the fear is that a sufficiently large minority of republicans actually want debt default to happen, out of a misunderstanding of what happens when this occurs, and so they are actively interested in a brinkmanship which makes them kingmaker. as a matter of legislative dynamics, the jumbo coin would only be needed once
as a matter of macroeconomic policy, the Fed and the Treasury could keep it up for as long as the Fed has assets to sell. Once the Fed has run out, then the Treasury will have to monetize debt to keep it up, which is liable to be just as destructive as wholesale default. the Fed has lots, though.
Hey, for that matter, what are they saying will happen with default anyway?
Why are we comparing the impact of a limited nuclear exchange to the downgrading of the United States' credit?
Both would suck pretty fucking hard. I don't think it matters how hard either of them would suck in relation to one another.
Because an article whose link I have lost said that the economic fallout of the US defaulting on its debt the way the Teapers want us to would be equal to a limited nuclear exchange in Europe.
The second sanest is that, using a trick of the law that lets the treasury mint platinum coins of any denomination, we just bring out a trillion dollar coin, stick it in an account, and pretend that this all makes sense.
... man what. Isn't this the "print more money" solution which fucks the value of the currency?
Debt can't go above x on paper.
Mint coin worth 1 trillion.
Federal Reserve "buys" coin from Treasury.
Debt, (on paper) is now x - 1 trillion.
We can now borrow again.
Wait, so the coin isn't a coin in the sense of being currency, it's something that is bought so that...
No, wait, that makes no sense because it'd have to have some actual currency value...
I... am probably going to stay out of this, it sounds way too big for me to understand.
I could be wrong, but this is predicated on the understanding that the United States is wealthy enough only to have to do this once--or rather, to do it and immediately undo the practical effects to stave off default.
No one's suggesting that supercoins be issued indefinitely into the future. I think.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
Right, it's backed by the sheer wealth that can be called upon. Makes sense.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
That's the thing that's weirding me out. If I understand it right, the government's collateral for loans is given to itself, it's like a weird loop that barely makes sense.
hmm
no, you see, the Treasury gets to administer the legislated budget. It gets to say: you own this, you own that, to the assorted departments. the Federal Reserve is a bank. It can't take away the stuff that depositors put there. It's not selling "the government"'s stuff. It's selling its own stuff, the vast hoard of assets which it owns for the specific purpose of pursuing its mandate. the infamous Federal Reserve balance sheet which is where all that quantitative-easing stuff sits.
I'm going to assume the Reserve isn't in any position to sell aircraft carriers or parts of the Midwest--but to promise actual capital. And we're talking about a default, which would lead to a exponential decline in the value of that ability both with the damage to the economy and to of a lack of trust for the aforementioned reasons.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
Why are we comparing the impact of a limited nuclear exchange to the downgrading of the United States' credit?
Both would suck pretty fucking hard. I don't think it matters how hard either of them would suck in relation to one another.
Because an article whose link I have lost said that the economic fallout of the US defaulting on its debt the way the Teapers want us to would be equal to a limited nuclear exchange in Europe.
Ohhh okay, I guess I missed that. If you find the link though, I'd be interested in reading it. These threads always have the best articles.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
Basically, @Synthesis, if you don't understand how the collapse of the US economy would be as damaging as the Eurozone scenario I really don't know how to help you.
I'm still waiting for a plausible scenario where four nuclear missiles are neatly fired at four cities without the requirement that multiple European nations tearing apart a massive economic entity, and then everything stops. I have no doubt the default would be incredibly damaging, both as it happened and as it became apparent that there was no eleventh hour option, but the deaths of tens of millions of both producers and consumers combined the actual physical destruction of a large chunk of the world economy seems more immediately severe.
Now, as to the long term ramifications, personally I think this gets into the sort of highest-government economic deal making that is extremely difficult to speculate about. But if nothing could be done, which might be the cae, it could indeed be much worse, especially since it wouldn't be accompanied by the growth through investment in rebuilding accompanied by war.
You can wait as long as you like, a limited nuclear exchange does not necessitate a world war.
A default of American debt means the collapse of the dollar, a global depression at least as deep as the 1930s, and a rush to find a replacement world currency which does not currently exist.
Not to mention the likely military conflicts that would arise from this crisis.
I know it is a favorite passtime of yours to try to undercut the idea of American hegemony, but the facts aren't with you here.
Or you're being far too caught up in the logistics of nuclear war.
Assuming those outcomes are true, a World War of somekind is certainly not out of the question. We got WWII out of the last mass global depression. Which, I believe reinforces your argument.
let me try a one-sentence summary of the coin idea: exactly the same amount of Treasuries as the legislated budget requires are sold, and exactly the same amount of revenue is raised, as there would be without a debt ceiling; only now, some of the Treasuries are sold by the Federal Reserve instead of the Treasury, and the Federal Reserve passes the raised revenue to the Treasury. That's it.
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AtomikaLive fast and get fucked or whateverRegistered Userregular
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
Within that context, the politically "best" solution is probably just to dare the Supreme Court to rule on a default first, then use the coin as a fallback position - I've not heard a reason why this couldn't be done (though the reality there I suppose is that it's a "soft landing" on the idea that the US is definitely going to default at some point in the next 10 years, and it gives the markets time to gracefully tank the dollar's value unless the problem is fixed).
let me try a one-sentence summary of the coin idea: exactly the same amount of Treasuries as the legislated budget requires are sold, and exactly the same amount of revenue is raised, as there would be without a debt ceiling; only now, some of the Treasuries are sold by the Federal Reserve instead of the Treasury, and the Federal Reserve passes the raised revenue to the Treasury. That's it.
Ronya, I mean this as respectfully as possible, as you are the smartest dog I have ever met. But the moment you used the word "Treasuries" you lost 75% of the voting population.
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Tiger BurningDig if you will, the pictureRegistered User, SolidSaints Tuberegular
There was a law professor on NPR last night saying that another option existed: that the government could offer transferable IOUs to people in lieu of cash. He stated that because they (the IOUs) wouldn't specify when they would be paid, they wouldn't be debt. I am dubious, as the constitutional division of powers isn't that specific. But he thought that banks would be willing to accept these IOUs at a small discount, and that the Old People Rage that ensued would resolve the situation in congress quickly.
Basically, @Synthesis, if you don't understand how the collapse of the US economy would be as damaging as the Eurozone scenario I really don't know how to help you.
I'm still waiting for a plausible scenario where four nuclear missiles are neatly fired at four cities without the requirement that multiple European nations tearing apart a massive economic entity, and then everything stops. I have no doubt the default would be incredibly damaging, both as it happened and as it became apparent that there was no eleventh hour option, but the deaths of tens of millions of both producers and consumers combined the actual physical destruction of a large chunk of the world economy seems more immediately severe.
Now, as to the long term ramifications, personally I think this gets into the sort of highest-government economic deal making that is extremely difficult to speculate about. But if nothing could be done, which might be the cae, it could indeed be much worse, especially since it wouldn't be accompanied by the growth through investment in rebuilding accompanied by war.
You can wait as long as you like, a limited nuclear exchange does not necessitate a world war.
A default of American debt means the collapse of the dollar, a global depression at least as deep as the 1930s, and a rush to find a replacement world currency which does not currently exist.
Not to mention the likely military conflicts that would arise from this crisis.
I know it is a favorite passtime of yours to try to undercut the idea of American hegemony, but the facts aren't with you here.
Or you're being far too caught up in the logistics of nuclear war.
If you can describe that plausible scenario that manages not to exist in a vacuum, please do. In the meantime, those concerns are absolutely because of the nature of American hegemony. Is American economic strength--indirectly, directly, and tangentially through that, the world economy--completely insulated from European investors and consumers? Of millions or tens of millions of them being killed, and further tens being mobilized into war? Because that's what any incident far less severe than "nuclear exchange" entails. I absolutely do think this would lend itself to a situation worse then the early onset of the Great Depression (then again, I assume the same about the the definitive conclusion by the rest of the world of an American default). The Progression, over time, is something I don't want to speculate about because it's so open to variable (which makes it an unfortunate comparison, given that the Depression grew over years).
I don't think avoiding underestimating the horrific costs associated with a war--much less a nuclear war--isn't being too caught up in logistics. We are literally talking about details here, aren't we? If you're honestly describing a really fantastic scenario where a handful of missiles are just exploded over unoccupied portions of Europe, like the combined arsenals of France and Germany just being demolished for the hell of it, that could be it, but that really doesn't say "limited nuclear exchange" to me in the least. There's a reason I hate metrics like this. It's like saying "If every bank in Europe (or elsehwere) was robbed in a massively successful heist." It may be as simple as a case of "deliberate, disastrous choices leading" and "deliberate, disastrous choices that involve fifty or more times the explosive power used in Hiroshima," assuming we were only talking about a really small number of missiles.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
Could you expand upon "miscellaneous assets"? I'm genuinely interested in this--here I'm thinking of its influence over the course of spending alongside the immediate wealth it can call upon, but I could be off base. Foreign currency reserves, bonds, its portion of corporate ownership...?
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
No, but when anyone with an ounce of circumspection asks "Why aren't you governing?", they don't even have to pretend that they are anymore- they can just say pout and say Obama had to be stopped.
I don't actually think this is all that different than what they have been doing, it's just that the Republican party is so close to having a massive meltdown that giving them something to reunite against might be too charitable.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
If the media is misrepresenting the issue (HI FOX) then the President, Democratic Caucus, and anyone who understands needs to constantly and consistently set them straight. Yes, it's complicated but sorry 'merica you'll have to put on your thinking caps.
My father used to have these little economic primers, they were cartoons but they gave a basic understanding of monetary policy all simple but relatively thorough. I'm not sure about the intended audience, but I could follow it well enough as a child. What is money, what is the Fed, things of that nature. I wish I could find them. I'd scan 'em all.
Second, Tea Party-minded Members of Congress need to explain to the American people that breaching the debt ceiling is not a default on America’s debt. This is a common misconception in the public, largely due to misleading media reports and political statements. The fact is that hitting the debt ceiling would simply mean the federal government would have to balance the budget in one day. Social Security, Medicare, defense, and interest payments could all be covered, with a small amount of room to spare.
This
this person doesn't know how anything works at all
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Tiger BurningDig if you will, the pictureRegistered User, SolidSaints Tuberegular
Could you expand upon "miscellaneous assets"? I'm genuinely interested in this--here I'm thinking of its influence over the course of spending alongside the immediate wealth it can call upon, but I could be off base. Foreign currency reserves, bonds, its portion of corporate ownership...?
Debt ceilings are a sensible political instrument that exists in actually-existing non-crazy countries; Germany has it by legislation and Switzerland by constitutional amendment. However, a key feature of these is that they have sensible designated outcomes for what happens when no ceiling-compatible budget is passed, and electoral bodies are simply incentivized in some way to respect the limit (by, for instance, having another body get to design the budget instead if their own budget goes over).
However our system is designed so congress can pass a budget the designates spending then later refuse to raise the ceiling to pay for the exact same budget.
This situation is created by shitty political optics on the part of our media really. If the GOP really wanted this fight they should have had it when we passed the last continuing resolution to fund the federal government. The reality is 1: they don't have the political power to control the budgetary process 2. They have a bad track record with shutting down the government in the past. so ywe arrive at the debt ceiling which they can try to force policy changes they couldn't during the budgetary process AND pretend its about the debt.
The second sanest is that, using a trick of the law that lets the treasury mint platinum coins of any denomination, we just bring out a trillion dollar coin, stick it in an account, and pretend that this all makes sense.
... man what. Isn't this the "print more money" solution which fucks the value of the currency?
Debt can't go above x on paper.
Mint coin worth 1 trillion.
Federal Reserve "buys" coin from Treasury.
Debt, (on paper) is now x - 1 trillion.
We can now borrow again.
Wait, so the coin isn't a coin in the sense of being currency, it's something that is bought so that...
No, wait, that makes no sense because it'd have to have some actual currency value...
I... am probably going to stay out of this, it sounds way too big for me to understand.
I could be wrong, but this is predicated on the understanding that the United States is wealthy enough only to have to do this once--or rather, to do it and immediately undo the practical effects to stave off default.
No one's suggesting that supercoins be issued indefinitely into the future. I think.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
Right, it's backed by the sheer wealth that can be called upon. Makes sense.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
That's the thing that's weirding me out. If I understand it right, the government's collateral for loans is given to itself, it's like a weird loop that barely makes sense.
hmm
no, you see, the Treasury gets to administer the legislated budget. It gets to say: you own this, you own that, to the assorted departments. the Federal Reserve is a bank. It can't take away the stuff that depositors put there. It's not selling "the government"'s stuff. It's selling its own stuff, the vast hoard of assets which it owns for the specific purpose of pursuing its mandate. the infamous Federal Reserve balance sheet which is where all that quantitative-easing stuff sits.
I'm going to assume the Reserve isn't in any position to sell aircraft carriers or parts of the Midwest--but to promise actual capital. And we're talking about a default, which would lead to a exponential decline in the value of that ability both with the damage to the economy and to of a lack of trust for the aforementioned reasons.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
So its dipping into the piggy bank? How long can we float on the trillion dollar coin?
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
The coin option also only works if we assume that soon after a real budget/debt ceiling raise is passed.
Otherwise the uncertainty starts creeping back up and we get the same panic anyway.
Second, Tea Party-minded Members of Congress need to explain to the American people that breaching the debt ceiling is not a default on America’s debt. This is a common misconception in the public, largely due to misleading media reports and political statements. The fact is that hitting the debt ceiling would simply mean the federal government would have to balance the budget in one day. Social Security, Medicare, defense, and interest payments could all be covered, with a small amount of room to spare.
This
this person doesn't know how anything works at all
It's okay, we don't need to pay our government workers during that time, and the Federal government doesn't do anything important other than SS,.Medicare, and defense anyway.
It would be funny to see what happens when states with high Tea Party representation stop getting any federal funding for anything though.
SteamID : same as my PA forum name
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
The second sanest is that, using a trick of the law that lets the treasury mint platinum coins of any denomination, we just bring out a trillion dollar coin, stick it in an account, and pretend that this all makes sense.
... man what. Isn't this the "print more money" solution which fucks the value of the currency?
Debt can't go above x on paper.
Mint coin worth 1 trillion.
Federal Reserve "buys" coin from Treasury.
Debt, (on paper) is now x - 1 trillion.
We can now borrow again.
Wait, so the coin isn't a coin in the sense of being currency, it's something that is bought so that...
No, wait, that makes no sense because it'd have to have some actual currency value...
I... am probably going to stay out of this, it sounds way too big for me to understand.
I could be wrong, but this is predicated on the understanding that the United States is wealthy enough only to have to do this once--or rather, to do it and immediately undo the practical effects to stave off default.
No one's suggesting that supercoins be issued indefinitely into the future. I think.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
Right, it's backed by the sheer wealth that can be called upon. Makes sense.
not quite; it's predicated on the specific understanding that the Federal Reserve has tons and tons of assets to sell
That's the thing that's weirding me out. If I understand it right, the government's collateral for loans is given to itself, it's like a weird loop that barely makes sense.
hmm
no, you see, the Treasury gets to administer the legislated budget. It gets to say: you own this, you own that, to the assorted departments. the Federal Reserve is a bank. It can't take away the stuff that depositors put there. It's not selling "the government"'s stuff. It's selling its own stuff, the vast hoard of assets which it owns for the specific purpose of pursuing its mandate. the infamous Federal Reserve balance sheet which is where all that quantitative-easing stuff sits.
I'm going to assume the Reserve isn't in any position to sell aircraft carriers or parts of the Midwest--but to promise actual capital. And we're talking about a default, which would lead to a exponential decline in the value of that ability both with the damage to the economy and to of a lack of trust for the aforementioned reasons.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
So its dipping into the piggy bank? How long can we float on the trillion dollar coin?
A trillion dollars worth of spending, but the uncertainty will start to eat away if it goes on longer than, say, six months or so.
Were going over the ceiling by ~1 trillion, and the plan is to cover for ~1 trillion, so essentially just this budget. So 1 year. right?
And we can technicly keep doing it as long there is bonds to exchange it for, right? I dont get how we figure out our quantity/quality of bonds though.
DiannaoChong on
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
No I mean by minting 100 such coins, the possibility of using the debt ceiling as a wedge is utterly removed for the forseeable future instead of for a year or two. It will no longer be an issue.
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
No I mean by minting 100 such coins, the possibility of using the debt ceiling as a wedge is utterly removed for the forseeable future instead of for a year or two. It will no longer be an issue.
Well you can't literally do a 100 of them, and really if you start doing it too much you WILL cause inflation we don't want.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
3DS CODE: 3093-7068-3576
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AManFromEarthLet's get to twerk!The King in the SwampRegistered Userregular
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
We should be so lucky to have an impeachment of Obama to campaign on in 2016. No chucklefuck would be able to Both Sides Are Bad that shit.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
We should be so lucky to have an impeachment of Obama to campaign on in 2016. No chucklefuck would be able to Both Sides Are Bad that shit.
Are you kidding? The entire republican house could engage in child sacrifice to the Great Old Ones and emnme and spool32 would be going on about how both sides are bad because obama is takin' our guns.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
What are they going to do? Refuse to re-elect him for a third term?
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
We should be so lucky to have an impeachment of Obama to campaign on in 2016. No chucklefuck would be able to Both Sides Are Bad that shit.
Are you kidding? The entire republican house could engage in child sacrifice to the Great Old Ones and emnme and spool32 would be going on about how both sides are bad because obama is takin' our guns.
Yes, but the American people aren't that dumb.
If they try to impeach Obama over TDC, well, God just let us keep the Senate at the very least.
Unless Democrats fold into themselves like the worthless vapor they used to be.
The coin would likely become another rallying point around the idea that Obama is some outsider usurper. The actual mechanics of the coin take longer than 15 seconds to explain even assuming a fairly grounded knowledge of how the Fed and Treasury work. Far easier for the right to characterize it as the President printing his own money to pay for Obamacare, and the rest of the media to tacitly accept that by continually discussing it in those terms.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
Yeah, can you imagine if the Republican party used a strategy of complete global obstructionism? That's quite the threat at this point.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
Could you expand upon "miscellaneous assets"? I'm genuinely interested in this--here I'm thinking of its influence over the course of spending alongside the immediate wealth it can call upon, but I could be off base. Foreign currency reserves, bonds, its portion of corporate ownership...?
GIS'ed graph:
Agency: federal agency debt securities held outright; swaps: central bank liquidity swaps; Maiden 1: net portfolio holdings of Maiden Lane LLC; MMIFL: net portfolio holdings of LLCs funded through the Money Market Investor Funding Facility; MBS: mortgage-backed securities held outright; CPLF: net portfolio holdings of LLCs funded through the Commercial Paper Funding Facility; TALF: loans extended through Term Asset-Backed Securities Loan Facility plus net portfolio holdings of TALF LLC; AIG: sum of credit extended to American International Group, Inc. plus net portfolio holdings of Maiden Lane II and III plus preferred interest in AIA Aurora LLC and ALICO Holdings LLC; ABCP: loans extended to Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility; PDCF: loans extended to primary dealer and other broker-dealer credit; discount: sum of primary credit, secondary credit, and seasonal credit; TAC: term auction credit; RP: repurchase agreements; misc: sum of float, gold stock, special drawing rights certificate account, and Treasury currency outstanding; other FR: Other Federal Reserve assets; treasuries: U.S. Treasury securities held outright.
Some private, some public.
The Fed selling Treasuries is the most straightforwardly kosher; the Fed selling its private assets to fund the Treasury is dubious. The distinction doesn't matter from the Fed's own perspective - the Fed just wants to own whatever it needs to get traction on monetary aggregates. The point of the Fed balance sheet is not to earn money from the portfolio! But it would affect the amount of Treasuries versus other securities in the market if the Fed chose to sell non-Treasuries instead, and then the move would have Real Effects rather than just being accounting trickery.
The platinum coin option would just be tantamount to scratching out some amount of "US Treasury securities" and substituting "peculiar form of Treasury currency".
So its dipping into the piggy bank? How long can we float on the trillion dollar coin?
No; it's dipping into an accounting fiction. The Federal Reserve would still own the same amount of Treasury liabilities (which show up as assets on its own balance sheet). Only this liability is of a kind that doesn't count against the debt ceiling.
the fear is that a sufficiently large minority of republicans actually want debt default to happen, out of a misunderstanding of what happens when this occurs, and so they are actively interested in a brinkmanship which makes them kingmaker. as a matter of legislative dynamics, the jumbo coin would only be needed once
as a matter of macroeconomic policy, the Fed and the Treasury could keep it up for as long as the Fed has assets to sell. Once the Fed has run out, then the Treasury will have to monetize debt to keep it up, which is liable to be just as destructive as wholesale default. the Fed has lots, though.
Hey, for that matter, what are they saying will happen with default anyway?
No I mean by minting 100 such coins, the possibility of using the debt ceiling as a wedge is utterly removed for the forseeable future instead of for a year or two. It will no longer be an issue.
Well you can't literally do a 100 of them, and really if you start doing it too much you WILL cause inflation we don't want.
It's one and done.
Why would it cause inflation if none of those coins enter circulation?
No I mean by minting 100 such coins, the possibility of using the debt ceiling as a wedge is utterly removed for the forseeable future instead of for a year or two. It will no longer be an issue.
Well you can't literally do a 100 of them, and really if you start doing it too much you WILL cause inflation we don't want.
It's one and done.
Why would it cause inflation if none of those coins enter circulation?
Because the coins *do* cause inflation, but it's about equal to increasing the debt ceiling. If it's just once, that's not so bad. If it is 100 trillion or a reasonable number, things start getting tricky.
And the more we lean on it, the more the world is going to start looking for a different reserve currency.
Posts
http://www.teapartypatriots.org/2013/01/americas-opportunity-with-the-debt-ceiling/
in short, a curious certainty that the automatic outcome will be slashes to programs they dislike rather than actual debt default
Both would suck pretty fucking hard. I don't think it matters how hard either of them would suck in relation to one another.
Because an article whose link I have lost said that the economic fallout of the US defaulting on its debt the way the Teapers want us to would be equal to a limited nuclear exchange in Europe.
the federal reserve owns treasuries and tons of other miscellaneous assets already. The coin idea basically recycles treasuries. It's "actual capital" insofar as the original Treasuries were "actual capital". There is no default in the proposal.
Ohhh okay, I guess I missed that. If you find the link though, I'd be interested in reading it. These threads always have the best articles.
The coin, as an artificially constructed solution to an artificially constructed problem, is ingenious. As a talking point in an already dysfunctional media, it will likely embolden the right into COMPLETE GLOBAL OBSTRUCTIONISM in a bid to stop what they'll say is an existential threat.
Assuming those outcomes are true, a World War of somekind is certainly not out of the question. We got WWII out of the last mass global depression. Which, I believe reinforces your argument.
What are they going to do? Refuse to re-elect him for a third term?
Within that context, the politically "best" solution is probably just to dare the Supreme Court to rule on a default first, then use the coin as a fallback position - I've not heard a reason why this couldn't be done (though the reality there I suppose is that it's a "soft landing" on the idea that the US is definitely going to default at some point in the next 10 years, and it gives the markets time to gracefully tank the dollar's value unless the problem is fixed).
Ronya, I mean this as respectfully as possible, as you are the smartest dog I have ever met. But the moment you used the word "Treasuries" you lost 75% of the voting population.
So, option 4!
If you can describe that plausible scenario that manages not to exist in a vacuum, please do. In the meantime, those concerns are absolutely because of the nature of American hegemony. Is American economic strength--indirectly, directly, and tangentially through that, the world economy--completely insulated from European investors and consumers? Of millions or tens of millions of them being killed, and further tens being mobilized into war? Because that's what any incident far less severe than "nuclear exchange" entails. I absolutely do think this would lend itself to a situation worse then the early onset of the Great Depression (then again, I assume the same about the the definitive conclusion by the rest of the world of an American default). The Progression, over time, is something I don't want to speculate about because it's so open to variable (which makes it an unfortunate comparison, given that the Depression grew over years).
I don't think avoiding underestimating the horrific costs associated with a war--much less a nuclear war--isn't being too caught up in logistics. We are literally talking about details here, aren't we? If you're honestly describing a really fantastic scenario where a handful of missiles are just exploded over unoccupied portions of Europe, like the combined arsenals of France and Germany just being demolished for the hell of it, that could be it, but that really doesn't say "limited nuclear exchange" to me in the least. There's a reason I hate metrics like this. It's like saying "If every bank in Europe (or elsehwere) was robbed in a massively successful heist." It may be as simple as a case of "deliberate, disastrous choices leading" and "deliberate, disastrous choices that involve fifty or more times the explosive power used in Hiroshima," assuming we were only talking about a really small number of missiles.
Could you expand upon "miscellaneous assets"? I'm genuinely interested in this--here I'm thinking of its influence over the course of spending alongside the immediate wealth it can call upon, but I could be off base. Foreign currency reserves, bonds, its portion of corporate ownership...?
No, but when anyone with an ounce of circumspection asks "Why aren't you governing?", they don't even have to pretend that they are anymore- they can just say pout and say Obama had to be stopped.
I don't actually think this is all that different than what they have been doing, it's just that the Republican party is so close to having a massive meltdown that giving them something to reunite against might be too charitable.
If the media is misrepresenting the issue (HI FOX) then the President, Democratic Caucus, and anyone who understands needs to constantly and consistently set them straight. Yes, it's complicated but sorry 'merica you'll have to put on your thinking caps.
My father used to have these little economic primers, they were cartoons but they gave a basic understanding of monetary policy all simple but relatively thorough. I'm not sure about the intended audience, but I could follow it well enough as a child. What is money, what is the Fed, things of that nature. I wish I could find them. I'd scan 'em all.
This
this person doesn't know how anything works at all
It owns a whole bunch of mortgages, for a start!
However our system is designed so congress can pass a budget the designates spending then later refuse to raise the ceiling to pay for the exact same budget.
This situation is created by shitty political optics on the part of our media really. If the GOP really wanted this fight they should have had it when we passed the last continuing resolution to fund the federal government. The reality is 1: they don't have the political power to control the budgetary process 2. They have a bad track record with shutting down the government in the past. so ywe arrive at the debt ceiling which they can try to force policy changes they couldn't during the budgetary process AND pretend its about the debt.
So its dipping into the piggy bank? How long can we float on the trillion dollar coin?
Otherwise the uncertainty starts creeping back up and we get the same panic anyway.
...what if we constructed a large wooden badger?
It's okay, we don't need to pay our government workers during that time, and the Federal government doesn't do anything important other than SS,.Medicare, and defense anyway.
It would be funny to see what happens when states with high Tea Party representation stop getting any federal funding for anything though.
A trillion dollars worth of spending, but the uncertainty will start to eat away if it goes on longer than, say, six months or so.
So mint 100x trillion dollar coins?
And we can technicly keep doing it as long there is bonds to exchange it for, right? I dont get how we figure out our quantity/quality of bonds though.
The coin is really a one and done deal.
It isn't something we're going to be able to use routinely.
THIS IS WHY YOU DON'T VOTE FOR REPUBLICANS
Well you can't literally do a 100 of them, and really if you start doing it too much you WILL cause inflation we don't want.
It's one and done.
While I normally agree with this sentiment and generally think that second term presidents don't do enough during their second term there is a recent example in history that gives me pause.
Al Gore backed away from the wildly popular President Clinton because of the whole impeachment debacle. Clinton is largely left out of campaigning because Gore distancing himself and Gore ends up "losing" a close race that didn't have to be all that close.
Now I doubt that Obama being Obama would actually lead to this situation in 2016 but you never know.
We should be so lucky to have an impeachment of Obama to campaign on in 2016. No chucklefuck would be able to Both Sides Are Bad that shit.
here, have a throwaway TV reference instead:
the "no true scotch man" fallacy.
Are you kidding? The entire republican house could engage in child sacrifice to the Great Old Ones and emnme and spool32 would be going on about how both sides are bad because obama is takin' our guns.
until the GOp regains some semblance of sanity or loses the House we're going to have nothing but temporary fixes anyway.
Yes, but the American people aren't that dumb.
If they try to impeach Obama over TDC, well, God just let us keep the Senate at the very least.
Unless Democrats fold into themselves like the worthless vapor they used to be.
GIS'ed graph:
Some private, some public.
The Fed selling Treasuries is the most straightforwardly kosher; the Fed selling its private assets to fund the Treasury is dubious. The distinction doesn't matter from the Fed's own perspective - the Fed just wants to own whatever it needs to get traction on monetary aggregates. The point of the Fed balance sheet is not to earn money from the portfolio! But it would affect the amount of Treasuries versus other securities in the market if the Fed chose to sell non-Treasuries instead, and then the move would have Real Effects rather than just being accounting trickery.
The platinum coin option would just be tantamount to scratching out some amount of "US Treasury securities" and substituting "peculiar form of Treasury currency".
No; it's dipping into an accounting fiction. The Federal Reserve would still own the same amount of Treasury liabilities (which show up as assets on its own balance sheet). Only this liability is of a kind that doesn't count against the debt ceiling.
It's almost like they don't give a shit about the debt
*gasp*
see also the Ryan budget which guts every major federal program but still manages to lose money because it cut taxes so much
Why would it cause inflation if none of those coins enter circulation?
Because, as should be the title of the thread, it's not about the deficit or the debt. It's about stealing money from the poor and elderly.
Because the coins *do* cause inflation, but it's about equal to increasing the debt ceiling. If it's just once, that's not so bad. If it is 100 trillion or a reasonable number, things start getting tricky.
And the more we lean on it, the more the world is going to start looking for a different reserve currency.
Which would be pretty bad for the dollar.