[Qbert]

"What the hysterics see is a terrible, outrageous attempt to pay the government’s bills out of thin air. This is utterly wrong, and in fact is wrong on two levels. The first level is that in practice minting the coin would be nothing but an accounting fiction, enabling the government to continue doing exactly what it would have done if the debt limit were raised."

The former Enron advisor crafts a new accounting fiction...

[Vanders9]

I agree this is the main objection to the minting of this coin. Currency, surely represents wealth. It is not wealth in and of itself. It would be ok to mint a trillion dollar coin, or even a gadzillion dollar coin, if the wealth that it represented actually existed in some way. But of course it does not.

I wouldn't worry about the first objection, that it is an undignified thing to do. The economic reputation of the USA is already at rock-bottom as it is.

[TheRhinelander]

We actually own most of our debt, not China. A common misperception. So just forgive our own debt.

[KarlInOhio]

The first level is that in practice minting the coin would be nothing but an accounting fiction, enabling the government to continue doing exactly what it would have done if the debt limit were raised.

[Snip]

So minting the coin would be undignified, but so what? At the same time, it would be economically harmless — and would both avoid catastrophic economic developments and help head off government by blackmail.

Or, more accurately, it would be no more harmful than the Federal Reserve creating trillions of dollars out of nothing to lend to the government. When the dam breaks inflation is going to be ugly. Don't get stuck in cash or bonds.

[faithhopecharity]

Destroying a nation’s currency with massive infusions of fake (fiat) “money” is definitely NOT “economically harmless!”. Indeed, its exactly the prescription for (finally) bringing great nations to ruin. Krugman is not so ignorant to not know this. Any good high school history class covers this simple fact. So why is he lying to us about it ?

[vbmoneyspender]

Here’s a useful question that Krugman should ask himself - What would happen if I tried this in the private sector, would I go to jail or to a local psychiatric ward?

[Joe Brower]

Why don't these geniuses just wave a magic wand at the problem? It would be less work and just as effective.

[rawcatslyentist]

This has been Bammy the Slammy's secret cut the deficit in half plan all along.

Just print it.

Till the Chinese informed him of the consequences of trying to pay debt with monopoly money!

[RegulatorCountry]

It’s magical thinking. Straight up voodoo. Worse than “quantitative easing” by an order of magnitude. It’s the stuff of economic Zimbabwean laughingstocks and will destroy what credibility remains for US economic might. Which is, of course, what these transnational leftists no doubt want to do, usher in a single world currency under a single world authority. Got to destroy the US and the dollar first, and they’re just about there.

[Yo-Yo]

Why stop at one trillion?

[NY.SS-Bar9]

How long before we take a wheelbarrow of cash to the store to buy a loaf of bread?

[Ohioan]

I think that Krugman may be crossing the line, now. He has been a notorious Fabian for years; but this article suggests that he no longer is even able to argue by traditional Leftist hypotheses. Certainly the clown suite attempted analogy, suggests a deteriorating ability to recognize actual logical relationships.

William Flax

[LucianOfSamasota]

This is stupid gone to seed.

[Flick Lives]

How about we pretend a tulip bulb is worth a fortune. Oh, wait, it’s been done.

[Brightitude]

The coin should have a picture of Congress in clown suits!

[Logical me]

Oh my gosh! How damn stupid. With thinking like this I am firmly convinced that there is absolutely no hope. We are done. What backs this as@ hole of a coin? As a matter of fact nothing much backs our currency now.

[tsomer]

Rather than waste the platinum,(by the way, where’s that supposed to come from?) here’s a better plan:

Round up all the art school graduates and have them make, find or excrete something for a promise of extra social security sometime in the distant future and a good reference letter (the White House has a press and rubber stamp).

Then, get the New York times art critic to declare them all masterpieces. Afterwards, stash that crap somewhere— no security needed since everyone else will assume it’s junk.

Then, claim the value of all that “art” as a national cultural treasure and base the value of their notes on its declared worth.

[Elsie]

Boink Boink Boink

the king has no clothes!

[a fool in paradise]

"So minting the (trillion dollar) coin would be undignified, but so what? At the same time, it would be economically harmless" - Paul Krugman

Nevermind pesky inflation and devaluation.

We're off on the road to Zimbabwe, we certainly do get around...

[lentulusgracchus]

[Article/Pharticle/Testicle]

...mint one or more large-denomination coins, deposit them at the Fed, and use the cash in the new account to pay bills .....

---

I'm sure the Chinese will be deliriously happy to see one of these supercoins show up at their Washington embassy. They'll be thrilled.

[kevkrom]

All other arguments against the coin ploy aside, here's a fundamental problem with the scheme: Let's say it's National Treasure 3, and Nick Cage's character breaks into the Treasury and steals the $1T coin. How much can he actually get for it on the open market? Is it really worth $1T, or something in the general neighborhood? Or does it have a value -- as a coin -- equal only to its component metal(s)? Or something inbetween?

Or, more to the point, outside of the perception of value, how much is a $1T coin actually worth?