Adam Schiff.
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