@insouciant: heh. Don't let the absurdity of it make it too confusing. The trillion dollar coin idea isn't actually making new money. No new money is going into circulation. The government would mint a coin so that it becomes part of the Treasury, which can then pay its bills as planned. This is about the debt ceiling, not just fabricating money to pay off debt.
Basically, the US government has the money to pay its debts, but Congress approved more programs than the current limit on the debt can cover. That limit on how much debt the Treasury can take on is called the debt ceiling. It was actually implemented back in the early 1900s to allow the Treasury more flexibility with paying bills in case there was any issue with Congress convening to allocate more funds. So, if the Treasury isn't allowed to use more money than has been approved, the US government would default on some of its debts. The "trillion dollar coin" solution would basically be a bookkeeping trick which simply ignores the debt ceiling and allows the Treasury to use up to an additional trillion dollars that it has access to. This isn't a matter of a coin somehow adding money; it would just legally represent more available funds than are actually approved by Congress to pay debts.
So, it wouldn't add to inflation. No more than the US government just paying its debts as planned. They have already committed to spending money on keeping the government going, they have the money to spend on keeping the government going, and now they're just working out the legality of whether they can use all of the money they have to pay for keeping the government going. This is a loophole that would make using more of the money on hand toward already agreed upon expenses.
The government has the money. They have bills to pay. And they just need approval to pay those bills with the money they have. A trillion dollar platinum coin would technically make this possible and circumvent Congressional approval, but the best outcome would be Congress working out a deal to raise the debt ceiling to allow the Treasury to pay for expenses Congress has already built up.
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