Should the US Treasury mint a Trillion-dollar coin?

[luke viia]

is it still possible to earn some decent bitcoins nowadays?

[goDel]

I think the most telling point Krugman makes is about the idiocy behind the whole debt ceiling discussion: Congress tells the administration what it must spend its money on (and how much), and it tells how much taxes it can collect.

 

So if the administration listens to the current congress on the debt ceiling, it can't do what congress told it to spend the money on. And if it doesn't listen to congress, it can do what congress told it to do. It makes no sense, and it says a lot about the short term memory in current congress.

 

A one trillion coin is a nonsense solution to a nonsense problem. To that extend I think Krugman has a point. (see ABC's this week for a discussion)

 

One of the moral aspects which pops up (referred to by Smetty) is that it may seem that if normal accountancy-rules seem to stop working at a national level (simply put: in- and outcome must be balanced), individual people may think the same. Especially when they're having financial problems on their own. Thing is, although I'm not that well versed in the matter, is that debt on a national level works somewhat different to debt on a personal level.

 

The difference basically comes down to the fact that a nation is not a person. The ability of a person to pay for (future) debt is an entirely different thing to that of a nation. Especially the US. And the situation in Greece is actually interesting, because it shows an extreme example of a nation which is unable to fulfill its future and current debts. On an individual level these things happen on an almost daily business (one of the odd things is that the US is extremely flexible about people going bankrupt), on a national level it's like have an atom bomb exploding in a country. The difference with the US is that even its current economy is so big, it'll always be able to borrow money from other nations. To the point where it can borrow more than the economy is actually worth. That is strange and in the end you could ask yourself "why!?". And maybe the answer is simply: "trust". Nations trust that the US will be able to fulfill its debt. Ironically, if it couldn't, the entire world would be bankrupt. (And this is almost why the US practically can't go bankrupt).

 

I must admit though, the longer you think about it, the less sense it makes. And it may seem immoral with respect to individuals in financial need, but the point I was trying to make is that a nation is a fundamentally different thing to a person. So, it's not that there's a different set of economic rules on a national level, it's that a nation is a fundamentally different concept to that of an individual. I hope this makes any sense.

[SR4]

I think the most telling point Krugman makes is about the idiocy behind the whole debt ceiling discussion: Congress tells the administration what it must spend its money on (and how much), and it tells how much taxes it can collect.

 

So if the administration listens to the current congress on the debt ceiling, it can't do what congress told it to spend the money on. And if it doesn't listen to congress, it can do what congress told it to do. It makes no sense, and it says a lot about the short term memory in current congress.

 

A one trillion coin is a nonsense solution to a nonsense problem. To that extend I think Krugman has a point. (see ABC's this week for a discussion)

 

One of the moral aspects which pops up (referred to by Smetty) is that it may seem that if normal accountancy-rules seem to stop working at a national level (simply put: in- and outcome must be balanced), individual people may think the same. Especially when they're having financial problems on their own. Thing is, although I'm not that well versed in the matter, is that debt on a national level works somewhat different to debt on a personal level.

 

The difference basically comes down to the fact that a nation is not a person. The ability of a person to pay for (future) debt is an entirely different thing to that of a nation. Especially the US. And the situation in Greece is actually interesting, because it shows an extreme example of a nation which is unable to fulfill its future and current debts. On an individual level these things happen on an almost daily business (one of the odd things is that the US is extremely flexible about people going bankrupt), on a national level it's like have an atom bomb exploding in a country. The difference with the US is that even its current economy is so big, it'll always be able to borrow money from other nations. To the point where it can borrow more than the economy is actually worth. That is strange and in the end you could ask yourself "why!?". And maybe the answer is simply: "trust". Nations trust that the US will be able to fulfill its debt. Ironically, if it couldn't, the entire world would be bankrupt. (And this is almost why the US practically can't go bankrupt).

 

I must admit though, the longer you think about it, the less sense it makes. And it may seem immoral with respect to individuals in financial need, but the point I was trying to make is that a nation is a fundamentally different thing to a person. So, it's not that there's a different set of economic rules on a national level, it's that a nation is a fundamentally different concept to that of an individual. I hope this makes any sense.

 

awesome post (chen too).....and I def. think it makes sense in economic theory, but yeah, like previously stated, there should be massive moral implications to this in terms of determining worth of....well....everything.

 

I mean, according to that part that I bolded and underlined, aren't you essentially stating that the economy is now in a hyper-theoretical phase, debt "exists" but isn't applicable in terms of consequence? Shouldn't that be some sort of indication that the economic system is a failure on some major level?

 

I mean its hard for me to explain what I mean here, but essentially isn't this saying, debts can be maintained and not paid because trust, debts cannot be maintained but because of trust we continue to trust...? Its like some sort of meta-insanity...I guess this is what Im having trouble understanding.

 

The consensus that seems to be brewing is that literally no economist seems to completely "know" what's going on.....its like we've been in completely uncharted territory since the bank failures, and where there were strange little islands or stars we could use for rough coordinates in the present, we increasingly sail inward towards more of a blank void.

[goDel]

On one hand I understand your point about the massive moral implications, but on another I feel that implies a fundamental misunderstanding of how different persons are to nations.

 

Take for instance the timescale a nation exist verus that of an individual. A nation theoretically could live (and fulfill its debts) indefinitely. That's not the case for a person. Debt on an individual level can stop to exist at any moment (say by death).

 

 

edit.: the extreme rational way of thinking underlying the economy in a way is immoral. The irony is that from an economic point of view, the opposite would be the case. From an economic point of view, a person which would reason this way would be immoral.... OK, I'll stop here. My head hurts O.o

[goDel]

only given value when people accept that it has value.

 

when the apocalypse comes, that coin will be the most useless thing in the world.

 

And ironically, it wouldn't even matter. At that point in time, the current administration would have paid for it's obligations with that 'coin'. And that's what counts. Not the future value of the coin itself. That coin is just a physical representation of a number in a balance-sheet.

[SR4]

On one hand I understand your point about the massive moral implications, but on another I feel that implies a fundamental misunderstanding of how different persons are to nations.

 

Take for instance the timescale a nation exist verus that of an individual. A nation theoretically could live (and fulfill its debts) indefinitely. That's not the case for a person. Debt on an individual level can stop to exist at any moment (say by death).

 

 

edit.: the extreme rational way of thinking underlying the economy in a way is immoral. The irony is that from an economic point of view, the opposite would be the case. From an economic point of view, a person which would reason this way would be immoral.... OK, I'll stop here. My head hurts O.o

 

 

ok, i see what you mean.....so....ok, replace my use of "moral" with "pragmatic"...is it any less applicable to the structure? I mean, "it is pragmatic because it is" is circular and self-imposed....isn't that a problem?

[goDel]

See it this way: because two nations can exist indefinitely, they can lend each other an (practically) infinite amount money. (They have infinite time to pay back).

 

Is there a pragmatic problem? From an economic point of view, only if one nation exists longer than the other. Otherwise, I'm not sure there actually is. It's hard to give a good answer, but I feel the problem arises from the basic fact that nations are practically like superhumans. Highlanders, if you will. And like highlanders, they have practically unlimited amounts of resources just because they live indefinitely. It's unfair with respect to normal people. It feels immoral. But rationally/economically speaking, it's business as usual. (Also notice how companies/corporations are a sort of intermediate between person and nations)

[YO303]

The government should invest in secret mining expeditions to the moon.

 

And this isn't a joke response, its time for first world government to wake up and start mining resources from the moon.

[lumpenprol]

let's make a trillion dollar mint. I bet it would use up the global supply of peppermint extract. Then everyone would want a piece of our mint.

[ghOsty]

[joshuatxuk]

 

Give what back?

 

 

skip to 0:50

 

Real life imitates absurd satirical animated shows more often than not these days.

[MisterE]

So the serious side of this debate is just about whether or not america should "print money" to pay off it's debts?

i wasn't aware that 'paying off debts' was ever part of anyone's plan. that's silly talk! everyone knows that to get out of debt, you spend more money you don't have, on other stuff that the majority of the people don't want but don't know about! so i think they should go ahead and mint these coins, and we can see how many of them obama has to spend on things like cellphones for people who's career is pooping out burdens on society, and on fatty-boom-batty 'bailout' kickbacks to big wall street types and CEOs under the guise of 'jobs bills', or just by investing it in 'green energy' companies that any sane person would never invest in, and which he probably knew would go bankrupt. but hey the CEO doesn't go bankrupt, and i'm sure he/she (but it seems to mostly be 'he' under this admin) gets a 'little' take-away. and i'ts pure coincidence that half of them donated to the guy! entirely! but hey, giving money to big companies is for the greater good when it's a guy on the left doing it! it's to SAVE the econonizzle. when righties do it, it's shady! i guess? now lets go back out to the streets to protest that big old bad wallstreet!

 

anyway, i bet it would only take about 10 or 20 trillion more dollars before he can spend us out of debt. and the cost of the metal in the actual coins would be, comparatively, next to nothing. LETS DO THIS.

[Plarkreluke Banloboh]

"Don't mug y'self"

-Mike Skinner of The Streets.

[zkreso]

There's actually two questions bundled up in this whole thing.

 

1. Does the US government need to pay its debts at all?

 

and

 

2. Should the US government pay its debts with money they get from

a) Reducing government spending

b) Increasing taxes

or

c) Issuing more money (analogous to the coin idea)

 

Now if you answered question one with a no, you can just forget about question one and subsequently the whole coin nonsense. But it's question one that is the interesting one. Question two is more of a tossup (pun not intended)

[MisterE]

there's the other option- not paying debts and spending more money we don't have on other stuff.

 

what little money i have left, is on 'us' taking that route a while longer.

[DerWaschbar]

What's shocking to me is that there is no mention of how big the coin would be, which seems pretty important. If it's a huge coin then obv no problem, but if it's real small is pretty silly imo.

[DerWaschbar]

Hrm, pretty small then.

[Plarkreluke Banloboh]

I think the underlying problem is with the people running the world. They have been around so long they've developed senile-dementia but no-one has noticed yet.

[ghOsty]

I think the underlying problem is with the people running the world. They have been around so long they've developed senile-dementia but no-one has noticed yet.

I'm sure this was said in jest, but may be truer than you think...

[lumpenprol]

i just hope we can invent warp drive soon so we can colonize other worlds, and capitalism can expand indefinitely.

[SR4]

can we condense space into a consumable commodity?

 

 

solved.

[ghOsty]

So if one were to forge one of these said platinum coins could one become a trillionaire overnight?

 

Also on a more serious note, if some other nation were to mint themselves a similar platinum coin of equal size and weight would it too be worth a trillion dollars?

[SR4]

So if one were to forge one of these said platinum coins could one become a trillionaire overnight?

 

Also on a more serious note, if some other nation were to mint themselves a similar platinum coin of equal size and weight would it too be worth a trillion dollars?

 

 

im assuming not, going off of what godel and chen said....trust is the motivating factor (which still makes no sense to me)

[Guest cult fiction]

Imagining the NWO getting together in a shadowy board room... the leader gets up and says "We're going to let them go ahead with this trillion dollar coin thing because fuck it, what is the fucking point anymore? #yolo" and leaps out the window.

[ghOsty]

So if one were to forge one of these said platinum coins could one become a trillionaire overnight?

 

Also on a more serious note, if some other nation were to mint themselves a similar platinum coin of equal size and weight would it too be worth a trillion dollars?

 

 

im assuming not, going off of what godel and chen said....trust is the motivating factor (which still makes no sense to me)

That, to me doesn't make any sense. What is it that would give our coin any semblance of value then, other than "because we say so, that's why... And no, other countries we do not recognize your coin 'Murica only!"