# 1 Trillion Dollar Coin?? **URL:** \ **Category:** Politics & Elections\ **Created:** [January 5, 2013, 7:31pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188 "2013-01-05T19:31:26Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![GrandWino](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/grandwino/32/67_2.png) [@GrandWino](https://boards.straightdope.com/u/GrandWino)\ **Post date:** [January 7, 2013, 5:57pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/41 "2013-01-07T17:57:35Z")
Paul Krugman [writes about this idea today](http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint-that-coin/?smid=tw-NytimesKrugman&seid=auto) (NY Times link), and says Obama should be willing to do it. > [@](#): > > Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [January 7, 2013, 6:35pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/42 "2013-01-07T18:35:22Z")
> [@BobLibDem](#): > > If they do it, they’ve just got to use it for the Super Bowl coin flip. > > Really, all Obama has to do is stick to his guns and say he’s not going to negotiate and if the Republicans want an economic collapse, the blood will be on their hands. Yeah, except that we libruls don’t want an economic collapse that everyone agrees is the GOP’s fault - we don’t want an economic collapse \*\*at all. \*\* ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [January 7, 2013, 6:50pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/43 "2013-01-07T18:50:27Z")
This article makes the claim that PCS (platinum coin seigniorage) used to payoff debt will not increase inflation. > **[Platinum Coin Seigniorage, Issuing Debt, Keystroking Deficit Spending, and...](http://neweconomicperspectives.org/2012/12/platinum-coin-seigniorage-issuing-debt-keystroking-deficit-spending-and-inflation.html)** > > By Joe Firestone The most frequent objections to proposals that we use Platinum Coin Seigniorage (PCS) to create reserves for debt repayment and deficit spending, frequently come back to inflation.… As I understand it, it claims that debt is more inflationary then simply creating dollars to pay it off, because: [ul] [li]Debt instruments are negotiable financial instruments with a dollar value and we’d simply be replacing one financial instrument (debt instruments) with another (dollars) with no net change in the economy.[/li][li]Debt instruments are actually more inflationary than created money because debt instruments earn interest.[/li][/ul] I’m not sure that I’m convinced but it makes an interesting case. > **[Platinum Coin Seigniorage, Issuing Debt, Keystroking Deficit Spending, and...](http://neweconomicperspectives.org/2012/12/platinum-coin-seigniorage-issuing-debt-keystroking-deficit-spending-and-inflation.html)** > > By Joe Firestone The most frequent objections to proposals that we use Platinum Coin Seigniorage (PCS) to create reserves for debt repayment and deficit spending, frequently come back to inflation.… ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [January 7, 2013, 7:26pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/44 "2013-01-07T19:26:15Z")
> [@Martin\_Hyde](#): > > It’s fun to say that, but I don’t think that’s the real problem and not much is served by saying it is. Congress is aware we need to issue the debt, that’s why the House Republicans are gearing up with a fight over the debt ceiling. What I’d say the Republican far right is too stupid to understand is how governing works and that you have to compromise. 1. If they’re aware that we need to issue the debt, how come they say they’re willing to refuse to do so if they don’t get their way? (And I’m not just talking about the Teahadists; Senate Minority Leader Mitch McConnell is saying exactly the same thing. And it’s not like you could get a clean increase in the debt ceiling through the Senate right now.) 2. In theory, you have to compromise. But the GOP has created all of these opportunities to get what they want through these extortion moments (we’ll have had four in three months by March 28), that they couldn’t have passed through the normal legislative process. It worked pretty well for them in 2011. ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [January 7, 2013, 7:35pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/45 "2013-01-07T19:35:06Z")
What are the four extortion opportunities? I know the “fiscal cliff” and the debt limit. What are the other two? ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [January 7, 2013, 7:46pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/46 "2013-01-07T19:46:12Z")
The sequester, which the fiscal cliff deal postponed to Feb. 28, and the expiration on March 27 of the continuing resolution funding the U.S. government’s operations. ---
**Author:** ![davidm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/davidm/32/225_2.png) [@davidm](https://boards.straightdope.com/u/davidm)\ **Post date:** [January 8, 2013, 1:25am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/47 "2013-01-08T01:25:52Z")
Right. I think I was just linking them with the “fiscal cliff” in my mind; but they’ve become separate issues. ---
**Author:** ![Evil\_Captor](https://avatars.discourse-cdn.com/v4/letter/e/f17d59/32.png) [@Evil\_Captor](https://boards.straightdope.com/u/Evil_Captor)\ **Post date:** [January 8, 2013, 7:03am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/48 "2013-01-08T07:03:29Z")
> [@Grumman](#): > > Trying to solve the problem of the debt ceiling with the trillion dollar coin is like trying to solve your brother’s gambling addiction by paying off one of his credit cards. Until Congress sees the debt ceiling as something they shouldn’t “solve” just by getting another credit card, all you’ve done is given them another trillion dollars to splurge. If the Republicans had the decency and good grace to cover the obligations that they had helped pass into law, such tricks would not be necessary. As it is, the coin trick is not just necessary, but fitting. ---
**Author:** ![CJJ](https://avatars.discourse-cdn.com/v4/letter/c/ecc23a/32.png) [@CJJ](https://boards.straightdope.com/u/CJJ)\ **Post date:** [January 8, 2013, 10:55pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/49 "2013-01-08T22:55:10Z")
> [@Grumman](#): > > The debt ceiling is _supposed_ to be a deterrent so that Congress will actively try to avoid smashing into it, instead of just running full tilt at it and expecting it to get out of the way. No. Until about 1940, Congress directly authorized each issuance of debt. To more efficiently manage the public debt, Congress set up a debt ceiling authorizing Treasury to issue as much in bonds as it likes up to a set limit. It’s important to note that in the present economy (because the federal budget is routinely in deficit), this debt is issued for obligations [that have already occurred](http://www.gao.gov/products/GAO-11-203). Failing to raise the debt ceiling is like buying a new car on credit then refusing to make the payments when they come due: Not only does your car eventually get repossessed, your ability to buy on credit is damaged–you’re not just right back where you started, but worse off. The federal government has made obligations to pay folks based on the budget–you think those defense contractors would risk their capital to work on delivering weapons systems based on anything else? Failing to pay off these obligations–raise the debt ceiling–puts that system at risk. If Congress wants to do something about spending, then they should cut the budget. Monkeying with the debt ceiling is an end run designed to shield them from the tough decisions they would have to make if they ever took their own bloviating about the deficit seriously. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [January 8, 2013, 10:58pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/50 "2013-01-08T22:58:44Z")
> [@CJJ](#): > > If Congress wants to do something about spending, then they should cut the budget. Monkeying with the debt ceiling is an end run designed to shield them from the tough decisions they would have to make if they ever took their own bloviating about the deficit seriously. Exactly. If they were serious, they’d pass an immediate balanced budget through the House. Then if it gets vetoed or doesn’t pass the Senate, then they are being consistent if the House then fails to raise the ceiling (stupid, but consistent.) I’d like to see them try to pass a budget. Not merely for the political fallout it would cause them: there’s an offhand chance it would contain some interesting ideas amongst the crap. ---
**Author:** ![The\_Hamster\_King](https://avatars.discourse-cdn.com/v4/letter/t/8edcca/32.png) [@The\_Hamster\_King](https://boards.straightdope.com/u/The_Hamster_King)\ **Post date:** [January 8, 2013, 11:26pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/51 "2013-01-08T23:26:53Z")
> [@CJJ](#): > > If Congress wants to do something about spending, then they should cut the budget. Monkeying with the debt ceiling is an end run designed to shield them from the tough decisions they would have to make if they ever took their own bloviating about the deficit seriously. Exactly. The Republicans are trying to force the Democrats to take the blame for budget cuts to popular programs. If the Republicans were serious about cutting government spending (and had the voters behind them) they would man up and put forward a budget that shows exactly what cuts they want to make. Then the Democrats could make a counter-proposal and the two sides could hash out a compromise. Instead the Republicans are saying: **“Make a bunch of cuts that we’ll use to run against you in 2014, or we’ll force the federal government into default!”** ---
**Author:** ![CJJ](https://avatars.discourse-cdn.com/v4/letter/c/ecc23a/32.png) [@CJJ](https://boards.straightdope.com/u/CJJ)\ **Post date:** [January 9, 2013, 3:31pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/52 "2013-01-09T15:31:22Z")
> [@Bob Ducca](#): > > Paul Krugman [writes about this idea today](http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint-that-coin/?smid=tw-NytimesKrugman&seid=auto) (NY Times link), and says Obama should be willing to do it. I usually agree with Krugman, and while I think the Obama administration should call the Republican’s bluff on the debt ceiling, I don’t think the coin would fly politically. That’s due in large measure to the fact that the entire public debt discussion is floating on a sea of ignorance as to what exactly money is. [Joe Wiesenthal](http://www.businessinsider.com/why-the-mint-the-coin-debate-could-be-the-most-important-fiscal-policy-debate-youll-ever-see-in-your-life-2013-1) at Business Insider has a good post up explaining the underlying problem: > [@](#): > > But these complaints actually get at the crux of the matter. Creating money is exactly what government does. What’s absurd for a private business is not absurd for the government. > > As John Maynard Keynes simply put it a long time ago: “Money is the creation of the state.” > > That the state creates the money we use is actually known to just about everyone, but people have a hard time making the key leap, which is that once the state is in the business of creating money, then the old gold standard notions of monetary scarcity don’t apply in the same way. > > You can see this flawed thinking all the time. > > It’s because people think that money is scarce that they think that gigantic government debts and deficits will lead to surging interest rates, because our lenders worry that we might not be good for it. Most of the general public still treats money as if it was backed by gold in Fort Knox, and even those intelligent enough to know we’re not on the gold standard still have trouble with the implications of being off it. Therefore it’s easy for the GOP to ridicule the idea–they’ve been pumping the idea of running the government “like a business” for decades–and get most of the general public on board. In short, even if it proves to be 100% legal, the GOP will instantly shred Obama’s political capital for doing it, making the rest of his agenda dead on arrival. There is another factor which leads me to think that both the $1 trillion coin and the 14th amendment option are off the table for Obama, an incovenient one for liberals like me to admit: Obama wants a Grand Bargain that includes cuts to left-wing sacred cows like Medicare, and while he may not like being pushed around by the House Republicans, if he can leverage their debt-ceiling frenzy to get a deal he likes (third time’s a charm, right?) he will most likely take it. [QUOTE=The Hamster King] Republicans are saying: “Make a bunch of cuts that we’ll use to run against you in 2014, or we’ll force the federal government into default!” [/quote] For those who doubt this is true, this is [exactly](http://www.politifact.com/truth-o-meter/article/2010/oct/11/republican-exaggerations-about-cutting-medicare/) what the GOP did as they ran against Obamacare in the 2010 campaign, and they [followed the same strategy](http://tpmdc.talkingpointsmemo.com/2012/03/gop-slams-dems-for-medicare-cuts-republicans-support.php) in 2012 despite the fact that they voted for the exact same cuts as part of the Paul Ryan budget proposal in 2011. These clowns are entirely shameless. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [January 9, 2013, 3:34pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/53 "2013-01-09T15:34:52Z")
> [@CJJ](#): > > In short, even if it proves to be 100% legal, the GOP will instantly shred his political capital for doing it, making the rest of his agenda dead on arrival. **What** political capital? How can you get more intransigent than if they were to attempt to send the US into default? ---
**Author:** ![CJJ](https://avatars.discourse-cdn.com/v4/letter/c/ecc23a/32.png) [@CJJ](https://boards.straightdope.com/u/CJJ)\ **Post date:** [January 9, 2013, 4:59pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/54 "2013-01-09T16:59:57Z")
> [@Ludovic](#): > > **What** political capital? How can you get more intransigent than if they were to attempt to send the US into default? Political capital in the form of public approval and support for the president’s agenda. Republican intransigence will always be in place regardless of what Obama does, and while the public may not agree with it, they probably perceive that position as legitimate (even if it’s stupid and unproductive). I doubt the public would see the $1 trillion dollar coin as anything other than “cheating” because misinformation about how money works is so entrenched that even a heroic campaign to educate the public would be viewed with deep suspicion. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [January 9, 2013, 5:09pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/55 "2013-01-09T17:09:21Z")
> [@CJJ](#): > > I doubt the public would see the $1 trillion dollar coin as anything other than “cheating” because misinformation about how money works is so entrenched that even a heroic campaign to educate the public would be viewed with deep suspicion. Are you kidding? The public could be manipulated pretty easily. Just mint the $1 Trillion coin with a picture of the constitution on the reverse, and Jesus on the obverse. Call it the “miracle Jesus Constitution coin”. Accuse anyone who says anything negative about it of hating both Jesus and the constitution. Heads would asplode. ---
**Author:** ![Procrustus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/procrustus/32/2994_2.png) [@Procrustus](https://boards.straightdope.com/u/Procrustus)\ **Post date:** [January 9, 2013, 5:11pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/56 "2013-01-09T17:11:55Z")
> [@Euphonious\_Polemic](#): > > Are you kidding? The public could be manipulated pretty easily. Just mint the $1 Trillion coin with a picture of the constitution on the reverse, and Jesus on the obverse. Call it the “miracle Jesus Constitution coin”. Accuse anyone who says anything negative about it of hating both Jesus and the constitution. > > Heads would asplode. I’m not against the idea. However, once we have one of these coins, won’t there be a lot of pressure to mint 10 or 20 of them. End income taxes and return our budget surplus. ---
**Author:** ![Terraplane](https://avatars.discourse-cdn.com/v4/letter/t/74df32/32.png) [@Terraplane](https://boards.straightdope.com/u/Terraplane)\ **Post date:** [January 9, 2013, 5:22pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/57 "2013-01-09T17:22:59Z")
> [@Steve\_MB](#): > > Knowing Obama, he would compromise with the Republicans by putting Reagan’s face on the trillion dollar coin. I don’t think this would be a compromise, more of a slap to the face. Republicans would flip their shit if he did that. It would be awesome. ---
**Author:** ![BigDadWolf](https://avatars.discourse-cdn.com/v4/letter/b/aeb1de/32.png) [@BigDadWolf](https://boards.straightdope.com/u/BigDadWolf)\ **Post date:** [January 9, 2013, 5:37pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/58 "2013-01-09T17:37:08Z")
> [@Procrustus](#): > > I’m not against the idea. However, once we have one of these coins, won’t there be a lot of pressure to mint 10 or 20 of them. End income taxes and return our budget surplus. Your statement demonstrates the problem with this plan which the perception of what coin will do versus the reality of what the coin will do. The perception is this trillion dollar coin will be used to reduce the debt will it will not. The reality is that it is an accounting trick which will allow the treasure to continue to pay the bills which Congress has already incurred without having to actually raise the debt limit imposed upon the treasury by Congress. We could mint 10,000 thousand trillion dollar coins and as long as they are only used as deposits into the treasury accounts the impact the debt and money supply will be zilch. The only thing it will allow us to do is continue paying our bills. ( I admit by continuing to pay our bills the actual debt will need to be increased). ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [January 9, 2013, 5:54pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/59 "2013-01-09T17:54:56Z")
> [@Terraplane](#): > > I don’t think this would be a compromise, more of a slap to the face. Republicans would flip their shit if he did that. > > It would be awesome. Proposed images for the [Reagan](http://upload.democraticunderground.com/imgs/2013/130108-ronald-reagan-one-trillion-dollar-coin.jpg) and [Dubya](http://img152.imageshack.us/img152/7237/bushcoin1.jpg) versions of the trillion dollar coin. 😉 ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [January 9, 2013, 6:01pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/60 "2013-01-09T18:01:04Z")
> [@BigDadWolf](#): > > We could mint 10,000 thousand trillion dollar coins and as long as they are only used as deposits into the treasury accounts the impact the debt and money supply will be zilch. I’m pretty sure this isn’t right. If the gov’t pays its bills by borrowing from me I don’t have that money to spend anymore, the government does. If the gov’t pays it’s bills without borrowing from me, they spend the money AND I still have money to spend. That’s a direct change to the money supply. If they wanted to, they could lower taxes to nothing, borrow nothing new, and keep paying bills with their 10 quadrillion dollars worth of coinage. Long term it’s a terrible idea, short term it’s not going to trash our economy, but will at least get the debt limit off the table as a bargaining chip. [Previous page](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188.md?page=2) [Next page](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188.md?page=4)