United States Debt Default

Probably not. The political gamesmanship being played is a US form of playing "chicken" to see who blinks first. Both will blink soon to avoid default.However, there is a hardcore group of republican freshman representatives in the House who believe that pushing the situation into default would actually be a good thing. Not to be mean but to scare some fiscal discipline into the system ... on their terms (spending cuts, no tax increase) and their terms only. How far they can push the House leadership remains to be seen. A short term debt ceiling raise coupled with some spending cuts before the Aug 2 deadline meaning we will be doing this again in about 6 months. Oh, joy. No debt ceiling raise by Aug 2. Default on domestic obligations first. Treasury would use all possible funds to pay the Bonds delaying Social Security, Veteran's, Medicare/Medicaid, Tax refund, etc, payments. This "shock" should cause one hell of a ruckus and even the most hardcore will give in to at least a short-term debt ceiling raise before they are tarred and feathered.Just don't expect any $billion Platinum "Geithners" to hit the system. Another dip in the US economy, maybe into mild recession, with a similar impact on other world economies. If this happens expect the European and Asian banks and governments to pump money into their economies to stave off the worst slumps. Americans ... all of us.Edited by AZPaul3, : spelin, agin.

They wouldn't. They couldn't.First, the Fed Board of Governors, at its sole discretion, determines what notes in what denominations to purchase from the Treasury. Each individual Fed Reserve Bank in each district, at its sole discretion determines what coins in what denominations to buy. Treasury could strike all the $billion Platinum Geithners it wants but without a purchase order from the Fed they sit in the vault. They do not go into circulation and sit on the Treasury's books, in the Public Enterprise Fund, at production value, not face value.Second, one of the reasons for the Fed, the very crux for its existence is to keep monetary policy out of the government's hands. Frog's little scheme is precisely what the Fed is there to prevent: government diluting the supply and the value of money by churning out cheap money for political purposes.Third, except for numismatic items and bullion sales, all coinage flows through the Federal Reserve at its sole discretion as to amounts and values. The Fed has no use for a $billion Platinum Geithner any more than it has a use for a $50 Gold American Eagle. These are bullion sales to the public and anyone who thinks someone is going to buy a 1 ounce platinum coin for a $billion needs an MRI.Edited by AZPaul3, : No reason given.Edited by AZPaul3, : No reason given.Edited by AZPaul3, : No reason given.

From the same article:

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The "jumbo coin" and "exploding option" strategies work because modern central banks don't have to print bills or float debt to create new money; they just add money to their customers' checking accounts.

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The government has not discussed either option publicly. There are three reasons for this. First, there may be other legal obstacles to using these options that we don't know about ...

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And I'm telling you, Frog, the Fed will never go along for the simple reason that it usurps the Federal Reserve Act letting the administration fiddle with monetary policy, weaken the dollar and dangerously over-inflate the money supply. This plus the fact that the Fed is not required, in its sole discretion, to accept coinage it did not order.

The Board of Governors of the Federal Reserve System. Yeah, right. No one would touch it with a 10' pole. They'd be number 2 on the Defendants list.This whole idiotic scheme would cause more damage than the problem your tiny little mind thinks it solves.

No, just a simple MS Economics. I wouldn't expect you or your Constitutional Law friend to understand macroeconomics, monetary policy, how bad money drives out good money, how monetary policy (specifically given solely to the Fed) includes controlling the expansion and contraction of the money supply (which your idiotic scheme seeks to abrogate) and how the resultant inflation from such st*pid schemes ruins nations.Those who hatch such boneheaded schemes seem not to recognize the power that monetary policy possesses and why it is placed at arms length from the political whims of government.You can see how your crazy scheme would cause a major expansion in the money supply beyond the present needs of the economy leading to an unacceptable level of monetary and economic inflation, yes?I didn't think so.But the Fed does and your st*pid little scheme violently usurps their authority and prerogative in violation of the Federal Reserve Act and (more importantly) in the intent of Congress in placing these rights exclusively with the Federal Reserve Board of Governors. Begin to get the picture here, Frog?I didn't think so.I have no more stomach for this level of st*pidity. Say what you will. I give you the last word.Edited by AZPaul3, : Better thought.Edited by AZPaul3, : No reason given.

Nothing yet. If the other two agencies, Moody's and Fitch, follow suit then that may have an impact on bond interest rates leading to interest rate increases across the economy. But only slightly.The biggest impact is to the ego of the nation. Unfortunately, I do not think it will be enough to move congress, the administration, national politics or the public to address the underlying cause of the downgrade which is we borrow too damn much. No one wants to lose their place at the federal trough and no one wants to ante up more cash for taxes. Our political system is geared more towards giving us what we want want want than towards any fiscal discipline.The real pain is yet to come when the rating agencies downgrade our debt yet again, then again, in this next decade.

Welcome back, Frog!The Trillion Dollar Coin ... again? Seriously, how stupid can people get.Yes, it is legal for an administration to mint such a monstrosity thanks to the unthinking pressures of a political interest group and their undue influence on those geniuses we elect to congress.So, the mint strikes some $trillion platinum coins, puts them on deposit with the Fed which then credits Treasury’s accounts with $trillions cash.Note: There is nothing in the law that requires the Fed to "buy" these $trillion coins. The mint could strike them and Fed refuse to take them.But, if the Fed did it skirts the checks & balances that keeps the government from just willy-nilly churning up the presses and printing $100 bills to its heart’s content. It usurps congress’ role in controlling the nation’s debt (which it doesn’t do but should) by hiding that debt behind a smoke screen and it usurps the role of the Fed in determining monetary policy.What else does it accomplish?It just levied a hidden $trillion(s) tax on the society by injecting cash into the economy diluting the absolute value of M1 by increasing the money supply (and outside the monetary policy preview of the Fed which is the ONLY body legally chartered with controlling that policy).As the government spends its newly acquired windfall, it adds to the inflationary pressures in the economy. The really stupid thing is that, seeing the increased inflationary pressures in the economy, the Fed then must eventually move to counter those pressures by contracting M1. It does this by selling US Treasury Bonds from its inventory and raising interest rates.Society must absorb this new hidden debt in decreased liquidity and higher interest rates both of which dampen economic activity and tax revenues. You have accomplished nothing.This Trillion Dollar Platinum coin scheme is nothing but a hoodwink of the society to skirt the checks & balances of our political processes and established monetary systems.But it won’t increase the debt!Bullshit. The scheme may not show the debt on its face in the usual open politically noticeable way but there is no such thing as a free lunch. If we send then we will pay.If Talib wants to fund a social program, which I am all for btw, she should do it the open way without the deceptive smoke and mirrors.Edited by AZPaul3, : No reason given.Edited by AZPaul3, : No reason given.Edited by AZPaul3, : No reason given.

Its been awhile but I think I still remember how to speak frog. "Evolution" in this case refers to this evolved strain of coronavirus. This product of evolution is coming after us.And that is quite a correct observation of our present predicament. Edited by AZPaul3, : No reason given.