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Making Unique Observations in a Very Cluttered World

Saturday 23 July 2011

There's a Solution to the Debt Fight That Could Avert Catastrophe -- Why Is Everyone Ignoring It? -

There's a Solution to the Debt Fight That Could Avert Catastrophe -- Why Is Everyone Ignoring It? - 




When you're this far down the rabbit-hole, who's to say which ideas are crazy and which are serious?

Another day, another round of leaks about a potential debt ceiling deal in the making. Yet this ludicrous standoff could be brought to a conclusion tomorrow, without concessions or the specter of legal challenges. It wouldn't require Congress to take any votes, or a “Gang of Six” to haggle over any backroom deals.


But here's an interesting thing: while it is now considered within the “mainstream” that a small group of intractable reactionaries might hold the economy hostage by threatening not to pay the tab that Congress itself ran up, ending the theatrics by creative but legal means isn't. It's a telling example of how our discourse is narrowed, policed by the Very Serious People who populate the Beltway media.


The escape hatch nobody at the Washington Post or the New York Times is talking about is called coin seignorage. It's based on Title 31 of the U.S. code, which authorizes Treasury Secretary Tim Geithner to “mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”


So tomorrow, Geithner could order the mint to manufacture a couple of trillion-dollar platinum coins and swap them for public debt now held by the Federal Reserve. The coins, unlike the bonds held by the Fed, don't count as debt, so the transaction would bring us $2 trillion below the debt ceiling and the manufactured “crisis” would be averted.
Read more -
http://www.alternet.org/news/151718/there%27s_a_solution_to_the_debt_fight_that_could_avert_catastrophe_--_why_is_everyone_ignoring_it/

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