trillion dollar coin
If the debt ceiling causes a default or government shutdown and becomes a campaign issue in the 2016 election, there are some signs that the coin could be taken seriously by the Democratic front-runners for president.
The re-shuffle of the last U.S. election that put austerity-minded Republicans in power has ironically resulted in a new anti-austerity economist being hired by Senator Bernie Sanders in the Senate Budget Committee.
Let's not forget that even if the debt ceiling debate does eventually end positively, the 2011 fiasco resulted in a downgrade of the U.S. credit rating, and given how crazy Washington is right now we may be better off protecting our present than betting on our future.
The next Fed Chair will need to be more than another insider bureaucrat. She will need to be an action hero who can kill zombies (i.e. Milton Friedman clones) and save the planet.
Due to the number of baby boomers qualifying for Social Security and Medicare, spending will increase in coming decades as more members of the baby-boom generation become eligible for benefits and the health care cost for each enrollee increases.
Is the trillion dollar coin sustainable? If it helps inspire ideas to solve the planet's economic and ecological problems, it sure can be.
While it may not add up to a trillion, everyone involved with the federal budget recognizes that an "all options on the table" approach is necessary to solve this problem. Currency modernization and the dollar coin need to be part of the discussion.
Considering the destruction the banks have wrought, shouldn't our nation revisit the foolish policy of giving banks the license to create our nation's money, then having our government borrowing that money and paying interest on it?
Countries that pay for what they spend by printing money or, these days, creating it electronically, are usually broke. That certainly fits our bill. And we're printing lots and lots of money. Over the past five years, the Treasury has, in effect, done its $1 trillion coin trick twice.
When it comes to conjuring up magic money out of nowhere, I believe we are setting ourselves up for big trouble down the road, and it matters little whether we do it with quantitative easing or platinum coins.