Patterico's Pontifications

1/9/2013

Carney: I Won’t Rule Out the Trillion Dollar Coin

Filed under: General — Patterico @ 6:52 pm

Awesome.

A rare but minor note of disagreement with my favorite blogger, Allahpundit:

[I]t’s already reasonably clear what Obama’s presidential legacy will be. There may be big things still to come — a confrontation with Iran looms largest — but barring something truly momentous and unexpected happening before 2016, in 20 years’ time historians will remember The One for his total, almost cavalier refusal to deal seriously with the country’s approaching fiscal crisis.

“Almost” cavalier?

Otherwise, spot on.

33 Comments

  1. I may blog about other topics in the future, but I am considering opening every post that doesn’t concern the financial bubble with a sentence like:

    In other news that has nothing to do with our mounting government debt bubble . . .

    I mean like EVERY post.

    Overkill?

    Comment by Patterico (8b3905) — 1/9/2013 @ 6:54 pm

  2. I mean, it’s not like you can overstate the significance of the problem . . .

    Comment by Patterico (8b3905) — 1/9/2013 @ 6:54 pm

  3. Recipe for nuclear war:

    1. Keep doing what we’re doing.

    2. World economy collapses.

    . . . .

    3. NUCLEAR WAR!!!!

    Comment by Patterico (8b3905) — 1/9/2013 @ 6:55 pm

  4. Why stop at one or two coins? Mint a whole pallet full.

    Universe. In. The. Bank.

    Comment by EC (47fe36) — 1/9/2013 @ 6:55 pm

  5. Obama and Carney, two clowns for the price of about $16 trillion.

    Comment by SPQR (768505) — 1/9/2013 @ 6:58 pm

  6. Dammit! Someone in Hollywood needs to very quickly develop a script where the Government mints the $1 trillion coin, but in the process of being taken by armed escort from the mint to Ft. Knox some secret cell of terrorists or Tea Party members (but I repeat myself, as far as Hollywood is concerned) attacks the escort and steals the coin. The hero of the story can be a progressive blogger who follows the clues and saves the coin just as it was about to be melted in the volcano at Mount Doom. Sort of a reverse Lord of the Rings thing going on there.

    Comment by JVW (4826a9) — 1/9/2013 @ 7:01 pm

  7. Oh, and if you are scoring at home:

    Minting a $1 trillion coin despite our $16 trillion debt for the sole purpose of being used to gain leverage in the fiscal debate is responsible governance.

    Threatening to stop funding operations of our terminally broke government unless there is a measure of budgetary sanity brought to bear is reckless endangerment of the economy.

    Comment by JVW (4826a9) — 1/9/2013 @ 7:05 pm

  8. JVW–why, to me it’s absolutely James Bondian!!! It would be an armed and beautiful female escort, right?

    Comment by elissa (21eae2) — 1/9/2013 @ 7:08 pm

  9. I have seen the country piss away it’s sanity.
    Game on.

    Comment by mg (31009b) — 1/9/2013 @ 7:18 pm

  10. nuclear war is really bad for the environment it’s like fracking

    Comment by happyfeet (ce327d) — 1/9/2013 @ 7:29 pm

  11. When I was a little girl, I was at the store with my mom and I was begging for her to get me something (can’t remember what it was) and she said, no, we don’t have money for that. I was insistent and told her she could just write a check. I had seen her pay bills with checks and pay for groceries and clothing with checks and simply assumed grown ups just wrote a few things on this small piece of paper and voila!, whatever they wanted they got. Imagine my shock when she carefully explained that there was a thing called a checking account that required deposits of money, balances to maintain to back up that check, etc.

    I have been continually reminded of my childish understanding of money and my mom’s patient explanation of fiscal reality these past few weeks. And it’s not the actual imminent collapse that has taken me back to that memory, it’s mostly been because of this president’s nonchalant and completely cavalier attitude toward other people’s money.

    Comment by Dana (292dcf) — 1/9/2013 @ 7:40 pm

  12. Jay Carney – This is not about future spending(LOL), this is about Congress paying the bills of the United States. Congress just needs to do its job, particularly one House of Congress, and pay the bills of the United States.

    Hypothetical Reporter – Mr. Carney, the government is operating under a continuing resolution because one House of Congress has not done its job for more than 1,350 days. What bills are not being paid?

    Jay Carney – I don’t follow your question and we do not comment on rumors.

    Hypothetical Reporter – If one House of Congress refuses to participate in the legal budget process are they not the one at fault for gumming up the works on government borrowing limits?

    Jay Carney – David Gregory, I saw that you had your hand up.

    Comment by daleyrocks (bf33e9) — 1/9/2013 @ 8:09 pm

  13. Dana, so your story means that you learned something as a little girl that Democrats still don’t know?

    Comment by SPQR (768505) — 1/10/2013 @ 8:00 am

  14. SPQR,

    Yes, you’ve got it. Last night my mom estimated I was probably about 8 or 9 years old when we had the discussion. So ironic.

    Comment by Dana (292dcf) — 1/10/2013 @ 8:07 am

  15. I have a coin from the Olumpics. I hereby declare it to be worth a BILLION dollars!

    Who wants to buy?

    Comment by mojo (8096f2) — 1/10/2013 @ 8:13 am

  16. mojo, the new Treasury secretary Lew does…

    Comment by SPQR (768505) — 1/10/2013 @ 8:17 am

  17. The GOP should insist that if the $1 trillion coin is minted that it have Obama’s profile on the obverse and the DNC headquarters on the reverse. If possible, it should be minted at the San Francisco mint.

    And Dana, if you want to raise money to send your mom to Washington to explain economics to Democrats, put me down for $50.

    Comment by JVW (4826a9) — 1/10/2013 @ 8:25 am

  18. PlumLine Sargent claims that by not ruling it out, it is ruled out. Kind of like how kmart claimed giving a speech against and voting against something shows your support for that.

    Comment by JD (b63a52) — 1/10/2013 @ 8:34 am

  19. Jay Carney thinks a $100 gallon of milk or a twelve pack of Bud Light costing $750 are both great ideas. These supposed geniuses in the White House have never heard of Weimar nor Galtieri. We have been told over and over how smart Obama is. Guess again.

    Comment by Bugg (ba4ca9) — 1/10/2013 @ 8:36 am

  20. My sense after having been out and about in the real world for the last couple of days is that the average American thinks the “1 trillion dollar coin” is about the silliest and stupidist and most insulting to their intelligence ploy they’ve ever heard from politicians. I would say this general feeling transcends the right-left political divide. I hope the dems keep talking about it and trying to sell it and that bloggers and op ed writers and average Joes and Janes keep on mocking it without mercy.

    Comment by elissa (b86770) — 1/10/2013 @ 8:50 am

  21. The trillion dollar coin scheme shows the true economic brilliance of our Democrat overlords.

    Deposit something designated a trillion dollar coin/baggie of Bo’s dog poop with Ben Bernanke and ask that Treasury’s account be credited with available funds so that the government can pay its bills.

    If I’m Bernanke, I say NFW, because its like ripping a $1 trillion hole in the Fed’s balance sheet. Giving Treasury access to funds against an unmarketable, unexchangeable asset is pretty much like they deposited an NSF check at the Fed and the Fed honored it.

    Comment by daleyrocks (bf33e9) — 1/10/2013 @ 8:58 am

  22. elissa,

    I don’t think the “low-information” voter can be ignored. I’m not a fan of labeling voters this, however, it seems to fit.

    There is a big segment of the population that is less informed, believes the bumper-sticker bytes of pro-Obama information, and thus would think this was a brilliant idea. They have no clue or understanding about the long term impact, inflation, financial bubble, etc.- nor do they want to. Keep it simple, don’t require a lot of thought, mint a new coin, pay the debt, everyone wins.

    I don’t think that is cynicism but rather reality.

    Comment by Dana (292dcf) — 1/10/2013 @ 8:59 am

  23. “Keep it simple, don’t require a lot of thought, mint a new coin, pay the debt, everyone wins.”

    Dana – Plus that platinum stuff shore is expensive and valuable. Shiny too.

    Comment by daleyrocks (bf33e9) — 1/10/2013 @ 9:08 am

  24. So, when I take my billion dollar platinum coin into the grocery store, what happens if they can’t make change?

    Comment by The confused Dana (3e4784) — 1/10/2013 @ 10:25 am

  25. It kind of tells you something about their history. In the old Dungeons and Dragons role playing games, platinum pieces were the most valuable, better than silver or gold pieces. So, now they want to mint a really, really cool platinum piece; think of all the experience points they’ll get for that one!

    I always knew Barack Hussein Obama was a half-orc!

    Comment by The Dana who outgrew D&D (3e4784) — 1/10/2013 @ 10:28 am

  26. So, when I take my billion dollar platinum coin into the grocery store, what happens if they can’t make change?

    They just give you an IOU for 999 billion dollars, silly. That way you both are a trillion dollars richer!

    Has anyone seen the Beavis and Butthead episode called ‘Candy Sale’? They keep buying eachother’s school sale candy bars by lending eachother the same two dollars. It seemingly works just fine as they deplete their candy. I think that’s what America is doing lately.

    Comment by Dustin (73fead) — 1/10/2013 @ 10:30 am

  27. The whole absurdity reminds of a riff from the Hitchiker’s Guide, where they describe one triangular coin, some thousands of miles on each side, that was never in use, because they couldn’t make change,

    Comment by narciso (3fec35) — 1/10/2013 @ 10:31 am

  28. Don’t take any wooden nickels, Carney.

    Comment by mojo (8096f2) — 1/10/2013 @ 11:22 am

  29. The New York Times had two articles (at least) dealing with this on January 9, 2013.

    One was kind of like a whimsical survey:

    http://www.nytimes.com/2013/01/10/business/a-trillion-dollar-coin-brings-a-jackpot-of-jests.html

    It mentions Carney:

    There is no Plan B, there is no backup plan. There is Congress’s responsibility to pay the bills of the United States,” said Jay Carney, the White House press secretary, who responded to a dozen questions about the trillion-dollar coin at a news conference. “I have no coins in my pocket,” he later added.

    But Mr. Carney did not rule the idea out explicitly, deferring later questions to the Treasury Department.

    That has left a few supporters hoping that in one of his last acts in office, Treasury Secretary Timothy F. Geithner might trot out a shiny platinum coin emblazoned with “In God We Trust” and a 1 with 12 zeros behind it.

    I think such coins would obviously have to be numbered, and have a QR code and a website on it which somebody could look up to see whether or not the coin had been made into money. Coins don’t become money when they are stuck. Something else has to happen.

    And if it was stolen, the Secretary of the Treasury would just demonitize it and replace it with another one. I think maybe you could do that. I don’t think any bank would just ignore that and take the coin.

    Anyway, it would probably stay in the vault of the Federal Reserve Bank of New York, 80 feet below 33 Liberty Street.

    http://abcnews.go.com/Business/story?id=5835433&page=1

    There’s more gold there than at Fort Knox. Almost all of it belongs to other countries. When one country transfers gold to another they move it from one place to another for a fee of $1.75 for each 28 pound gold bar (28 pounds = 448 ounces = about half a millon Dollars or so. There’s around $200 billion there)

    Comment by Sammy Finkelman (a69e24) — 1/10/2013 @ 11:15 pm

  30. Donald Marron, the Director of the Urban-Brookings Tax Policy Center and former acting director of the Congressional Budget Office said they should be no more than $25 billion and even better is $1 billion or $1 million coins.\

    http://taxvox.taxpolicycenter.org/2013/01/08/is-the-trillion-dollar-platinum-coin-clever-or-insane/

    http://www.interfluidity.com/v2/3630.html

    http://money.cnn.com/2013/01/09/news/economy/platinum-coin-debt-ceiling/

    Comment by Sammy Finkelman (a69e24) — 1/10/2013 @ 11:23 pm

  31. Locus Classicus of the Trillion Dollar coin concept:

    http://moslereconomics.com/2010/05/14/marshalls-latest/#comment-20736

    Thread 45.

    beowulf Reply:
    May 23rd, 2010 at 5:03 pm

    Option 5.

    …Congress could…
    5. Authorize the US Mint to stamp $1 billion or even $1 trillion coins. Geithner could hand-deliver them to the Federal Reserve Building as needed. :o )

    At May 24th, 2010 at 8:29 pm, beowulf adds in a Reply that this is already legal.

    …Curiously enough Congress has already delegated to Tsy all the seignorage power authority it needs to mint a $1 trillion coin (even numismatic coins are legal tender at their face value and must be accepted by the Federal Reserve)– the catch is, its gotta be made of platinum…

    Comment by Sammy Finkelman (a69e24) — 1/10/2013 @ 11:45 pm

  32. Another article in the New York Times yesterday (January 10) an Op0-ed piece – says the whole Trillon dollar coin idea is unnecessary:

    http://www.nytimes.com/2013/01/10/opinion/an-escape-hatch-for-the-debt-ceiling.html

    The Secretary of the Treasury could issue “registered warrants” – scrip – like California did. (or maybe notices instead of direct deposits could be issued and banks could be encouraged to credit them – if banks loaned money to customers at 0% and ntot the government, it wouldn’t add to the debt.

    Another idea I’ve seen mentioned is consuls – perpetual bonds, paying only interest. Since they have no face value, they don’t add to the debt. Only the interest, when due, adds to the debt.

    Correction: The other article I mentioned in comment number 29 was also on January 10 – I said Jan 9 by mistake)

    Comment by Sammy Finkelman (a69e24) — 1/11/2013 @ 12:07 am

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    Comment by pong table (dd0809) — 1/14/2013 @ 10:41 am

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