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# The \$1 Trillion Coin : A Programmer’s Advice

January 5, 2013 4:21 pm

If you follow economics / politics (even at a high level), in the last one week, you must have heard of a solution with the phrase ‘\$1 Trillion Coin’ in it. Here is our attempt to get a programming equivalent for the same.

The context is very simple. The Government needs money. Generally the mechanism is this: The Treasury issues debt. The Fed buys that debt and sends money to the Treasury. The government can then spend that money. The catch is, when that happens, debt goes up. and everyone hates that.

So how can the Government get money from the Fed without issuing debt? A legal loophole allows the Treasury to mine coins (meant to enable it to issue commemorative coins) to issue two \$1 trillion platinum coins, and then deposit them with the Federal Reserve. The Fed could then deposit funds with the Treasury in return. Debt does not go up, Government got the money, and everybody is happy. (okay, obviously not everyone is happy)

What is the programming analogy for this? We thought that swapping two variables without using a temporary variable could be a close analogy:

Normal process:

swap(int *a, int *b)
{
int temp = *a;
*a = *b;
*b = temp;
}

Without a temporary variable:

swap(int *a, int *b)
{
*a = *a + *b;
*b = *a – *b;
*a = *a – *b;
}

The temporary variable is the debt that must have been issued. And the authority to print coins, is the ability to add the value of b to the value of a.

The issue with the second approach is this: The temp variable is not tracked, and three/four such transactions in, nobody has any idea of how we got there. Not just that – in the case of the government raising money, bypassing the temporary variable and ‘managing’ with existing debt misleads everyone by painting a wrong picture of the number of temporary variables that need to be cleared later.

The \$1 Trillion Coin sounds like a feasible solution. It is not.

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### 1 Comment for “The \$1 Trillion Coin : A Programmer’s Advice”

1. temp

you didn’t really sell the “not tracked” part at all. that makes little sense in this context.