Tlaib proposes minting two $1 trillion platinum coins to finance monthly coronavirus debit cards

Well that's something!

Tlaib proposes minting two $1 trillion platinum coins to finance monthly coronavirus debit cards

Rep. Rashida Tlaib has proposed sending everyone in the United States $2,000 immediately and then $1,000 per month to counter the economic fallout of the coronavirus pandemic.

The Michigan Democrat's plan would be financed by having the Federal Reserve create new money on behalf of the Treasury. To skirt the federal debt limit, the U.S. Mint would create two $1 trillion coins, and the Treasury would deposit them in its account at the Fed.

I recall this idea coming up during the financial crisis.

What could go wrong?

 

FACTOID:

Federal Reserve Notes aren't money until it's issued by the Fed. Coins are money when they're made.

 

Well, now. This is an interesting idea. This is like the UBI that begs the question of how you would pay for it. I think if I ever get ahold of one of those coins I would hold on to it instead of cashing it out. Those two instruments would be very valuable as collector's items.

 

I realize you are afraid of hyperinflation, but this is just 2 coins it's not like this is a permanent arrangement. So, I don't think you need to worry.

 

If you told me 25 years ago that we would spend three trillion dollars fighting dudes in robes living in caves, I would have said you were crazy. Who knows what sounds crazy anymore.

 

Well I don't think it's going to happen, but I'm curious if there is some economics formula to calculate inflation based on new currency being the only new variable in the US economy?

 

Value of the coin is determined by the market, no person or institution will accept 1 Trillion coin as a payment.

 

I think the debit cards would be the vehicle for inflation, not the coins themselves. But I wouldn't worry about inflation right now, there are few places to spend the money other than rent and E-commerse.

 

Yep. Let’s print currency without backing it even with debt and just send that cash to all citizens.
What could go wrong?
Some of these lawmakers are so stupid, it’s scary that they have any position in government.

 

Sounds good.

As long as I get MY Money.

Besides, Trump's sound "Deficit Hawk Policies" have the US Gov't on track to run up Multiple Trillion Dollar Deficits.

So, according to Trump, "Deficits Don't Matter".

Sounds like a great idea.

When do I get my money?

 

"Scary"? Like Trump? Got it.

 

I think you skipped the article. This would only go to the Treasury.

 

In other words, "gimme gimme gimme."

 

Correction. The coins would be minted at the Treasury and deposited at the Federal Reserve Bank. A private account, not federal(despite the name).

 

This would basically be a vast "expansion" of the money supply.

A really rough calculation, there is about $2 trillion on the Fed's balance sheet right now, so if you add another $2 trillion, you'd get 100% inflation (i.e. your dollar would only be worth half as much as it were before).

The value of the platinum in the coins would be pretty much negligible compared to their face value, so that can be ignored for the equation.
I will point out, however, that if those coins were really really big, and the platinum content actually had a market value of $2 trillion, you could theoretically do this without causing inflation. (But then again where would $2 trillion come from to buy that platinum?)

 

The purchasing power of the retirement accounts of hard working middle class Americans would be devastated. Essentially it would be like extracting wealth from those accounts and passing it out like candy.

 

Works for the 1%, it's about time the other 99 benefited as well.

 

And if someone told you these robed dudes were flooding the world with
refugees, heroin and terrorism you wouldn't have believed it either.

 

Yes, Americans are the 1% of the world. All of them - the poor, middle and upper classes put together.

 

I don't see inflation in the picture. For the most part, the debit cards would only be replacing wages that would have otherwise been earned, but are not because of the coronavirus shutdowns.

If anything, we are in danger of deflation. Many businesses that are being shut down will never reopen. That's a loss of jobs and spending capital.

 

I'm confused. Which "picture" are you talking about?

If you keep the money flowing as it was before, but less work is being done, then you have inflation.

Imagine everyone is earning the same amount of money, but half the services are being offered.

 

And....??

Prices are determined by supply and demand. (The supply of the thing in question and the demand for that thing, not the money) How is either of them being affected in your scenario?

 

The great state of Zimbabwe already tried that. Fat lot of good it did 'em.

 

that was about 8 trillion if not more per Trump - yep, we wasted a lot of money on Bush's needless wars

should have just been a quick retaliatory strike, but Bush thought he was on a mission from God

 

I agree with you. I was mainly against the war because of the money it would cost. A factor few seemed to be thinking about at the time.
However, the way I was thinking at the time, at least they'd get rid of Saddam and the people could have some "freedom".
Oh boy, was I wrong.
Turns out as soon as you get rid of a dictator over there, and the oppressive boot is lifted, the muslims go crazy and you get chaos.

And the US got absolutely no thanks for all the money that was spent. The population over there is not grateful.