Re:Trillion-dollar platinum coin could be minted at the last...
by wcoenen on Tuesday October 05, 2021 @02:22PM
(#28763434)
The goal here is to circumvent the debt ceiling. Writing a $1T IOU would add $1 trillion to the liability side (i.e. debt) of the bookkeeping (and presumably also to the asset side in the form of an addition to a federal reserve account), while minting a $1T coin only adds it to the asset side.
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Re:Trillion-dollar platinum coin could be minted at the last...
by Uehreka on Tuesday October 05, 2021 @02:23PM
(#28763466)
So then why not a note? And is there a rule somewhere that a physical thing needs to be minted at all?
Re:Trillion-dollar platinum coin could be minted at the last...
by wcoenen on Tuesday October 05, 2021 @02:36PM
(#28763646)
It has to be a platinum coin because subsection (k) of https://www.law.cornell.edu/uscode/text/31/5112 is the special case that allows for issuing any denomination.
Notes are a liability of the Federal Reserve. Meaning they can be traded for balance on a Federal Reserve account. The treasury can't just create liabilities for the Fed out of thin air, I mean that would be wrong ;-)
(edit: just joking. The $1T coin would also be deposited at the Federal Reserve. I don't know why it can't be a note, other than that's how the law was written.)