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Mint trillion-dollar coins to solve debt ceiling?

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  • cjb Bountiful, UT
    Jan. 7, 2013 3:23 p.m.

    I read that if it weren't for interest on the debt which we are paying, our budget would be balanced, we are paying interest on our interest.

    Here is a thought, Why not 'mint trillion dollar coins' and pay our debt, take the lump of one time inflation, and vow never again (constitutionally) to get into debt without raising taxes to pay it off. If we try to get out of this hole the normal way, we really can't, due to our stupidity, we are too far in the hole.

    Here is another thought, we always get into stupid needless wars, if taxes were automatically raised sufficiently whenever we got into war, we would be less likely to do it, and if we did, we wouldn't stay in debt long if taxes were raised sufficiently.

  • Mark from Montana Aurora, CO
    Jan. 7, 2013 4:12 p.m.

    The interest on the national debt is running, I think, about 230 billion a year. Since we run a deficit of over a trillion, we are far from being able to just eliminate the interest and put the budget into balance.

    We need to make hard and difficult choices, but our politicians (Chaffetz, Hatch & company) are more worried about re-election and the 'party' then the country.

    We need a new group of elected officials who will tear apart the budget, eliminate the pork, then put in place only what we need. We could be in balance within a year or two and start paying down the debt.

    The first thing that needs to happen is to put all elected officials on the same health plan the the average citizen is on, namely either medicaid or medicare. Put their retirement plan into Social Security, then let the DC police be their bodyguards.

  • Shushannah Kendal, Cumbria
    Jan. 7, 2013 4:33 p.m.

    great idea... lose one of those and you're in trouble... mind you, if you *found* one... still think it's a great idea???

  • Ballplayer Spanish Fork, UT
    Jan. 7, 2013 4:42 p.m.

    Every basic econ class teaches that adding money to the money supply by printing cash (or the many other ways the government can manipulate the money supply) causes inflation. Adding several trillion dollars to the economy all at once seems like a monumentally stupid thing to do. Though since inflation is typically looked at as the friend of the indebted, maybe it will prevent foreclosures.

  • California Steve Hanford, CA
    Jan. 7, 2013 5:08 p.m.

    So are they going to send China one or two of those coins and call it even???

  • Hutterite American Fork, UT
    Jan. 7, 2013 5:09 p.m.

    Didn't 'the simpsons' try this plot?

  • Michael De Groote
    Jan. 7, 2013 5:11 p.m.

    @Ballplayer

    Maybe it is a "monumentally stupid thing" to mint such coins -- but it is is fascinating to think about. And if it functions as basically the same thing as raising the debt ceiling I wonder what it says about the whole debate.

  • JimInSLC Salt Lake City, UT
    Jan. 7, 2013 5:17 p.m.

    Want a war with China? Just toss them a couple of these coins and tell them our debt to them is paid. They'll turn around and dump them on the US economy. We'll then be like pre-WWII Germany when a wheelbarrel full of dollars couldn't buy a loaf of bread. Yeah, that'll be fun.

  • samhill Salt Lake City, UT
    Jan. 7, 2013 5:18 p.m.

    "Alan Krueger, chairman of the White House Council of Economic Advisers, said, 'It is quite clear that the economy will be better if Congress does its job and does what it routinely has done historically, which is raise the debt limit without problem.'"

    -----------------

    My first question to Mr. Krueger, and just about every other person I've heard talking about this topic, is; "Why in the world, after what has been routinely done historically, do you continue to refer to this as a debt -limit-?"

    Clearly, these people, have no idea what the word limit means.

    And, apparently, that goes for most of the country who continue to vote for people without any idea of its meaning.

    Until there is some increase in the value of simple honesty in our country, honestly talking about things, such as the meaning of a limit, is too much to hope for.

  • PGVikingDad Pleasant Grove, UT
    Jan. 7, 2013 5:23 p.m.

    "...The effects on the currency market and inflation are unclear, to say the least." Nonsense. Quite to the contrary, the effects are exceedingly clear: The U.S. dollar would be immediately and dramatically devalued, and inflation would immediately and dramatically accelerate. Both of these outcomes would be unavoidable. Bad, bad, bad idea; not even close to funny or novel.

  • Doogie South Jordan, Utah
    Jan. 7, 2013 5:35 p.m.

    This article is nonsense. Think about it folks. If we mint an additional $17 trillion that will make our country a banana republic. We have already lost the confidence of the rest of the world and it is starting to show by other countries not using the dollar as the world currency anymore. The deficit is there because government cannot control their spending. Take away non mandated spending (defense, education etc) and we still have a deficit. No one in congress is willing to make hard choices and they are demonizing the tea party who only aim is cut spending and are the only ones that are wiling to make hard choices. What does a banana republic mean for you and me? A banana republic is a politically unstable country that economically depends upon the exports of a limited resource (fruits, minerals), and usually features a society composed of stratified social classes, such as a great, impoverished working class and a ruling plutocracy, composed of the élites of business, politics, and the military. Sound familiar? Does the Zimbabwe inflation crisis have any meaning to anyone?

  • Shaun Sandy, UT
    Jan. 7, 2013 5:37 p.m.

    This idea would not be inflationary in the context of how our monetary system works. In fact it would lower our overall debt but this idea will never fly because it will actually save the taxpayer money.

  • Jake2010 bountiful, ut
    Jan. 7, 2013 5:47 p.m.

    They could make a Quintillion $ coin and it would be as worthless as a soggy paper bag.

  • Howard Beal Provo, UT
    Jan. 7, 2013 6:05 p.m.

    The question is how much debt can we have as a country (and we have had debt for a long, long time BTW). Paying off the debt in a timely matter won't happen. It's just plain mathematics. Any politician from the left or right that says different is a liar or stupid and probably both. So the question is whether having debt or deficit spending is actually crippling or does the economy runs somewhat freely of the government debt and debt itself isn't the destructive force everyone thinks?

  • procuradorfiscal Tooele, UT
    Jan. 7, 2013 6:08 p.m.

    Re: "Mint trillion-dollar coins . . . ."

    No need. The Bureau of Land Management is already sitting on more than 700 million acres of land, valued by various experts at between $18T and $44.5T.

    That doesn't include national parks, forests, wilderness areas, or monuments. It's just land, like any other, where bloated, distant federal government is the uninvolved absentee landlord, and where distant, uninvolved federal bureaucrats act the Sheriff of Nottingham role.

    Why not sell some or all of it, reserving public access to the best of it?

    That would at least have the virtue of cashing in on real, existing value that we, the people already own, instead of creating a phony, dangerous politcal loophole large enough for profligate liberals to drive an armored car through.

  • DN Subscriber 2 SLC, UT
    Jan. 7, 2013 9:12 p.m.

    Hey, great plan. If that works, than I plan on getting my crayons out and making up a bunch of really pretty $10,000 bills and use them to pay all my bills.

    Any talk about "trillion dollar coins" is just ignoring reality which is we are spending way too much, and handing the bills to our kids.

    What we should be doing is mailing every kid on their 16th birthday a bill for all the money they already owe to pay off what their elders have spent, and telling them how much more they will have to pay every year, just to cover existing debt and debt service. Of course, if they want any national defense, welfare, roads, or entitlement for the next year, they will have to pay for that as well.

    Oh, and all those pretty national park lands- I think those are already collateral for the loans to the Chinese. They will want to drill for oil after they take them over on default.

  • SS MiddleofNowhere, Utah
    Jan. 7, 2013 9:27 p.m.

    Who are you suggesting they sell all that land to? Those we owe money to? That would be awful, but believe it or not, the U.S. has already done that. China owns roads all over the U.S. It's crazy.

  • 1aggie SALT LAKE CITY, UT
    Jan. 7, 2013 10:38 p.m.

    Josh Barro is the lead writer for the Ticker, Bloomberg View's blog on economics, finance and politics. He's a pretty smart guy. Recently he suggested that "Obama should simply say that he will issue platinum coins as necessary to pay government bills if he cannot borrow. But, to avoid causing long-term inflation expectations to skyrocket, he should pledge that he will have the Treasury issue enough bonds to buy back all the newly issued currency as soon as it is allowed to do so.

    And then he should offer to sign a bill revoking his authority to issue platinum coins -- so long as that bill also abolishes the debt ceiling. The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations."

    This would solve the problem of GOP Congressmen trying to hold us hostage because they don't want to pay for the bills they passed.

  • rvalens2 Burley, ID
    Jan. 8, 2013 2:50 a.m.

    Why stop at just a few trillion dollar coins? Why not mint up a whole batch and give every man, woman and child a million dollars each to pay off their debts and have a good time.

    Oh wait, something like that already happened in Zimbabwe and look how it turned out for them.

    Can you imagine the panic at the banks when debtors start repaying their loans in next to worthless dollars? The irony of it all would put a smile on my face until I saw a loaf of bread selling for $1000.

  • JMT Springville, UT
    Jan. 8, 2013 6:10 a.m.

    I love this discussion!

    It proves beyond a reasonable doubt that America has become completely ignorant in all regards. We have finally fallen as a free people. As one comment noted, basic high school economics teaches you this is inflationary. History teaches this is what failed economies do, ultimately leading to war as the normal end consequence, frequently including either civil war or very close to it. Weimar Republic of Germany, instead of printing one coin printed tons of fake dollars to pay off their debt to the Allies at the end of WW1, circa 1920's. End result for those of you who refuse to learn from history, wheelbarrels of fake dollars to buy a loaf of bread.

    When the political dialogue in this country reaches a level that a weak high school teacher would give it an F, we have failed as a country.

    Since we are imploding our economy, why not do it right. Let's raise the minimum wage to $50/hr. Every 16-year old needs that kind of money. It'll work, trust me. It will. Now businesses may have to charge $75 for a Big Mac to afford those wages but hey...

  • raybies Layton, UT
    Jan. 8, 2013 6:26 a.m.

    Interesting article. I can see the point that: Raising the debt ceiling and printing more money are the same thing. And most folks see the absurdity of printing more money, but do not understand the debt thing.

  • I-am-I South Jordan, UT
    Jan. 8, 2013 6:46 a.m.

    economics 101. printing more money increases inflation. increasing government spending increases inflatiion. this is the silliest idea ever.

  • Albert Maslar CPA (Retired) Absecon, NJ
    Jan. 8, 2013 7:09 a.m.

    Someone receiving a credit card with a specified limit cannot overspend and demand that the credit card company increase the borrowing limit. But government does that all the time with the threat of financial collapse if the limit is not increased. The obvious answer is to manage and control spending but addicted spenders place the blame on limited credit.

  • J-TX Allen, TX
    Jan. 8, 2013 7:13 a.m.

    Wow, there are a whole lot of posters here with severely limited knowledge of economics.....

  • HighlandsHome Highland, Utah
    Jan. 8, 2013 8:19 a.m.

    I nominate that Richard Nixon's beautiful face grace this coin since he took us off the gold standard and sorta started this whole mess.

  • JBJepp Toquerville, UT
    Jan. 8, 2013 8:30 a.m.

    Wow.., this plot seems like a story I read as a kid.., it could maybe work again? All we have to do is find the Dark Lord Sauron's playbook and stoke up the forges with the fires of Mt. Doom. These should be hot enough to forge a few Trillion Dollar Platnium rings (they really don't need to be coins) and then decide who get's to be the Dark Lord Sauron. After we hold elections for the position, we could then distribute the Ruling Rings to those who would be satisfied to accept the subordinate roles as Elf Queens, Wizards and Kings. Maybe this time we rewrite the plot to keep the pesky hobbit-like creatures from feeling self-righteous enough to unravel the whole thing. Or better yet let's just keep the Ring in place on the Dark Lord's finger in our rewrite of this saga..,

  • 1aggie SALT LAKE CITY, UT
    Jan. 8, 2013 8:37 a.m.

    @ Albert Maslar

    Your analogy is not accurate in that there is no outside party (like a credit card company) needing to act. A more proper analogy would be a husband and wife spend money like crazy and then when the bills arrive the following month the husband decides he's not going to pay them. What would you advise in this case? Should he pay them or not?

  • Tekakaromatagi Dammam, Saudi Arabia
    Jan. 8, 2013 9:05 a.m.

    In the 10th century or so a Chinese dynasty invented paper currency. They were then destroyed and overthrown in the ensuing inflation they created when they started printing out lots and lots of money.

    Just a thought.

  • Tekakaromatagi Dammam, Saudi Arabia
    Jan. 8, 2013 9:09 a.m.

    Inflation is when the economy adjusts the money supply with the amount of total wealth. If the government minted extra currency that created enough inflation so that our money was worth only half as much, the government could then take their minted currency and pay down the debt in devalued money. We would still have the same amount of money on paper, but it would be worth half as much.

    It is a deceptive way to charge everyone a flat tax of 50%.

  • Joan Watson TWIN FALLS, ID
    Jan. 8, 2013 10:05 a.m.

    STUPIDITY REIGNETH!

  • Brave Sir Robin San Diego, CA
    Jan. 8, 2013 10:14 a.m.

    There's only one face that could even be considered to grace the new trillion-dollar coin: Obama's. He's the one who said "trillion is the new billion."

  • Res Novae Ashburn, VA
    Jan. 8, 2013 10:31 a.m.

    procuradorfiscal,

    Not so fast. The BLM *manages* land and subsurface mineral estates. Actual ownership of the land is a mix of federal/state governments and private parties. Much of the value of the land ($44T sounds fantastically overvalued) comes from rights to mineral/energy extraction -- commonly owned by private parties.

    Because the land valuation is tied to private party ownership interests, can you convince anyone to buy land that they can't fully utilize for themselves? (Unless the government expropriates the mineral rights from private parties, but that's far too leftwing an idea for capitalists like yourself!)

    Additionally, who are your buyers? Assuming the land is worth what is claimed, who is out there willing to buy enough to bail out the national debt? That's a staggering amount of money.

    And if it all goes up for sale, what happens to the land value (not to mention the rest of the country's real estate) with a glut of pristine natural real estate on the market? You just wiped out a good chunk of your value simply by flooding the market with the product.

    Between that proposal and trillion-dollar coins, some Econ 101 classes are in order.

  • atl134 Salt Lake City, UT
    Jan. 8, 2013 10:32 a.m.

    Actually the inflation thing with the coin is a misconception. The trillion dollar coin would not spur massive inflation. The reason is that it doesn't actually increase the money supply since it's held by the treasury (not going into circulation) and they'd turn it into treasury bonds like any other debt. The effect on inflation would be no different than just increasing the debt ceiling by a trillion.

  • atl134 Salt Lake City, UT
    Jan. 8, 2013 10:32 a.m.

    @JBJeep
    That's just silly. Obama is not allowed to spend a trillion dollar coin any way he sees fit. He still has to abide by the spending legislation set forth by Congress.

  • atl134 Salt Lake City, UT
    Jan. 8, 2013 10:34 a.m.

    @Brave Sir Robin
    The person on the coin has to be deceased so Obama and my original pick (Boehner) are out. I'd go with Reagan in that case since he's the one who started this recent trend of building massive deficit increases.

  • J-TX Allen, TX
    Jan. 8, 2013 3:59 p.m.

    atl134: I rarely agree with you, but Reagan is the right choice. Not that this argument has any merit.