Yes, this, and the whole “We have to let them get away with whatever they want now because what if they use this to get whatever they want later.” is just feigned helplessness. You’re already facing people who don’t play by the rules.
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“Balancing the budget” isn’t a good in and of itself and is rarely required. Why should it be? You and I sure have to do so but we also don’t issue our own currency. If you are concerned about all those interest payments going to already-wealthy institutions, just set the interest rate permanently at 0% and be done with it.
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Legally speaking, yes. It’s not a question of if the President can order the Treasury Department to mint a 1 trillion dollar coin. It’s more the question of will the Federal Reserve purchase that coin/debt? If not then it’s a wash. That’s the real problem of this.
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The Federal Reserve has to do what they are told. Always has and always will. Any profit flows to the treasury as well.
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Not necessarily. They don’t have to buy government debt, that’s literally in their charter. They buy it nominally as it helps with liquidity and usually doesn’t affect inflation all that much. They focus now on full employment with 2% inflation target being a secondary goal now. Internal Fed policy cannot be forced by the President nor Congress without passing legislation to facilitate that.
Essentially, the Fed has leeway on its decisions. The governors nor the chairman historically work out of step with the sitting president save for the last one. Powell and the board actively avoided conflict but essentially shot down Trump’s demands for an expansion of the Fed’s balance sheet of government debt above their original targets plus adjustments.
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As screwy as the system is, the coin is not a thing to be purchased by the federal reserve. It is an asset to be deposited with them.
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Ah thanks for the clarification. Apologies.
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That is a fundamental misunderstanding of the problem. Congress, not the President, has the power of the purse. The President doesn’t get to spend money Congress has not appropriated. The problem right now is that spending funds Congress has already appropriated will exceed the Congressionally imposed debt limit in about two weeks. Moreover, Congress is seeking to pass a $1 trillion infrastructure plan and a $2 to $3 trillion social safety net plan–plans that the President wants passed, but that he is powerless to enact unless Congress passes them.
Debt-limit chicken is a game played every few years by congressional Republicans against Democratic majorities or to embarrass Democratic presidents. It is not about “congressional oversight.”
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Not that that makes it acceptable to the people in charge of going about things the way they have always been done.
Minting the coin, Yellen said, would be equivalent to asking the Federal Reserve to print money to cover deficits that Congress is unwilling to cover by issuing debt—thereby compromising the independence of the Fed, which is charged with overseeing monetary policy.
I think this is the sound of someone looking at the failure of lies they have told themselves and others about how the system works. If the vaunted independence of the fed can be so easily compromised, what is its value? Let’s all look at how meaningless the national debt is that it can be entirely swept away in a couple days!
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I don’t know honestly if it would work or not in the end. It’s a ridiculous solution to a ridiculous problem. There are all sorts of technical reasons why it couldn’t work probably because the US is great at handcuffing the government and then getting pissy that it does a poor job.
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It’s not Congressional oversight of the President. The President didn’t authorize those expenditures- Congress did.
It’s also in the Constitution that we have to cover our approved expenditures.
Fourteenth Amendment, Section 4:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
-This whole debt ceiling construction is unconstitutional. Congress already approved that spending.
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i don’t disagree and wouldn’t have any problem with the democrats making that argument ( so long maybe as it’s coupled with some gauge on how much spending is good )
however, they are the party of fiscal responsibility they just don’t say they are. heck, they’re entertaining the idea that 1.5 vs 3 trillion will make some sort of difference to the budget - even when the 3 trillion plan is accounted for
they seem scared to argue their positions on the merits. even though the merits are factually on their side. and now they’re off now on biden’s tag line - “you don’t have to vote for it, just get the hell out of the way” which isn’t an argument at all.
they’re forgetting their audience is america, not republicans
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It’s also bizarre to me how many politicians will continue to strongly defend the existence of the filibuster in the Senate (which is an arbitrary rule, not a law, and is being abused like never before) but are perfectly happy to find gimmicky work-arounds that effectively end it. Bernie, bless his heart, exemplifies this attitude. For example he wants to overrule the senate parliamentarian and pass all kind of things like Medicare For All through the filibuster-bypassing budget reconciliation process that was never meant for the kind of stuff he wants to do. But if you’re going to do that, what’s the point of keeping the filibuster at all? The opposition could clearly do the same kind of gimmicks once they’re in power, so why not just drop the pretense and go with a simple majority vote if that’s what you want?
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Hey. You passed that bill outlawing murder?
It’s not really approved by congress unless you pass it twice.
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That would be fine. It means that games like the Stonewalling around Garland don’t fundamentally restructure our legal system.
How? Much like the debt limit itself, it doesn’t authorize taxation or spending.
The existence of the coin doesn’t enable that. It would be the same theft as if he stole one of the government auto fleet, but impossible to spend and easy to track.
They have that power to the exact same extent without the coin. Since the founding of the country, the House has had the power of the purse.
In theory it worked that way in the US, until pretending to care about the debt became a useful political tool.
No, the oversight exists where it always has, in the Congressional appropriations process. The coin and the debt limit don’t authorize spending.
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Assuming he owned it? Eventually sell it to a collector for millions of dollars? Or if barred from that, he could melt it down and sell the platinum for $800?
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So what shape should the coin be?
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I wonder if Biden’s game is to not take the coin, to instead bring about the end of the filibuster. Well, whatever works.
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I get that it’s not meant for spending, but what happens if someone…erm…takes it? Does that have any effect at all? It’s not like it would be easy to turn it into cash, but the fact that it is missing - what would that do?
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And in all likelihood post it on Ebay with a bag of meth adderall in the background…
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