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re: Trillion Dollar Coin Idea - Why Doesn't This Make Sense in My Head?
Posted on 1/7/13 at 7:20 am to Doc Fenton
Posted on 1/7/13 at 7:20 am to Doc Fenton
quote:
No, the best I can tell, the idea is to make the coin legal tender, in which case it would definitely be worth $1 trillion.
I guess it depends on what we consider value. If it is legal tender I can buy a trillion dollars worth of stuff in the US for it. But like drewnbrla and foshizzle said, in the absence of the US government you wouldn't be able to sell this coin for $1 trillion, so it's basically no different and no more imaginative than a trillion dollar bill.
quote:
This still happens on a small scale when, for example, the U.S. Mint creates and sells sets of commemorative quarters for the 50 states, as the U.S. Treasury estimates that it has earned about $6.3 billion from these since it launched the program in 1999.
I can see the parallel, but that money circulates just like regular quarters do.
I guess I'm just confused about why this is something unique, or clever, or whatever supporters are calling it.
2
Posted on 1/7/13 at 7:33 am to ZereauxSum
quote:
But like drewnbrla and foshizzle said, in the absence of the US government you wouldn't be able to sell this coin for $1 trillion, so it's basically no different and no more imaginative than a trillion dollar bill.
Well, no, but a trillion dollar bill is still worth a trillion dollars so long as it's legal tender.
If the Treasury Department decided to use the legal tender value of the coin to pay all its Medicare bills for a year or two, then it could just go ahead and do this (presumably electronically after taking the physical coin out of circulation). I'm guessing that there would be some kind of promises not to do that which would go along with the creation of the coin, but then again, this is all just a zany idea that's not really serious and is never going to happen.
What is serious, however, is the future prospect of the U.S. Treasury using seigniorage in the future ... albeit not with $1 trillion coins.
Posted on 1/7/13 at 7:38 am to ZereauxSum
quote:
I guess I'm just confused about why this is something unique, or clever, or whatever supporters are calling it.
As for this, the net debt level of the U.S. government would be reduced by $1 trillion, thereby getting around the need to raise the debt ceiling. That's the whole point, right? It's intended to just be a legal technicality in which the coin is never actually used, although as legal tender, it potentially could be used.
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