For those who wish for a primer on the topic. (en.wikipedia.org)
TL/DR:
- US Mint is authorized to issue currency of any denomination.
- US Mint can issue currency and then deposit it at the Fed. (Remember the Fed is a private org and officially NOT part of the US Govt.)
- Now the Fed records the credit and reduces the debt (owed by the US Govt to the Fed.)
- This in effect has the same impact as increasing the debt limit - we would just be increasing the monetary base instead of adding to the debt.
But - to say it won't be inflationary also assumes that US Govt spending also isn't inflationary. Which, in my opinion, is a farce.
[For those who wish for a primer on the topic.](https://en.wikipedia.org/wiki/Trillion-dollar_coin)
TL/DR:
- US Mint is authorized to issue currency of any denomination.
- US Mint can issue currency and then deposit it at the Fed. (Remember the Fed is a private org and officially NOT part of the US Govt.)
- Now the Fed records the credit and reduces the debt (owed by the US Govt to the Fed.)
- This *in effect* has the same impact as increasing the debt limit - we would just be increasing the monetary base instead of adding to the debt.
But - to say it won't be inflationary also assumes that US Govt spending also isn't inflationary. Which, in my opinion, is a farce.
(post is archived)