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Iowa | So I’m gonna throw this out there just for reactions. There is an economic theory floating out there where the treasury simply mints high value coins to pay off the debt. I believe the theory says they use platinum and mint coins of huge values - like $1 trillion and use them to pay off the debt. The cost of the coin is the value of metal, the debt is then paid in these coins when the bonds come due- so the transaction would look like this:
Treasury uses $500 of platinum (just a number I picked) to mint a trillion dollar coin, the 500 goes on the debt side of the ledger, the 1 trillion goes on the credit side and is issued when a bond rolls over. They have effectively increased the money supply (inflation) by 1 trillion. So the debt is paid, and you get to bear the brunt so they can continue. Some economists theorize if the denomination is big enough that no bank can cash it, they are forced to reissue it to the government in exchange for more bonds - meaning they effectively get a do over. Not saying I buy it, but hearing it on both the left and right. | |
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Modern Monetary Theory and taxes
