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Good News: Treasury, Fed Both Rule Out Trillion Dollar Coin

CicerosGhost Wrote: Jan 13, 2013 12:37 AM
Should the Republicans, quite miraculously, sprout a spine and NOT RAISE THE DEBT CEILING..... There's nothing for Bernake to monetize.... But let's be honest.... They will fold because half (or more) of them are nearly as progressive as the Dems...
CicerosGhost Wrote: Jan 13, 2013 3:59 AM
Sorry, but no...

For now at least, the fed has restricted its monetization to exchanges of debt instruments or equities (something of (at least perceived) value).

The FED, given it's recent pattern, will only monetize the debt instruments available to it (by an issuance authorized by congress)...

If the debt ceiling isn't raised, then they actually CANNOT monetize the federal budget....

As to the assumption that '...there is no other way...."

Check your math... Us revenues average 260 billion a month...

After debt service 42 billion a month, SS about the same, MC 47 billion, DEF 68... little else is funded but the budget IS balanced....
SMyles Wrote: Jan 13, 2013 1:23 AM
"There's nothing for Bernake to monetize...." You're kidding right? All of the US unfunded liabilities can't be monetized? They can and they will. There's virtually no other way.

The fact that high-level government officials even needed to address this issue at all should tell you how high over the shark American politics has jumped. But the Department of Treasury today did indeed comment on the "trillion dollar platinum coin" lunacy, and rejected the idea that the White House had seriously considered such a "solution" to the debt crisis. Ezra Klein at WaPo reports:

That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law...