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You'll probably facepalm at this logic by the GOP ($1 trillion coin-related)

#1peach freakPosted 1/9/2013 11:10:06 AM
http://maddowblog.msnbc.com/_news/2013/01/09/16431779-the-nrcc-forgets-how-money-works?lite

This morning, the NRCC argued, apparently in all seriousness, "The amount of platinum needed to mint a coin worth $1 trillion would sink the Titanic." To help drive home the point, the campaign committee even created an image of a President Obama platinum coin weighing down the Titanic.

Making matters slightly worse, the NRCC says the coin would "pay for [Obama's] spending," which suggests Republicans still don't understand that the White House cannot legally spend money that hasn't already been approved by Congress.

But even putting that aside, the problem with the image and initial argument is that the NRCC appears to have forgotten how money works. A $20 bill does not have $20 worth of paper. Indeed, the paper and fibers that go into a $50 bill do not have five times the value of a $10 bill. And as such, a $1 trillion coin would not need $1 trillion worth of platinum.

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#2OrtegaTronPosted 1/9/2013 11:13:13 AM
Did anyone else think of the Simpsons episode where Burns steals the trillion dollar bill when this story first came out? Or does that show my age?
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#3kozlo100Posted 1/9/2013 11:13:57 AM
What is the deal on this coin anyway? I heard a passing blurb on the news about it, but I haven't had a chance to look into it yet.
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The problem, then, is that if subjective worlds are experienced too differently, there occurs a breakdown in communication. -- Philip K. Dick
#4_Itachi_Uchiha_Posted 1/9/2013 11:18:17 AM
If this is republican logic I'm pretty ashamed that they're on the same side of the fence as I am. Looks like someone never learned about fiat currency.
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#5Anarchy_JuiblexPosted 1/9/2013 11:23:09 AM(edited)
Holy s*** they are stupid.
I guess I'm glad that it always amazes me.

What is the deal on this coin anyway? I heard a passing blurb on the news about it, but I haven't had a chance to look into it yet.

There's laws on how much paper money the feds can print, how much gold and silver coins the fed can mint, but none on platinum so the idea is they can create a $1t coin to pay our debt instead of raising the debt ceiling.
No f***ing clue what this would do to inflation though.

Honestly it sounds like a dumb scheme that will somehow screw us. If our economy can be affected so greatly from lawyering the language and minting a single coin, it's time to f***ing start over.
#6Genesis DragonPosted 1/9/2013 11:26:40 AM
I simply cannot understand why the political sphere contains so many people who are so ignorant about things which they should be the most likely to know about.
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Politics is weird. And creepy. And now I know lacks even the loosest attachment to anything like reality. -Shepard Smith
#7Jayjs20Posted 1/9/2013 11:28:04 AM
Because it sells.
#8SCAMaz0nPosted 1/9/2013 11:31:48 AM
http://platinumprice.org/platinum-price-per-ounce.html
$1,000,000,000,000 divided by $1,595 per ounce platinum
= 626,959,247.65 ounces (rounded off)
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#9Ragnarok0723Posted 1/9/2013 11:32:13 AM
kozlo100 posted...
What is the deal on this coin anyway? I heard a passing blurb on the news about it, but I haven't had a chance to look into it yet.


Essentially, it takes advantage of a loophole that would allow the government to circumvent the current debt ceiling. The debt ceiling is separate from the federal budget, and if it is not raised, the U.S. will not be able to borrow money from the Federal Reserve to pay for the allocations currently reserved in the budget, which would be disastrous. Because raising the debt ceiling is an issue wrapped in politics that would lead to another harrowing debt ceiling fight, the government is looking for a way around that conflict. However, due to certain laws on the books pertaining to our fiat currency, there are limits on the minting of gold, silver, and copper. By making a platinum coin worth $1 trillion, the Treasury ducks the issue. The coin (or coins) would be deposited into the Federal Reserve, from which the Treasury can draw money as it needs. Because it's not borrowing, as in a loan, but simply depositing and withdrawing, it dodges the debt ceiling issue. I'm not sure how it would affect inflation. I would think that it would contribute to a rising inflation rate over time as the money makes its way from the Fed, back into the Treasury as dollars, and into circulation as paid monetary debt.
#10SCAMaz0nPosted 1/9/2013 11:40:49 AM
Ragnarok0723 posted...
kozlo100 posted...
I'm not sure how it would affect inflation. I would think that it would contribute to a rising inflation rate over time as the money makes its way from the Fed, back into the Treasury as dollars, and into circulation as paid monetary debt.

http://www.wired.com/autopia/2008/02/as-platinum-soa/

It would raise the market value of platinum.
Which would raise the cost of making anything out of platinum.
Which would (see link above) lead to some inevitable side effects.

Hey guyz, maybe we should think a bit more before getting involved in hair brain schemes?
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