Now that economic policymaking has shifted from the rather brief fight over the relatively small House bill to the multi-trillion stimulus bill that is being negotiated on over in the Senate, one of the things that’s been quite heartening to see is a number of progressive figures in the House who’ve been putting pressure on the House Democratic Caucus to put forward their own proposal lest McConnell’s proposal be the only one on the table.
One of the most recent, and most daring proposals, is that of Congresswoman Rashida Tlaib, which would:
immediately provide a U.S. Debit Card pre-loaded with $2000 to every person in America. Each card would be recharged with $1,000 monthly until one year after the end of the Coronavirus crisis.
To sidestep the traditional complaints from more moderate members of Congress about how this would be paid for, Tlaib’s proposal offers a simple and straightforward means of financing direct payments:
The mechanics of this funding approach would be as follows:
• The Treasury Secretary would direct the U.S. Mint to issue two $1 trillion platinum coins, under the legal authority provided by 31 U.S.C. § 5112(k).
• Congress would direct the Federal Reserve to purchase the newly issued coins at full face value.
• The Federal Reserve would complete the purchase by crediting the U.S. Mint’s account at the Fed with $2 trillion in reserves.
• The Fed would retain ownership over the two $1 trillion coins permanently in order to ensure its own balance sheet remains fully capitalized by the Treasury.
• The Treasury Secretary would “sweep” the newly created reserve funds from the Mint’s account into the regular Treasury General Account.
• The Treasury would make the funds available to the Bureau of the Fiscal Service to disperse to every person in America in the form of pre-paid U.S. Debit Cards
No need to get into arguments about debts and deficits in the middle of what is almost certainly the greatest economic contraction of our lifetimes, just mint it, bank it, and spend it.