I'm not qualified to comment on the law but since notes and coins are
functionally equivalent it seems there is a loophole that can be exploited. 

 

  _____  

From: [email protected]
[mailto:[email protected]] On Behalf Of Jeffrey Fisher
Sent: Sunday, 31 July 2011 9:47 AM
To: Progressive Economics
Subject: Re: [Pen-l] a solution

 

So, then, a legal limit on the amount of paper currency in circulation is
(in logic) a limit on government debt? Or I suppose really on a certain kind
of debt. Or am I missing something?

On Sat, Jul 30, 2011 at 6:35 PM, David <[email protected]> wrote:

But in most countries the accounting convention is that paper issued by
government is treated as a continuing liability of the government but the
issue of coins is treated as a sale by government. Hence outstanding paper
is a 'debt' but coins generate government revenue.

 

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