Debt Ceiling Round 2: Fight!

[Kuya]

I'm just afraid that they're gonna put SS and the rest of the safety net on the chopping block.

[kuronosan]

So I hear children of congress don't have to pay back student loans?

[tyven]

So I hear children of congress don't have to pay back student loans?

probably because children of congressmen dont need student loans

[pohibaba]

I don't think there will be a fight over this again. The President has two pretty good options in his hand: the trillion dollar coin and just raising the debt limit himself. Congress will try to sue him if he raises the debt limit himself, but there is absolutely no way that the Supreme Court would rule against him. President Obama will lay these options out to Congress behind closed doors and they will capitulate. They don't want to look weak in this fight.

[archibaldcrane]

President Obama will lay these options out to Congress behind closed doors and they will capitulate. They don't want to look weak in this fight.

They'd love for Obama to act like the rampant dictator they've tried to paint him as for the past 4 years. He won't. Neither the trillion dollar coin, nor the 14th amendment, will play a role in this debt ceiling debate.

[falloutboy14]

I'm not saying that coin idea is either bad or good, but historically hasn't it been a bad thing? When you see the failed currencies that at the end of their life were being issued in millions/billions/trillions? Or is that completely different since it was inflation?

If the coin idea would work, what would be the point honestly? Nobody will be able to actually use it as currency, and from the article I read on it, they would just take the freshly minted coin and deposit it in the Federal Reserve. It seems like a largely symbolic gesture. It's obvious the coin wouldn't be "worth" that much, but it hardly seems to matter as the entire U.S. money system is based on fiat currency. What would be different from making the coin, or just going into the Fed one day, and going, 'Ok, knock 10% off'? Or would it just be the fact that it would be that much clearer to people what is happening? I may also been full of shit since the last econ class I took in college was probably in '04.

The purpose of the coin is that by depositing it in the Federal Reserve, it reduces the deficit by $1 trillion, thus allowing the government to function, while congress gets its act together. It wouldn't cause inflation because it wouldn't change the money supply. Its not as if they're going to release a trillion dollars into circulatation. It's largely just a process to go through to get around the debt ceiling with few/no side effects.

[ringthree]

The purpose of the coin is that by depositing it in the Federal Reserve, it reduces the deficit by $1 trillion, thus allowing the government to function, while congress gets its act together. It wouldn't cause inflation because it wouldn't change the money supply. Its not as if they're going to release a trillion dollars into circulatation. It's largely just a process to go through to get around the debt ceiling with few/no side effects.

Actually, it doesn't reduce the deficit at all. It just provides a means through which the executive can pay the legislative branch's debts.