Monday, January 28, 2013
Trillion Dollar Coin? Really People?
Recently with all the talk about the debt ceiling some people petitioned to the Government to issue a trillion dollar coin so that the debt ceiling can be raised without going through all the pain of approval from Congress. It was immediately shot down by the government with good reason. It is impracticable since it will just add to debt and would not solve the problem of debt that we have accumulated over the years. I don’t know who came up with the idea but it was a funny one for a short time since the coin if it ever is issued will not be separate from the government balance sheet but will be included in the liabilities side of it. And how will it be circulated in the market. Is it going to be just kept for the government or some change will be given if it ever is exchanged? The only way to tackle the debt and deficit is to reduce spending along with tax increases. There is no other way out of it, we can issue several hundred coins worth each a trillion but it will not reduce out debt and it will be just as easy way to forget about the debt. This proposal is new but absurd to the extreme. Instead of giving good economic sense ideas about the debt ceilings and the deficit, you have these people coming out with more debt increasing solutions. No wonder the government shot it down before it claim more adherents to it.