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White House and Republicans reach a tentative deal to avoid U.S. default

Gatsby said:
I am. The Treasury mints a coin that they say is worth a trillion dollars; the Fed tells the Treasury they now have a trillion dollars in their account; the Fed then removes a trillion dollars from circulation by locking the coin in a vault.

There is no more money in circulation than there was before. The only thing that has changed is that the Treasury's bank account balance says they have a trillion dollars that they didn't have before. The Treasury would still tax and spend however much they are authorized to tax and spend. The practical implications are no different than raising the debt ceiling a trillion dollars.

"But won't that cause inflation?" No. It's the deficit spending that necessitated the coin (or necessitated the debt ceiling increase) that is inflationary, not the coin itself. If Congress wants to fix that, they can spend less or tax more in the next appropriations bill.

"But won't the Treasury introduce a trillion dollars into circulation when they spend that new trillion dollars in their account?" No. They are still only allowed to spend money that Congress has appropriated.
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Right now, the US is the reserve currency of the world. What happens if we can just print up trillion dollar tokens and pretend they magically pay off our debt? What happens to the bondholders of our debt. What happens to inflation if our currency is devalued.

I just don't believe you can take these kinds of actions without consequences and in this case, they may be harder than we can envision.
 
dobieg said:
Right now, the US is the reserve currency of the world. What happens if we can just print up trillion dollar tokens and pretend they magically pay off our debt? What happens to the bondholders of our debt. What happens to inflation if our currency is devalued.

I just don't believe you can take these kinds of actions without consequences and in this case, they may be harder than we can envision.
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You don’t have to believe it.

The platinum coins don’t pay off our debt. These coins would be deposited at the Federal Reserve, and the government then draws cash from its account to continue paying its bills. Nothing happens to inflation, as I wrote earlier. The currency isn’t devalued either. It’s really no different from other countries that have no debt ceiling law.
 
Gatsby said:
From the trillion-dollar coin. That's the face value.
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That's not the way things work, the Fed is either going to have to sell $1 trillion worth of assets into the open market, or it is going to have to add $1 trillion to it's balance sheet( reserve bank credit ).

If the Fed sells assets that is going to have implications on interest rates, or the MBS market. If it expands it's books that is going to be inflationary and drive interest rates down.

There is no such thing as free money, that's just not how the system works, the Fed can't buy something for nothing.
 
upsideguy said:
You do realize that a $1 bill to you is cash, but to the US government is its debt?
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Wrong $1 bills are Federal Reserve Notes, they are not the liability of the Federal Government, they are the liability of the Federal Reserve Banks.

The Fed holds debt assets as backing, and those are the liability of the Federal Government.
 
Patriotic Voter said:
Merrick Garland defined terrorism as an attack on democracy during his confirmation hearing to answer a Republican's question about why Black Lives Matter setting Oregon's Capitol building on fire was not a terrorist attack, but the January 6 U.S. Capitol invasion was one. (Oregon's Capitol building was empty at the time.) Everyone knew long before the hearing terrorism is an attack, such as bombing a building, not someone or a group of people being unwilling to make compromises in legislation negotiations.

I will continue correcting you until you stop using the word terrorist the wrong way.
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How nice for you? I guess?

Just a quick question:

When was the last time you heard a non terrorist claim to hold hostages?
 
gbg3 said:
There is no signed and sealed deal yet - but my hunch is when we do finally have that signed deal, a walk down this forum debt ceiling discussion memory lane (with actual quotes) would create a great number of "Have a nice day" flounces from the left. Especially from those incapable of just saying "I was wrong" - that group who attempt increasingly irrational justifications and comical explanations of what their previous quotes "really meant", which would not even come close to resembling the words their quotes had actually said.;)
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Nobody admits they are wrong these days. Certainly not people like you. It's always some spin or victomhood nonsense. Lead by example and maybe your words will matter
 
poweRob said:
McCarthy loses control. Republicans blowing up deal.

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McCarthy better find a way to make them fall in line, or it's not going to be good for anyone.

Fitch has already put the US credit rating on debt on watch for downgrade.

www.reuters.com

Fitch puts US rating on negative watch as debt deadline looms

Ratings agency Fitch put the United States' credit on watch for a possible downgrade on Wednesday, raising the stakes as talks over the country's debt ceiling go down to the wire, and adding to the jitters in global markets.
www.reuters.com www.reuters.com

I'd say we don't have a deal next week we'll all be paying billions more on the nations debt, money better spent on needful things, whatever we may each believe those to be.
 
MTAtech said:
You don’t have to believe it.

The platinum coins don’t pay off our debt. These coins would be deposited at the Federal Reserve, and the government then draws cash from its account to continue paying its bills. Nothing happens to inflation, as I wrote earlier. The currency isn’t devalued either. It’s really no different from other countries that have no debt ceiling law.
Click to expand...
 
nvflash said:
McCarthy better find a way to make them fall in line, or it's not going to be good for anyone.

Fitch has already put the US credit rating on debt on watch for downgrade.

www.reuters.com

Fitch puts US rating on negative watch as debt deadline looms

Ratings agency Fitch put the United States' credit on watch for a possible downgrade on Wednesday, raising the stakes as talks over the country's debt ceiling go down to the wire, and adding to the jitters in global markets.
www.reuters.com www.reuters.com

I'd say we don't have a deal next week we'll all be paying billions more on the nations debt, money better spent on needful things, whatever we may each believe those to be.
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I hope checks stop going out to SS recipients and military.
Then the shit would hit the fan.

Even most of MAGA would take pitch folks to the MAGA leaders in Congress.
 
noonereal said:
I hope checks stop going out to SS recipients and military.
Then the shit would hit the fan.

Even most of MAGA would take pitch folks to the MAGA leaders in Congress.
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So you hope our military stops getting paid? What a way to boost our military and morale in it.🙄
 
donhughesmusic said:
So you hope our military stops getting paid? What a way to boost our military and morale in it.🙄
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Way to take my post out of context!

Real armature hour.

I will say, I'd rather the military not get their checks than the elderly.
 
Yey, the US avoided pointless, self induced economic collapse for another few years.

Good for you guys!!!!!
 
dobieg said:
Right now, the US is the reserve currency of the world. What happens if we can just print up trillion dollar tokens and pretend they magically pay off our debt?
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But that's not what's happening. This isn't "print more money to pay the debt", it's "do an accounting trick to pretend like we didn't borrow money." If that's inflationary, then the problem was accumulating the debt, not pretending like we didn't for accounting reasons. And Congress is always free to change the deficit at any time, by spending less or taxing more.

What happens to the bondholders of our debt. What happens to inflation if our currency is devalued.

I just don't believe you can take these kinds of actions without consequences and in this case, they may be harder than we can envision.
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None of those things are consequences of minting the coin, or any of the other shenanigans that have been floated to circumvent the debt ceiling. They may be consequences of our fiscal policy being too loose while inflation is running hot, but that should be addressed in the budget and/or the tax code.
 
reflechissez said:
You made an assertion. Show your work.
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Sorry I didn’t realize you were this new to politics.
Or that you missed the link already in this thread about it.

But here you go.

apnews.com

Pelosi: No debt increase until spending limits are raised

WASHINGTON (AP) — Speaker Nancy Pelosi said Thursday that the Democratic-controlled House won't pass must-do legislation to increase the government's borrowing cap until the Trump administration agrees to boost spending limits on domestic programs.
apnews.com apnews.com
 
Gateman_Wen said:
I'm not talking about retaliation, I'm talking about never giving in to terroristic demands.
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Hmm I can’t help but noticed you keep ignoring the fact that the Democrats did the same thing under trump.

I have no doubt you do so because to admit it would show the pathetic partisan hypocrisy that governs your world view.
 
Plasmaball said:
When was this? Because I don't remember

www.politico.com

Trump sides with Democrats in debt limit, funding, Harvey deal

The agreement sets up a brutal year-end fiscal cliff.
www.politico.com www.politico.com

Seems the Republicans where even under trump a pain in the ass
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The date is right there in the article.


Funny how some people have such short memories about their side doing something they want to complain about the other side doing that same thing.

https://apnews.com/article/business-donald-trump-nancy-pelosi-politics-legislation-c52d04f488c14fd8abd6df866855bedc#:~:text=WASHINGTON%20(AP)%20—%20Speaker%20Nancy,spending%20limits%20on%20domestic%20programs.
 
Gateman_Wen said:
Just a quick question: When was the last time you heard a non terrorist claim to hold hostages?
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Irrelevant. Talking obviously is not terrorism, regardless of whether another person uses the word hostage or not.
 
braindrain said:
The date is right there in the article.


Funny how some people have such short memories about their side doing something they want to complain about the other side doing that same thing.

https://apnews.com/article/business-donald-trump-nancy-pelosi-politics-legislation-c52d04f488c14fd8abd6df866855bedc#:~:text=WASHINGTON%20(AP)%20—%20Speaker%20Nancy,spending%20limits%20on%20domestic%20programs.
Click to expand...

Fix your link.
 
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