The Trillion Dollar Coin… Coming To A Pocket Nowhere Near Yours
A surprisingly serious proposal in the political world has been making headlines. Congress has been searching for a solution to the looming debt ceiling. The idea proposed would take care of the debt that has been accumulating. Say hello to the Trillion Dollar Coin!
The idea is simple. Produce a pair of “Trillion Dollar Coins” at a U.S. Mint facility and deposit them into federal reserves to pay off debt. The Washington Post summed it up a recent article which explains further.
Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases. Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.
A lot of media coverage surrounding the idea has been focus on the legality of idea, and also how politically feasible it would be. Some are considering this as a manipulation of the system. Aaron Blake of the Washington Post had this to say: “regardless of whether you think it’s a good idea, the trillion dollar coin would undoubtedly further poison the political well of a federal government whose well is already downright toxic.”
Do you think this is a good idea and could help with the debt crisis? Or, do you think this will just send us further into a never ending hole of debt problems and make us laughing stocks around the world?