Hacker News new | past | comments | ask | show | jobs | submit login

ummm no

if that were the case why not just make a 1000 Trillion Coin, and pay off all the debt for all of time

Because we both know that yes that money will enter the money supply, just not directly.




The subtle detail is that making the 1000 Trillion Coin itself has no effect on inflation. However if it's used to pay off the debt, then that is what produces inflation.

The reason this distinction matters is that the President has the authority to create the trillion dollar coin, but does not have the authority to spend it. All he can do is grant permission to another authority to borrow against that coin, it's that other authority (the Federal Reserve) that would in turn affect inflation.

The argument is that since the Federal Reserve is going to end up doing that anyways, one way or another, that this trillion dollar coin itself really isn't the cause of any inflation to begin with; it's basically nothing more than a formality.


It isn't being used to pay off the debt. That would be inflationary. It's being used to back the issuance of further debt, and in that sense it's a complete accounting trick. If we minted a quadrillion dollar coin for this purpose it would be equivalent to abolishing the debt limit.


> Because we both know that yes that money will enter the money supply, just not directly.

Sure, but it's going to do it through the borrowing/lending we presume will be allowed by congress (raising the debt ceiling) eventually anyways.

This just allows that to happen regardless.

This (to me) is not so much a financial tool as a political bludgeon to work around that fact that the US congress is essentially useless at the moment.

I still don't think it's a good idea, but bad ideas start seeming like good ideas if the people making the rules are utterly useless (see: congress).




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: