Tuesday, September 13, 2011

A foolproof plan to balance the budget and stimulate the economy

As you may know, one of the ideas tossed around for dealing with the debt limit was to have the Treasury mint a trillion $ coin and then have the Fed "buy" it from them.

It is not well known, but totally true that Congress has already put the Fed on such a path since 2005 with an extra economic stimulus twist.

The Fed is mandated to buy new "presidential" dollar coins every year from the Treasury. It costs $0.30 to make them so Treasury is making bank. Plus, no one wants to use them so the Fed has to find/build storage facilities to house the unwanted coins.


Currently the Fed is holding over a billion of these coins in 28 different storage facilities.

People, all we need to do in these troubled times is double down on this excellent starter program. Make the Fed buy, say a trillion of these coins every year and store them.

That's $700 billion a year in new revenue and lots of construction jobs building new storage facilities. Plus those facilities will need managers, forklift operators, maintenance workers, security guards...

Hey, maybe the Treasury could make the coins even bigger!

I really don't see what could go wrong here.
Hat tip to 7im.

5 comments:

emerson said...

http://online.wsj.com/article/SB126014168569179245.html

Tens of thousands of people have done this, and it costs the government billions.

Unintended consequences, anyone?

Anonymous said...

I love that people would purchase coins with credit cards and then return the coins. Isn't it great that people value frequent flier miles more then dollar coins.

In the long run aren't we going to move to all electronic banking anyways?

BR said...

Screw airline miles. Why not use a cash rewards card?

Anonymous said...

Actually, what the Fed should do is stop printing paper dollars and make people use these. And f the penny, while we're at it.

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