Thread by @soncharm

If The Coin happens (because it’s legal, which it is, and because it solves the debt-ceiling problem, which it does) your next question - the real question - is what will Congress do.

Will they just be content to leave Coin-based federal financing as the status quo?

Once the Coin seal is broken, if nothing else changes, we provisionally (in this thought experiment) enter a new world in all new appropriated dollars could be financed by Coin instead of Treasuries, with no limit. Ok, what’s the mix, and who decides?

In principle, in a year with (say) $10 trillion of spending, there could be

$10trn Treasuries, no Coins
$10trh Coins, no new Treasuries

or any combination in between.

Who decides that and how?

Is this state of affairs a stable equilibrium?

I submit:

Probably, that’s not really a stable equilibrium.

Probably, for a number of reasons (good and bad), key political and economic decision makers would not be at all content to just leave things like that.

And so, they wouldn’t.

One possible outcome is that we simply get a Coin Ceiling in addition to the Debt Ceiling. Congratulations, all that’s happened is a second avenue of Ceiling fights has been opened up.

Another possible outcome is that someone in Congress puts forward a bill limiting the denomination of coinage to something non-crazy-sounding such as $1000. And who in Congress votes that down besides Tlaib? So the Coin solution is killed.

What I don’t find plausible is that because some internet guys noticed this loophole, all federal financing passively jumps to Coin-based at some point, and no one does anything, this just takes over as the way things are done. There would be *some* reaction.

Ok, so what reaction would that likely be? If you don’t have an answer for that, or at least some sort of fuzzy prediction about it, you haven’t actually explained why the Coin is a long-term solution.