Any proposed solution to America’s debt problem is bound to have its issues. One current favorite in some circles, however, is so absurd that it almost transcends the brilliant/idiotic dichotomy. The idea is that the government can simply mint one coin and say that it is worth $1 trillion, thus letting the Treasury Department say that it has an extra trillion dollars and temporarily dodging the debt ceiling question. This is being taken seriously by leading Democrats.
A truly wacky solution
The idea is effectively the same as telling a poor person to just buy more money, except that in this case the federal government technically has the power to do it.
The minting of coins in gold, silver, copper, and other normal materials is subject to congressional approval but there is one exception.
According to a 2001 law the treasury is able to mint any denomination of coin in platinum without requiring any permission from Congress.
The idea of using this authority to address the debt issue emerged from a comment on a blog post made in 2010 which quickly attracted serious attention.
President Obama has subsequently admitted that the trillion dollar coin idea was discussed in 2011 as a possible solution for debt ceiling woes. Obama described the idea as “wacky.”
Treasury Secretary Janet Yellen feels the same way and has dismissed the idea as a “gimmick” which would not do anything to restore faith in the government’s ability to pay debts.
There may be some issues
The proposal is still being discussed seriously in Congress and the White House. The mint in West Point, New York has plenty of platinum coin blanks on hand and could have the $1 trillion ready in minutes if it is approved.
It’s an absurd idea and even those advocating for it admit that. At the same time, there is something very appropriate about something so ridiculous being suggested in 2021.
What better encapsulation of our papier-mâché economy could there be than suggesting that the government simply point to a coin and say that it’s solved the debt crisis?
Of course it is impossible to know what might happen if the unprecedented idea was adopted. The economic consequences could be disastrous.
The fact that such an absurd thing is being seriously discussed in the White House and by leaders in Congress says something about how extreme America’s debt issues have become.
Still, asking the federal government to conjure $1 trillion out of thin air might still be a more realistic request than asking for a sensible approach to spending,