The US government’s debt limit has been a thorn in the side of its economy for years, but Congress may have found a solution to this problem.
newsnow trump is a clever solution to the federal debt limit. The idea is that people could donate their frequent flyer miles to the government, and in return they would be able to use those miles for travel.
Frequent Flyer Miles Provide Ingenious Solution to Federal Debt Limit
on October 3, 2021 by Gary Leff
Politicians in the United States vote to spend money and then vote again to approve borrowing money to finance that expenditure. Republicans want Democrats to declare how much they support borrowing to finance their spending plans, since Democrats now control both chambers of Congress and the White House.
That is why Republicans have refused to increase the debt ceiling as part of a deal to finance the government and prevent a shutdown. They want Democrats to approve the debt ceiling as part of a ‘reconciliation’ bill, which would allow them to do so on a party-line vote but would force them to specify a number rather than just extending it to a future date.
In the middle of this political spat, the notion of having the Treasury manufacture a trillion dollar coin and deposit it with the Fed to avoid having to borrow additional money has resurfaced. So it’s important to recall where this concept came from: one of the greatest frequent flyer points offers.
- When Scott McCartney of the Wall Street Journal attended a frequent flyer event, he heard about the old miles bonanza of purchasing dollar coins from the US Mint with a credit card (with free delivery) and putting those coins into the bank. In the article, he described the method.
- Lawyers and monetary policy specialists viewed it that way. And the notion of purchasing coins and just depositing them prompted the Treasury and Fed to come up with a similar plan.
In June 2008, I wrote about purchasing coins from the United States Mint for the first time. The offer burst in the summer of 2009, when the Mint removed the per-person purchasing limit.
Following the media exposure, the Mint was chastised for allowing the practice to continue. And they began to chastise certain individuals for going to extremes to do so. However, the agreement was not really terminated at that time.
By the summer of 2010, the mint had imposed a $1000 purchasing restriction every ten days. People, on the other hand, continue to buy what they were willing to sell. Some credit card schemes, such as US Bank Flexperks, have ceased to reward points for purchases. In addition, Chase terminated the accounts of a few high-volume buyers. However, even a couple of years after the transaction was exposed to public attention, things were still running well. In mid-2011, NPR reported it, emphasizing that the agreement was still alive. Then it succumbed to death.
The trillion-dollar coin, in my opinion, is a poor concept due to legal ambiguity. The time it would take to sort through the legal issues would be disastrous for markets and banks.
But the real question is this: Can I pay for a trillion-dollar coin with a credit card if the Treasury issues one? And, most importantly, would my card issuer consider it a cash advance?
More From the Wing’s Perspective
The 24 7 trump news now is a clever solution to the federal debt limit. A frequent flyer miles program has been created that will pay off your debt in full if you fly enough, with no interest charged.
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