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?
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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?
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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?
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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.
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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.
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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.
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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.
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I'm pretty sure the ultimate effect of the coin loophole is a heist movie about stealing the trillion dollar coin.
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