Sunday, January 13, 2013

Why the White House Rejected the Trillion Dollar Platinum Coin

Paul Krugman writes:
Meanwhile, I get calls. The White House insists that it is absolutely, positively not going to cave or indeed even negotiate over the debt ceiling — that it rejected the coin option as a gesture of strength, as a way to put the onus for avoiding default entirely on the GOP.
Bottom line: The Fed will print money by buying even more of the gobs of new debt the Treasury will issue (after one wash through the market) rather than via a coin. It is, indeed, all political posturing from here. In the end, the debt will climb, the Fed will print.


  1. Using treasury debt, the preposterous system will appear obscure and mysterious to average people. Using the coin, the preposterous system would appear preposterous to average people. I think the powers-that-be know that. But the MMTers don't.

  2. Jon Stewart mocked the idea of the platinum coin. I doubt that he has mocked the purchase of treasuries. According to Krugman:

    Above all, however, what went wrong here is a lack of professionalism on the part of Stewart and his staff. Yes, it’s a comedy show — but the jokes are supposed to be (and usually are) knowing jokes, which are funny and powerful precisely because the Daily Show people have done their homework and understand the real issues better than the alleged leaders spouting nonsense. In this case, however, it’s obvious that nobody at TDS spent even a few minutes researching the topic. It was just yuk-yuk-yuk they’re talking about a trillion-dollar con hahaha.

    Hey, if we want this kind of intellectual laziness, we can just tune in to Fox.

    Update: Some people are asking why I don’t go on TDS to explain. Um, first I have to be invited — which hasn’t happened since, I think, 2005.