FYI, let me know if he isn't serious enough for you and your schoolboy economics
www.businessinsider.com/nobel-prize-winner-paul-krugman-obama-must-get-ready-to-mint-the-trillion-dollar-coin-2013-1

seems unlikely that it will actually happen though
( Naked Ape call me Caitlyn, Tue 8 Jan 2013, 11:50, 2 replies, latest was 13 years ago)

Inflation's cause by, amongst other things, minting new coins right?
Forgive me if I'm wrong, because my knowledge of economics isn't even at schoolboy levels, but wouldn't minting, in effect, one trillion dollars all at once cause it to sky-rocket?
( Kroney, Tue 8 Jan 2013, 12:06, Reply)

Not really, it wouldn't be in the wider economy and wouldn't be spent for anything other than paying off debt.

(PsychoChomp, Tue 8 Jan 2013, 12:09, Reply)

which is owed to someone, presumably?
thus putting it out into the economy?
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 8 Jan 2013, 12:11, Reply)

It's about getting around the debt ceiling, which is a fixed number set by congress and not related to GDP
At the moment the US can afford to take on more borrowing and produce bonds. But congress won't allow it because the tea party lot. This is just a way around a default due to politics not economics.
The fact the reserve doesn't then have to sell bonds for 6 months means banks will possibly buy other assets instead and then it'll trickle down.
(PsychoChomp, Tue 8 Jan 2013, 12:16, Reply)

ah, yeah, I see what you mean.
But presumbaly it could "theoretically" be pulled into the wider economy, in the event of say, a US economic meltdown? because it would be worthless unless that was the case.

So therefore Kroney's got a point below. Also, because economics is basically the science of being a cunt to people, if it could theoretically be dragged into reality becuase of a meltdown, that will be exactly what happens.

See Nothern Rock and "everything will be entirely, exactly fine unless everyone asks for their money right now"

".. Oh"
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 8 Jan 2013, 12:25, Reply)

But it would be in the wider economy by virtue of simply existing.
THe central bank uses it to pay off the debts, thereby crediting their creditors with however much they're owed. The creditors will then declare it as income or whatever and there it is in the economy.

At least, that's how it looks to me with my total lack of knowledge on the matter.
( Kroney, Tue 8 Jan 2013, 12:13, Reply)

fair point
but, given he's a nobel prize winning economist, he seems to have missed a fairly important thing, that being that inventing money tends to catastrophically fuck up your economy.

Although, I dunno, maybe it doesn't any more, maybe it's so virtual and fucked up anyway that anything goes.
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 8 Jan 2013, 12:08, Reply)

He's only saying do it to call the house republicans bluff rather than actually do it.

(PsychoChomp, Tue 8 Jan 2013, 12:09, Reply)

republicans are fucktards over this kind of thing.
there's nothing mental enough he can call that they will actually back down on.

Because I suspect that a catastrophic meltdown of the US economy suits them to a degree, in that it's their best chance of getting power back in 4 years time.
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 8 Jan 2013, 12:10, Reply)

And that is the problem.
Reading about it, A republican has just put a motion "stopping" this from happening and trying to change the law. By saying that, he's implied that it's currently legal to do which makes it more likely to stand up in court.
(PsychoChomp, Tue 8 Jan 2013, 12:17, Reply)