For non-Americans who have no idea what this is about: <a href="https://en.wikipedia.org/wiki/Trillion-dollar_coin" rel="nofollow">https://en.wikipedia.org/wiki/Trillion-dollar_coin</a><p>All I can say is wow. Idiocracy was a visionary documentary.
Personally, I think that this is a political problem, and a political solution would be the best way to resolve it.<p>There are various legal gimmicks, like the trillion dollar coins or premium bonds (discussed in the article), that have been proposed that might work temporarily. However, I'd expect them to be either struck down by the courts, or banned in a future must-pass government funding or omnibus bill. I don't think the uncertainty created by using one of these gimmicks is worth the benefit of delaying a political solution.<p>I'm not an expert in this topic, so I'm keeping my mind open to other ideas.
The coin has a deposit problem. There is nothing that says the Fed has to create deposits 1-for-1. If you have an unbalanced budget then Treasury dollars deposited at the Fed become like Canadian dollars deposited at the Fed. They start to attract a discount. Since that's how monetary policy is alleged to work (Treasury has to offer the world a discount to get them to part with their 'scarce' money), an antagonistic Fed (or Supreme Court) could easily go down that road.<p>The other alternative interpretation is that Congress has ordered the Fed to pay out a certain amount from the TGA, ordered the IRS to collect a certain amount into the TGA and ordered the Treasury to drain reserves into the TGA to a set amount. Those orders don't add up, therefore the result will be a carried forward balancing item at the Fed.<p>In other words any ability the Fed has to say 'no' to a Treasury payment order either doesn't exist in law, or has been repealed under the doctrine of implied repeal. It also avoids the discount argument, and the issued argument.<p>That concept blows the mind of those who still think money is about shiny coins in bags, rather than a function of accounting entries in a banking system.
What's the grand strategy behind the idea of forever spending more money than we have? Are they betting we're going to invent replicators and end scarcity? Are they just hoping to keep kicking the can down the road until they die of old age? Sooner or later the bill comes due. How utterly fucked are our grandkids?
The debt ceiling was raised three times under Trump. The debt has gone up and up under both parties. This is pure theatrics. The debt ceiling should be abolished as that’s obviously it’s only function at this point.