Cullen Roche, Scott Fullwiler and a host of economists in the Modern Monetary Theory (MMT) camp (I include myself to the extent that I believe MMT is an accurate description of our monetary system, though haven’t signed on to the policy prescriptions) have proposed a simple way around the debt ceiling talks that also would likely lift the veil on how our monetary system actually works. Its a novel approach that would work, in my opinion.
The Treasury is the monopoly supplier of coin (as Fullwiler & Roche point out) and thus could coin or print a $1 Trillion coin (or whatever amount) and place it on deposit with the Federal Reserve. Problem solved.
I encourage you to read Scott Fullwiler’s entire piece:
If you get nothing else out of this piece you will at least understand a little better how our monetary system operates…which will make you smarter than most members who sit on the Federal Reserve Board.
Scott Dauenhauer CFP, MSFP, AIF