The Trillion Dollar Coin and the Debt Ceiling

It appears we’re going to hit the debt ceiling sometime right before the election, according to Mark Zandi and Talking Points Memo:

“There is a risk that the treasury will hit its $16.4 trillion debt limit before the next presidential inauguration,” emails Moody’s chief economist Mark Zandi. “It will be close. I suspect the Treasury will have enough accounting wiggle room to get there, but much depends on whether the economy sticks close to script.”

One plausible scenario, then, is that Congress will have to address the debt ceiling issue in its November-December lame-duck session. But that’s exactly when it’s expected to address huge issues, like the expiring Bush tax cuts and the automatic spending cuts locked in by the last debt limit deal. The outcomes of all those debates will hang heavily on the results of the election — a clean win for Obama portends a much different resolution than an Obama victory in which the GOP takes the Senate, let alone a GOP sweep.”

Somebody pointed out we’re probably hit the debt ceiling right around election time in 2012 – and he did it immediately after the debate last year. This guy must have a crystal ball or something.

Well, last time, that guy waited too long to start talking about the debt ceiling. Not this time.

We need to do something about spending in the U.S….We need to pay off some of our debt by minting one or many trillion dollar coins. We can do it, and its prudent to have less debt in the United States, rather than more.

Fortunately for us at MMR, we happen to have the creator of the Trillion Dollar Coin idea very close by. beowulf is the person responsible for this idea which now has 340,000 entries in Google and it’s very own place in Wikipedia!

Don’t wait until the middle of a presidential election to bring up the idea of getting around the debt ceiling. August is too late. Now is the time to start talking about the Trillion Dollar Coin, reminding people we can do it, and remind important people it exists.

I’ll probably have more about the Trillion Dollar Coin in the next few weeks and months.

(P.S. Please note the Category this post uses. )

(Update: Dunce Cap Aficionado wins the comments thread so far with: “As if this was… all.. somehow…. planned….”)

 

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Admin
4 years 1 month ago

This is fun. It looks like we’re going to put the American economy on black/red and spin the wheel right before the election just so a bunch of lawyers can puff their chests out and look like they care about something. Fun times!!!!

Guest
Dunce Cap Aficionado
4 years 1 month ago

Don’t get me started on Lawyers…. (sorry Beo)

Admin
4 years 1 month ago

My whole family is lawyers so I’ve got no problem with lawyers. I just don’t think most lawyers should be guiding the economic policy of the USA. Carlos on the other hand, now, that’s a guy I’d give the keys to the castle.

Guest
wh10
4 years 1 month ago

Interesting thing is the National Economic Council is largely made of lawyers instead of economists, although I think the Council of Economic Advisers mostly consists of economist wonks.

Guest
beowulf
4 years 1 month ago

The best CEA chairman, Leon Keyserling, was a lawyer.
http://en.wikipedia.org/wiki/Leon_Keyserling

Guest
Obsvr-1
4 years 1 month ago

Even some poisonous species yield edible product 😉
e.g. Rhubarb, “fugu” the infamous Japanese for pufferfish …

Admin
4 years 1 month ago

And the CEA is all neoclassical guys. Pretty awesome, huh?

Guest
wh10
4 years 1 month ago

🙁

Guest
4 years 1 month ago

were doomed …. 😉

Admin
4 years 1 month ago

I think things will change in my lifetime. At least I am seeing a big change in the way people are thinking about things. I think if MMT and MMR can continue to push their message out there the thinking will continue to change.

Guest
Obsvr-1
4 years 1 month ago

spot on, and congrats on keeping this site and discussion alive and well.

If the OWS crowd could understand and rally around MMR then a catalyst for change could be very interesting.

Guest
wh10
4 years 1 month ago

is the Tsy permitted to buy back debt held by the Fed without such an action having been appropriated by Congress?

Guest
beowulf
4 years 1 month ago

Yes, the Secretary has the power to roll over and/or pay off our debts. Belatedly, I realized there’s another way around the debt ceiling… since the debt ceiling is measures by adding up the face amount of guaranteed principal.
Tsy could issue perpetual T-bonds that never mature, what the Brits call consols, which would have no amount of guaranteed principal.

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Dan Kervick
4 years 1 month ago

If the Treasury simply bought up all its own debt , maybe people would finally come to see that there is no fundamental purpose for government debt at all. The whole system is a throwback to an earlier time when most governments actually were mere users of primary forms of currency they didn’t fully control.

The Fed could probably manage the policy rate with interest on reserves, and get out of the business of open market operations altogether. The government could cease issuing debt and target an annual deficit in each fiscal cycle – the gap between its planned spending and estimated tax revenues – and then simply pass a bill issuing some kind of order to the fed to credit Treasury’s account by the targeted deficit amount.

There would still be room for all kinds of political debate, even with a constant annual deficit. Conservatives would want small government and low taxes; progressives would want larger government and higher taxes. And of course there would be ample room for debate on the size of the deficit, and whether the current deficit is too large and inflationary, too small and deflationary, or just right.

But at least we could take all the hysteria demagoguery about the debt burden on our grandchildren off the table.

Guest
wh10
4 years 1 month ago

Beo, I am not doubting you, but where does the law say that? Also, when Congress appropriates the budget, is pay down of Tsy debt included?

Admin
4 years 1 month ago
As to your point whether the Secretary needs an appropriation to buy back debt, the answer is no, If Tsy has the money in the general fund (and the Secretary can sweep Mint proceeds into the general fund at his discretion), it can be used to buy back its debt. 31 USC 3111 says (bolding the important part): An obligation may be issued under this chapter to buy, redeem, or refund, at or before maturity, outstanding bonds, notes, [etc]… money received from the sale of an obligation and other money in the general fund of the Treasury may be used in making the purchases, redemptions, or refunds. Consols could be issued under Tsy’s existing bond authority (“The Secretary may issue bonds authorized by this section to the public and to Government accounts at any annual interest rate” 31 USC 3102) since unlike bills and notes, bonds have no time restrictions on maturity. In 3121, “the Secretary of the Treasury may prescribe… (5) the dates for paying principal and interest”. The permissive “may” instead of the mandatory “shall” means that the Secretary doesn’t actually have to ever set a date for paying principal. Now here’s where the magic happens, as the TreasuryDirect website says, “When a Treasury bond matures, you are paid its face value”. A bond’s face value (synonymous with “par value” or “face amount”) is the principal Tsy promises to repay. When a bond is stripped, the face value is what the zero coupon is entitled to while the bond coupons go to the interest-only strip. Now look at the debt ceiling statute, “The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury)… Read more »
Guest
4 years 1 month ago

I am slightly unsure of the consol thing because 31-USC-3101 says:

” For purposes of this section, the face amount, for any month, of any obligation issued on a discount basis that is not redeemable before maturity at the option of the holder of the obligation is an amount equal to the sum of—
(1) the original issue price of the obligation, plus … “

Admin
4 years 1 month ago

Treasuries can be issued as interest-bearing (as T-bonds are) or on a discount basis (T-bills), the discount is sort of like the interest paid up front. The only payout is the guaranteed principal on the back end. A consol is a perpetual annuity, its interest-bearing but there is no back end.

Think of a consol as a constructively stripped bond with :
(a) the Secretary keeping the face amount of the zero coupon principal, 3101 says Tsy-held “guaranteed obligations” don’t count against debt limit; and
(b) a separate interest-only annuity that can be (per bond statute, 3102), “sold to the public and to Government accounts at any annual interest rate”. Since there’s no maturity date at which time principal is guaranteed to be repaid, it doesn’t count against the debt limit either.

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Matt Franko
4 years 1 month ago

“sold to the public and to Government accounts at any annual interest rate”

Since Treasury can sell these things to the public AND GOVERNMENT ACCOUNTS, that means THE FED CAN BUY THEM from Treasury with RBs…. Checkmate! (except for morons).
Resp

Guest
Госбанк
4 years 1 month ago

Some postings here reflect I dare say deep misunderstanding on how perpetual bonds(“consols”) are arramged for sale,. as well as show unfamiliarity with the history of consols.

1. Despite claims that they do not have face value, in fact, they do, such that when they are sold, their face value reflects the hoped for net present value assuming some hypothetical discount factor in perpetuity, say, 3%. Thus, at the moment the consol is sold, the debt position is incremented by the consol face value exactly in the same way as it would be with any other government bond.

2. Despite the claim that the consol is never “redeemed”, the reality is that consols are issued with an embedded call option which the British Government, for example, exercised on occasion.

3. On the two occasions the US government issued consols(the 1930 consols and the Panama Canal Loan), they were both redeemable and counted, naturally, as part of the government debt (See http://fraser.stlouisfed.org/docs/historical/ny%20circulars/1935_01514.pdf and http://www.treasurydirect.gov/govt/reports/pd/mspd/1935/opdm011935.pdf).

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Госбанк
4 years 1 month ago

Perpetuity does have a principal. The principal is simply equal to zero due to infinite time discounting, just as a special case of the vanilla bond. That is bond valuation 101. There is nothing special about perpetuity and it is fully within the regulatory framework that adds the face value of the security to the debt position.

Besides, you keep ignoring the 1935 document I referred to earlier in which perpetuities are explicitly counted as debt.

Guest
4 years 1 month ago

It is usually the case that for non-consols, the bond is priced near the principal and one doesn’t need to distinguish the two.

The looseness of the Treasury FAQ cannot be taken as a proof that the face amount is equal to the principal for all bonds.

The old law is gone and for someone in 2012, only what’s written in 2012 matters.

Admin
4 years 1 month ago

I’ve pointed out a few times where the usc distinguishes between discount basis, interest-bearing basis as well as discount and interest-bearing basis. 3103(c), added in 1989, only applies to the first.

I just don’t know why I suffer this delusion that face amount is equivalent to principal for purposes of the public debt— it might have something to with that’s how the US Department of Treasury describes it.
The Public Debt Outstanding represents the face amount or principal amount of marketable and non-marketable securities currently outstanding.

http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm

Guest
4 years 1 month ago

Beo,

Usually the phrase discounted is used for a zero-coupon bond but nonetheless a security which clears auction below par is called discounted and the USC makes no qualification and hence the law is to be taken to be applying for coupon bonds as well.

Plus nowhere in the USC does it say that the principal amount is the face amount. Given many scenarios where the face amount is different from the principal and the funds raised at the auction will indeed be used to calculate debt subject to limit, it is clear that in other situations also principal won’t be used.

Admin
4 years 1 month ago

Ramanan,
In either case its interest-bearing (doesn’t matter if its discounted or not), so not subject to debt limit. By way of comparison, T-bills, sold on a discount basis and not interest-bearing, would be included in the debt limit.

I agree, strange indeed, blame Congress. :o)

Guest
4 years 1 month ago

Let’s say consols are auctioned and the stop (highest accepted bid) is 4.99% and the coupons are set at 5%.

Consider another auction in which the stop is 5.01% and the coupons are set at 5%.

The second case is a discounted bond because the price is below $100. So the second bond gets counted in the debt subject to limit and the first one is not a discounted bond and is not counted. Strange isn’t it.

Admin
4 years 1 month ago

Perpetuity does have a principal. The principal is simply equal to zero due to infinite time discounting, just as a special case of the vanilla bond.
I rest my case :o)

The 1935 balance sheet lists total public debt, NOT public debt subject to limit. We knows this because it lists the very Panama Canal consols you mention. The debt limit excludes debt issued prior to 1917, Panama Canal consols were issued from 1900 to 1902.

Maybe Tsy counted the 1930 consols within the debt limit or maybe it didn’t, no way of telling since it treats them identically here to the Panama Canal consols. Doesn’t matter really, the laws have changed so much no court would hold Tsy to its procedures of 77 years ago. For one thing, these consols were only redeemed in 1935 because Congress had just prohibited bonds and notes from bearing the circulation privilege, so on that alone 2012 series consols would be legally distinguishable from the 1930 series.

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beowulf
4 years 1 month ago

I’m not talking about the financial definition of consols (after all they’re not technically bonds but they could be issued under the T-bond statute), but rather about how Congress defines the public debt (which it does actually in two different ways).

There’s no question that consols would add to to Public Debt Outstanding. If that’s your argument, you win, consols would certainly add to the total. However, my argument isn’t about that, I’m talking about the subcategory of the above called Public Debt Subject to Limit. That’s why I quoted so much from Title 31 of the US Code to show that Congress sets the debt limit based on the aggregate of guaranteed principal of outstanding Treasury securities. If there’s no guaranteed principal, there’s no debt limit consequences.

Admin
4 years 1 month ago

No, (c) only refers to one of three kinds of obligations (on a discount basis), it does not include the other two. The debt limit was enacted in 1917, this version of (c) was tacked on in 1989. Prior to that (c) read as follows:
“The face amount of beneficial interests and participations (except those held by their issuer) issued under section 302(c) of the National Housing Act (12 U.S.C. 1717(c)) from July 1, 1967, through June 30, 1968, and outstanding at any time shall be included in the amount taken into account in deciding whether the face amount requirement of subsection (b) of this section has been exceeded. This subsection does not require a change in the budgetary accounting for beneficial interests and participations.”

I’m guessing it was as something else prior to 1968.

Guest
4 years 1 month ago

3101-b talks of the face amount and c defines the face amount.

Using c, if the Treasury raises $2b in an auction with consols, the debt increases by $2b.

Admin
4 years 1 month ago

You’re describing a bond issued on an “interest-bearing and discount basis”, which is irrelevant to this because 3101(c) , speaks only to including “discount basis” obligations in the debt limit and says nothing about the other two kinds of obligations described in 3121.
“the Secretary of the Treasury may prescribe –
(1) whether an obligation is to be issued on an interest-
bearing basis, a discount basis, or an interest-bearing and
discount basis.”
Nowhere in the code does it say that the principal repayment is a condition for the security to be counted towards the debt ceiling.
Nowhere in the code except for the part where it says “guaranteed principal and interest” you mean.

Guest
Госбанк
4 years 1 month ago

That’s why I quoted so much from Title 31 of the US Code to show that Congress sets the debt limit based on the aggregate of guaranteed principal of outstanding Treasury securities.

That is not what the code says. It uses the face value of the security as the debt increment(“The face amount of obligations issued under this chapter”). Nowhere in the code does it say that the principal repayment is a condition for the security to be counted towards the debt ceiling.

As I wrote earlier, the perpetual bond has a face value which is added to the total debt, upon sale, in the same manner as that of the vanilla bond. One of the documents I referenced clearly states that the 30’s US consols are debt.

Consider a vanilla 30 year bond discounted at %5 with a %5 coupon. Upon maturity, the principal value in today’s money is only about $250 rather than the face value of $1,000. As someone already wrote, $1,000 in *today’s* money includes all the future discounted cash flows. Therefore, a $1,000 perpetuity with a coupon rate of %5 and discounted at %5 will be equivalent to a vanilla bond, ceteris paribus, hence, will be counted identically against the debt position.

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beowulf
4 years 1 month ago

Also, there’s no question that Tsy would have the option to buy back consols, jus as the UK has the right to buy back its extant consols. Remember the test is is whether the principal is guaranteed by Tsy. If Tsy has a call option, that means it has the discretion but not the obligation to buy back its debt. Doesn’t sound like a guarantee to me, but then what do I know, I’m full of deep misunderstandings.

Guest
4 years 1 month ago

Matt,

There is a misinterpretation of “any” here.

It’s like saying a bank can fix its term deposits to any rate. Of course it can but it won’t get depositors and other sources of funding need to be used.

The “any” just means the Treasury secretary can reject bids.

However, without having a facility to make an overdraft (without changing the law), and faced with the debt ceiling, the Treasury Secretary is forced to issue at the long term yields. (“any” is misleading, at least taken in the wrong sense here).

Whatever acrobat the Treasury does about selling it to own accounts, finally the debt of the combined entity will be higher than the ceiling in the hypothesised circumstances and hence not possible.

Guest
Matt Franko
4 years 1 month ago

Ramanan,

I think Beo perhaps is making a larger point that ‘consuls’ are not bonds, they are a separate entity, so different standard terms apply, we know how important it is to stick with the standard terms 😉 . And they are not forbidden by the current law.

The ‘debt ceiling’ could be looked at as though the govt is just trying to keep track of how much securities they have issued that are redeemable, this in fact would make some sense. With this ‘debt ceiling’ law, the govt rightly reserves the authority to approve the gross amount of ‘redeemable obligations’ if you will, that they issue. This would help them manage these accounts and balances, plan for upcoming redemptions, etc… track the status of gross appropriations, etc.. They do not want to be “blindsided” so they have to keep track of what they are doing so they do a “debt ceiling”.

Consuls are NEVER REDEEMABLE so there is no concern about having balances in the correct account at redemption time… just need to plan for the payments. Perhaps they would want to start a new “Consul Ceiling” law 😉

Not that our morons planned it this way though, but a broken clock can be correct 2 times a day…. Resp,

Guest
4 years 1 month ago

Beo,

31-USC-3101 clearly defines face amount.

The reason interest payment don’t make an appearance for usual bonds with maturity is that the bond is usually priced to par.

Interest payments are as much an obligation of the U.S. Treasury as are principal payments.

The Treasury may define the principal to be zero, but USC doesn’t really use principal as the definition of the face amount.

Guest
beowulf
4 years 1 month ago

Obligations are defined as the total of guaranteed principal only. If guaranteed interest was included in debt ceiling, you’d have to include all future interest payments.
The would make the public debt clock look like a random number generator as interest rate changes move the total up and down every day. I don’t think recall that ever happening.

Guest
4 years 1 month ago

Matt,

Consols are obligations and the debt ceiling is defined so that it includes this.

If the Treasury raises funds worth $20 via consols, the debt increases by $20.

Guest
4 years 1 month ago

The reason coupon payments disappear when the Treasury is issuing debt is because the bond is usually priced so as to have a value of 100 or 1000 (or whichever). That is to say that the coupons are adjusted based on the auction result.

Hence the initial amount raised is automatically the face value and one usually doesn’t need to make a distinction. (The price may not exactly be $100 due to roundoffs etc).

For non coupon bonds (different from STRIPS which anyway is not issued by the Treasury but allowed by the latter to be STRIPPed by Wall Street) the initial amount raised is not the par value because of discount. Hence the need for definition of face value.

However (c) of 31-USC-3101 explicitly defines the face value of the “obligation” as the original issue price plus/minus.

So investors may bid a consol at say 4% yield which means the Treasury pays $4 annually on every bond. The “original issue price” of this bond is roughly $100 and hence the face value is also roughly $100.

So even though there is no principal and according to the Treasury may have zero face value, according to the USC it doesn’t seem to because it doesn’t refer to the principal but the issue price.

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beowulf
4 years 1 month ago

“(c) For purposes of this section, the face amount, for any month, of any obligation issued on a discount basis…”

“Discount basis” is also mentioned in the section 3121
“(a) In issuing obligations under sections 3102-3104 of this
title, the Secretary of the Treasury may prescribe –
(1) whether an obligation is to be issued on an interest-
bearing basis, a discount basis, or an interest-bearing and
discount basis.”

Since 3121 makes the distinction between interest-bearing basis and discount basis, then the 3101 (c) mention of “discount basis” and not “interest-bearing basis” is an example of the legal principle, the inclusion of one excludes the other.

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Tom Hickey
4 years 1 month ago

Thanks for the elucidation. I put up the section on consols at MNE.

Guest
beowulf
4 years 1 month ago

Title 31 sects 3101 to 3121, in court now so that just from memory. I could Google it but that will cost you. :o)

Guest
wh10
4 years 1 month ago

Lol thanks

Guest
Tom Hickey
4 years 1 month ago

IIRC, Chris Cook recommends this. Most Americans are not familiar with consoles. Could you explain how this would work, maybe in a post.

Guest
Dunce Cap Aficionado
4 years 1 month ago

Don’t know if there’s enough meant on that bone to justify it, but the lay people such as myself could use a post on consols and how a US version would work, not necessarily just in regards to the debt ceiling.

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beowulf
4 years 1 month ago

Agreed, I think consols would be preferred by economists and platinum coins
by everyone else.

Guest
Greg
4 years 1 month ago

I used to think it would be best to make a real small coin and have some astro physicist (Neil deGrasse Tyson maybe) describe that the coin is made of the rarest metal in the universe, obtained in small quantities from asteroids.

Now, I like the idea or it being a HUUUUUGE coin that takes twelve military personnel to carry. Or that is transported by helicopter and dropped through the roof of some building in Fort Knox.

Either could be great theater.

Bread and circuses

Guest
Tom Hickey
4 years 1 month ago

Seems to me that consoles might be more feasible tactically though. I can the platinum coin gambit being using in extremity like preventing a voluntary default by a Congress that has lost its mind, but I doubt that an administration would use it otherwise, since it is an endrun around Congress and would create a political firestorm. Consoles might be better strategically as a permanent feature. That is what Cook suggested as I remember.

Admin
4 years 1 month ago

I made two suggestions to Brad DeLong last year.
1. Rename Twitterstream Delong to Twitterstorm Delong
2. Run with the consols idea and call them DeLong Bonds.
One down, one to go :o)
http://delong.typepad.com/sdj/twitterstorm-delong/

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Dunce Cap Aficionado
4 years 1 month ago

Hmm, why? Because the TDC is ‘sexier’ (more marketable)? or because the far right would cry havoc at the idea of ‘un-repayable’ debt? Or something else entirely?

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Dunce Cap Aficionado
4 years 1 month ago

I’ve told you before you have a great mindset for selling an idea. The TDC still has a major hurdle though, convincing the Austrians (the political supporters, not the actual economists) and the general Ron Paulers that coin seignorage is not inherently inflationary is going to be difficult even in normal to good economic conditions.

Guest
4 years 1 month ago

Isn’t debt held by the FED illusory ?

The UST buys back the debt from the FED and the FED remits the money back to the UST, so effectively the debt does not exist and the UST didn’t spend any money to remove the debt, therefore no need to have anything appropriated by congress.

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wh10
4 years 1 month ago

Does the principle get remitted? I thought it was just profit and the bond is retired. In any case, it still seems to require use of the federal purse to execute, and I thought that needed Congressional approval. I am sure beowulf has this sorted out.

Guest
wh10
4 years 1 month ago

(meant retired when purchased by Tsy)

Guest
beowulf
4 years 1 month ago

Why have the Fed do something irregular (which could be construed as a Greek-style partial default), when Tsy can simply buy it back fair and square with legal tender?
I believe redeemed debt is extinguinshed (since the same party is on both sides of the contract).

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Obsvr-1
4 years 1 month ago

These discussions re: Operation of the FED/UST (call it QE or call it OP Twist, or call it “magic keyboard fingers”) validates the need for MMR and other monetary blogs to educate more and more people.

If the masses really understood the foundation of our Fiat Federal Reserve System (MMT Operations) and would engage in MMR discussions and education then the scary “Headlines” from the MSM and political theater from the politicians can be understood in context and more importantly addressed with thoughtful, objective counter points. Oh this nation is in dire need to become educated on the most important concepts of the monetary (and other side of the same coin, fiscal) foundation.

Guest
Robert Rice
4 years 1 month ago

The Fed canceling the Treasury’s debt might be spun as partial default (although this would be inaccurate since the obligee is canceling the debt not the obligor failing to pay it), but printing/coining is going to be construed as inflationary, especially at a quantity needed to pay off a substantial portion of public debt.

There seems to be two paths:

1. Coin/print and pay down debt.
2. The Fed buys up Treasury liabilities on the open market and cancels the debt, either by simply canceling the IOU contract (which they ought to be able to do since they are the entity to whom the money is owed) or by returning interest and principal to the Treasury following receipt.

Both paths have their advantages and disadvantages.

I’d like it if we could just coin/print and pay. I appreciate your guys’ sentiment. It is the most efficient and direct path. There however is real risk of a headline disaster given our current political environment. Isn’t it realistic to believe a headline like “The Treasury Begins Printing, Incites Inflation Fears” could compel a Tea party mob with the help of well meaning independents to institute a foolish, destructive austerity policy? As you know, the Ryan budget already passed the House. Don’t get me wrong, the flipside with the Fed canceling the Treasury’s debt is also politically problematic, if spun. Either path has a political hurdle to overcome. Which is more problematic seems an open question.

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Robert Rice
4 years 1 month ago

I will say I just read an article which addresses in part the concerns independents have on deficit spending (scroll to subheading “The Independent Equation”):

http://www.npr.org/2012/04/11/150437103/romney-and-ryan-a-budding-political-bromance

Since independents are concerned about this, it is a perfect set up for the GOP to rail against the Obama administration and Geithner specifically if the Treasury coins to pay down debt. “The inflation is coming! The inflation is coming!” They’ll propose cutting spending as an alternative. Given current economic understanding, what do you think the independents are going to do, side with coining or side with cutting? I’d bet a day in a Chinese prison they’d favor cutting and hand the GOP the election with a mandate. Not good.

What really needs to happen is a concerted re-education effort to the electorate, more specifically to openminded independents, which dispels the myths we all agree on, and which if dispelled, will save this country’s economy. We could start a website focused to independents, spend six months trying to get infront of enough of them before the election, and try to persuade enough of them of basic monetary operations and the quite sensible policy prescriptions which flow from this understanding. A thought. Our government isn’t going to do it. Maybe we could kill two birds with one stone, and dispel the inflationary concerns over coining as well as the concerns over too much Treasury debt if it’s owed to the Fed who purchased it via an LSAP on the open market. Could be time for the citizenry to lead instead of always looking to the government for leadership. We the people can captain the ship through these rough waters. Funding might even be available for this if MMTers, MMRers, can come together and support a cause they all agree on. I’d help with what I could.

Guest
Dunce Cap Aficionado
4 years 1 month ago

It appears we’re going to hit the debt ceiling sometime right before the election

As if this was… all.. somehow…. planned….

Guest
Dan M.
4 years 1 month ago

Who will this hurt/help?

I have to think it will hurt Obama, won’t it? In spite of repubs looking like fiscal terrorists?

Guest
Dunce Cap Aficionado
4 years 1 month ago

Agree- mostly helps GOP as it happens ‘on obama’s watch, again’

It’s also a controlled distraction- something to argue over- something to barter over.

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