Congressman Introduces Bill To Ban Minting of Trillion-Dollar Coin 1059
Dainsanefh writes with news that the new Congress isn't wasting any time getting back to work. From the article: "Lawmakers are still positioning themselves for a debt ceiling fight in a few months, but one Republican congressman wants to snuff out a particular idea immediately: the U.S. Treasury minting $1 trillion platinum coins to avert a debt ceiling showdown. Rep. Greg Walden (R-Ore.) has introduced a bill to specifically ban President Barack Obama from minting the coins. The trillion-dollar coin has been previously discussed on Slashdot:"
Re:Any member can introduce a bill but... (Score:5, Informative)
Actually it would require a two-thirds majority in both the House and the Senate to override a presidential veto. Unlikely.
The bill is redundant. (Score:3, Informative)
The constitution grants the power to coin money to the congress, not the executive.
Re:Can't America get its acts together ? (Score:5, Informative)
Re:Specifically a one trillion coin? (Score:4, Informative)
The thing that this coin farce is supposed to prove is that the debt ceiling is a construct invented by the Carter Administration with no real regulatory or constitutional basis. The constitution says that debt has to be paid. The constitution says all such bills must originate in the House, which has been controlled by extreme conservatives over the past two years.Once the spending is approved by the house, confirmed by the senate, and signed by the president, the money is authorized, and for all practical intents and purposes spent. If we do not have the money, it must be borrowed.
So, the ability to not build debt exists in the House of Representatives at the time the bills are debated, not much later when the bills are supposed to paid. There has been much talk about running the country responsibly. It is not responsible to put charges on our credit card knowing full well that we are going to have default.
Dropping the pretense of lawful governmnet (Score:1, Informative)
This entire concept of being able to mint a trillion dollar coin (because it's platinum and not gold, they don't have to go with the currently fixed price of 1 ounce for 42 dollars or something like that, so they want to do 1 ounce of platinum for 1,000,000,000,000 dollars) is clearly unconstitutional, it's terrible economics, it's horrendous admission that even minimal pretense of actually following the law in government is dropped at this point.
I mean this coin would be minted by the Treasury basically, so the Congress is no longer even taxing the people to run its insane business, it just creates money out of thin air. Of-course that's what the Fed has been doing for the Congress since 1917 anyway, but at least there was a pretense that the Fed can SHRINK the balance sheet by selling the Treasury bonds it holds......
No more. No more interest rates either I take it, because it's no longer debt that is created, it's actual currency without it being a liability on the balance sheet. No more can the Fed PRETEND that it can shrink the balance sheet (it can't do it now either, but at least now they can pretend like they can sell the bonds and get the dollars out of circulation, of-course it's all a pretense, they won't ever do it because that would annihilate the current fake economy that USA runs, would force gov't actually to stop spending too).
This is inflation in purest form, no more "full faith and credit of USA" that's because it's not credit and what faith can there be once the government itself drops the pretense and prints money?
Of-course the new new "economics" is all Keynesian, they don't want to admit that it's a sham, there is no such thing, Keynesian ideas to economics are what astrology is to astronomy.
The government lies about the CPI, the inflation, the GDP, it's all a huge scam. The bond bubble is being inflated, the crisis that will hit next is the currency and debt crisis and of-course minting a Trillion dollar coin (money out of thin air that has nothing to do with production, no different than paper by the way, just add zeros) is just debasing of currency.
USA will either stop government spending and allow the economy to restructure or it will destroy its currency and its credit worthiness with interest rates shooting up through the stratosphere. This will happen and a Trillion dollar coin may just trigger the bond bubble to burst.
signature [slashdot.org]
Re:The bill is redundant. (Score:4, Informative)
Congress has already authorized the Treasury to mint platinum coins in any denomination they see fit. Granted, it was intended for collectors, but that is what happens when you use vague, open-ended language.
Re:Can't America get its acts together ? (Score:5, Informative)
That's why it's not a national popular vote.
Re:Can't America get its acts together ? (Score:2, Informative)
The Fed has plenty of power, it can either buy bonds or not buy bonds. In fact the Fed shouldn't be monetising US debt, but it is. It should be cutting the government off free money, but it's not. That's because the fed chairmen are appointed by the POTUS and they all like their positions of power, so they do whatever the gov't wants not what is right.
The right thing is to stop monetising debt, slash gov't spending by minimum 50%, which is what the US gov't borrows every year to "pay" for its expenses ("pay" in quotes, because the gov't always borrows, it moves its debts from credit card to credit card, it can't pay, it won't pay, it's a deadbeat debtor who is not good for its debts).
Once the Trillion dollar coin is printed the bond bubble may just burst. US gov't is constantly promising the bond holders that it won't pay them (that's what this debt ceiling is about, 10% of gov't revenues go towards interest payments, so it should be possible to pay 300 billion in interest without any default, the message the gov't sends is: we will not raise taxes and we won't cut spending, we rather not pay the bond holders on our obligations if we can't get another credit card). Not only interest payments are in jeopardy with the gov't position on its expenses and revenues, but the actual principle of the debt is in jeopardy. What does "full faith and credit of USA" mean if the US gov't just prints the money? It means nothing at all.
By the way all Fed's liabilities are now liabilities of the Treasury, that's been the rule for almost 1.5 years now. Also the Fed holding bonds doesn't mean anything, the only creditors that actually mean something are real bond holders, not a quazi government structure that never fails to monetise debt (I mean to steal money through the tax of inflation).
sig [slashdot.org]
Re:Yes, End the Insane Spending (Score:4, Informative)
Because people will take out more than they put in with all of those systems. No, enough interest is not earned to make up the difference.
The systems are flawed by design and cannot continue indefinitely. They need to be addressed.
Re:What about this. (Score:5, Informative)
This might work in the short term, but infrastructue is a durable good; once built, it lasts a very long time. Look at the national highway system. Still there,
You may want to use a different example, since almost all the bridges of that highway system now need complete replacement [washingtonpost.com].
Re:Can't America get its acts together ? (Score:5, Informative)
Your logic is flawed. It is perfectly possible for more people to vote for Democrats and yet Republicans (or vice versa) to win the house by a landslide without any gerrymandering. You have to win more congressional districts, not more overall votes. Republicans traditionally have support in far more geographical areas (break it down by states, or counties or whatever) than Democrats: http://cdn.theatlanticcities.com/img/upload/2012/11/07/CountyMap2012.main.jpg [theatlanticcities.com] Democrats get their votes from a small number of densely populated areas.
Re:Can't America get its acts together ? (Score:5, Informative)
Balancing the checkbook is good, but there are times when it might be a good idea to grit your teeth and take out a loan. Imagine waking up one Monday morning in a muddy ditch with a missing front tooth and a vague recollection of your wife clearing out your joint accounts and running off with some musclebound thug, in your car. You painfully make your way home to realize that she's burned down the house. What are you going to do? Not balance the checkbook. Not get all high and mighty and track them down in South America either. (OT, ever read Dog of the South? Great book.) No, you're going to say good riddance and get on with your life. You're going to find a phone, call in sick, get your damn tooth fixed, buy a cheap suit, rent a car, get a hotel room, and get back to work as soon as possible. And you're going to do it all on credit. If you're not willing to go into debt here, you'll be severely impacting your future earning potential, ie, you'll be a filthy toothless bum forever.
This is a pretty good metaphor for the shape the country was in when Obama took over, btw. It's even got a car in it. I'm not about to go blaming it all on Bush, either; there's plenty of blame to go around. Anyway: We're in an emergency. Balancing the budget through spending cuts, as righteous as some of those cuts may sound, is likely to decrease economic activity and make things worse. It's important for us to realize that deficit spending should be a last resort, and the goal should be to stop it ASAP. But it's not time yet.
Re:Can't America get its acts together ? (Score:5, Informative)
Your logic is flawed. It is perfectly possible for more people to vote for Democrats and yet Republicans (or vice versa) to win the house by a landslide without any gerrymandering.
That may be so, but gerrymandering is what happened.
Re:Can't America get its acts together ? (Score:5, Informative)
Exactly. The reason the Senate isn't like that is because you can't gerrymander states's borders every 10 years.
Re:Specifically a one trillion coin? (Score:4, Informative)
The thing that this coin farce is supposed to prove is that the debt ceiling is a construct invented by the Carter Administration with no real regulatory or constitutional basis.
The debt ceiling dates from World War I, and it replaces Congress having to pass legislation granting specific borrowing authority on a per bond issue (or other instrument) basis.
Re:Can't America get its acts together ? (Score:5, Informative)
And how much of the income do they earn?
If you have one CEO making 200x what his workers make - say, $40,000, so $8 million - that CEO is paying 50% of all taxes. And yet that's hardly unfair.
Re:Can't America get its acts together ? (Score:5, Informative)
What was it that Mitt Romney said he paid? 15%? Their tax rate might be 35% but they're not paying 35%
It was 13.9% for the 2010 and 14.1% for 2011 (after not taking all of his deductions; don't worry he'll amend to get his proper lower rate).
Re: Can't America get its acts together ? (Score:5, Informative)
Most of the debt is owed to people in the US or between branches of the government. China, for example, owns only about 8% of the debt. The foreign part of the equation is nearly irrelevant and needs to stop being brought up.
Re:Also, the really big thing (Score:5, Informative)