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A comment on I Got the Fed to Release Its 2011 "Treasury Default" Playbook. Parent comment

Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by JumpCrisscross on Tuesday November 07, 2023 @05:51PM (#38184200)
> include ordering the Fed to honor Treasury overdrafts

The Treasury hasn't come close to proposing over drafting. It would sell Treasuries and then have cash. If that became problematic, it would mint. The Fed cannot, by law, lend money to the Treasury. It can't even purchase Treasuries from them directly.

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Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by topspin on Tuesday November 07, 2023 @06:23PM (#38184546)
By law the US government cannot permit default. Does that give the executive the power to trump limits on the Fed?

We'll see.

Others argue minting is more palatable. I think legally that's true. I think politically that's false: there is a visceral reaction to any talk of "printing." The various euphemistic ways the Fed can handle it will be preferred. Of course it will end up in front of SCOTUS, but that's a political win: SCOTUS becomes the bad gus trying to "destroy democracy". Or something.

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Re:I Got the Fed to Release Its 2011 "Treasury Default" Play... by JumpCrisscross on Tuesday November 07, 2023 @06:31PM (#38184618)
> Does that give the executive the power to trump limits on the Fed?

The point is it’s unnecessary.

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