This is really trivial compared with the literally life-and-death stakes of the coronavirus struggle, but I've been getting many questions about whether we can pay for stimulus by minting a trillion-dollar platinum coin (remember that?) Yes, we could, but there's no point 1/
What was the trillion-dollar coin about? It wasn't about paying for government without borrowing; it was about paying for government without APPEARING to borrow, so as to bypass GOP blackmail over the debt ceiling 2/
By minting a coin with a nominal value of $1 trillion and depositing it at the Fed, Treasury could acquire a Fed account that it could draw on to pay expenses. But the Fed wouldn't actually print more money than it would have otherwise 3/
Instead, as Treasury drew down its account, the Fed would (other things equal) offset the monetary impact by selling off some of the bonds it owns. Since interest on Fed assets is rebated to the Treasury, this would for all practical purposes be federal borrowing 4/
But it wouldn't raise the official size of federal debt, so it wouldn't run up against the debt ceiling. In other words, it would just be an accounting gimmick — and it wouldn't even fool anyone. It would just allow Treasury to bypass GOP blackmail 5/
And the key points, of course, are that (a) the US government can borrow as much as it likes, incredibly cheaply (b) Republicans only pretend to care about debt when there's a Dem in the White House. So the whole coin thing is irrelevant for now 6/
Aha. I didn't realize that some Sanders supporters were among the mint-the-coin crowd. Once again, folks, the coin was an accounting maneuver to avoid blackmail, not an actual funding source 7/ ftalphaville.ft.com/2020/03/24/158…
