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Billmon has a good argument for why the President may not want to go down the Coin route as it would let the GOP off the default hook. Unfortunately it does keep the economy on the hook.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Sun Jan 13th, 2013 at 05:20:14 AM EST
If Obama mints the coin, the Republicans can instantly switch (they're incredibly good at this) from threatening financial chaos to ferociously demagoguing the prevention of that chaos--in a way that the 99.9 percent of the American people who aren't constitutional lawyers or financial economists can easily understand.

We've already gotten a pretty good taste of their material: Like the National Republican Congressional Committee's brilliant argument that the weight of a $1 trillion coin would sink the Titanic.

I said brilliant and I meant it. As a monetary concept, the idea that a $1 trillion coin has to contain $1 trillion worth of precious metal may be so freaking stupid it makes Glenn Beck look like Milton Friedman. But, as a political talking point for the cable news viewing masses--the teabagger masses in particular--it's right on target: simple, intuitively obvious, and hard to refute without using words like "seignorage." It even comes with its own funny graphic.

Yeah, the public can't get their heads around money.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Jan 13th, 2013 at 05:40:16 AM EST
[ Parent ]
Why should they?  Tens of millions of dollars have been spent, at the academic and popular levels, to obscure and obfuscate what money is and how it works; something, when one gets down to it, really isn't all that hard to understand.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sun Jan 13th, 2013 at 11:48:20 AM EST
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Money, mechanically, is easy to understand as a construct, but that is in our day a simple theoretical construct with little meaning.

Money, metaphysically and epistemologically speaking, is far more interesting, given the fetishism built up round money.

Look at the Germans, monetary animists...we are still in pre-socratic turn times when it comes to them, creators of the virtual gold standard (the one they fetishize from the early 20's when they found their miracle Mark...German economics of course being stuck in a pre-Hitler time warp...and don't even get me started on real gold bugs in the US and the UK...)

The interesting things to discover are in the fetishes...

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Sun Jan 13th, 2013 at 12:33:00 PM EST
[ Parent ]
By George - NYTimes.com
I get calls. The White House insists that it is absolutely, positively not going to cave or indeed even negotiate over the debt ceiling -- that it rejected the coin option as a gesture of strength, as a way to put the onus for avoiding default entirely on the GOP.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jan 13th, 2013 at 12:41:27 PM EST
[ Parent ]
The Fed Killed Trillion-Dollar Coin
it was the Federal Reserve that killed the proposal, the official told BuzzFeed, denying a purely political rationale for the announcement, saying the independent central bank would not have credited the Treasury's accounts for the vast sum for depositing the coin.
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Jan 13th, 2013 at 01:10:15 PM EST
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If Obama follows the course described by Billmon I will be very happy - regardless of the consequences - even if he just lets it burn. The damage to the financial sector will be sufficient that hits (hyperbole alert) may be put out on all who had a hand in creating the Tea Party from the Koch brothers and Dick Armey to US Representatives - gladly funded by 0.01%ers. And, presuming they back down, the damage done to the batshit wing of the Republican party and the whole party itself will be serious. The Tea Party House Members will discredit themselves with their base.

I just have a hard time seeing Obama do this, given his previous history as POTUS. He has always found a way to turn a strong position into an outcome that only favors large political contributors, but, in this case, forcing the House to be responsible favors large political contributors and letting the Tea Party Caucus self immolate will be close to a US version of The Night Of The Long Knives, with the crucial difference that the guy the Brown Shirts supported is not in charge. If the Tea Party Caucus buries their swords point up and falls on them just let them bleed out. Don't be in a hurry to dial 911.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jan 14th, 2013 at 01:30:16 AM EST
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