Video: The Trillion Dollar Coin ExplainedSubmitted by Peace Gold Love on Mon, 01/07/2013 - 18:26
Video from the Wall Street Journal:
More from Seeking Alpha: There is a bit confusion around on the impact of the Trillion Dollar coin that is being talked about these days. Here's the backstory.
The Govt. has hit the debt ceiling, and unless Congress votes to raise it, USA will go into default. The Republicans in the Congress, freshly bruised from the Fiscal Cliff crisis, have pledged to not raise the debt ceiling unless the Democrats agree to major spending cuts. The Democrats have dug in.
So, at least the theory goes, the Treasury can simply mint a Trillion Dollar coin, the Feds can exchange it for freshly minted cash, and off we go without triggering the default. This is perfectly legal, if rather unusual.
Civilized countries usually have a functioning Govt. which would raise the debt ceiling to pay for spending already approved and executed by the Govt. in the form of past legislature. But, if indeed USA doesn't have a functioning Govt., the Magic Coin will be the salvation. Or, so, at least, is the talk of the town.
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