4 reasons the government won't mint a trillion-dollar coin to prevent a debt-ceiling crisis
The bizarre gimmick is being discussed — seriously, by some — as a way for the government to keep paying its bills without a fight over raising the borrowing limit
With an epic fight looming over raising the debt ceiling, Rep. Jerrold Nadler (D-N.Y.) and others are reviving a quirky old idea to keep the government from defaulting on its debt: Mint a trillion-dollar coin (or two), deposit it in the Treasury, and use it to pay the bills without having to push the borrowing limit above the current $16.4 trillion. "I'm being absolutely serious," Nadler told Capital New York's Reid Pilifant. "It sounds silly but it's absolutely legal." Actually, not everyone agrees. Here, four reasons the magic coin solution will never happen:
1. It's pretty much illegal
The idea of "minting a $1 trillion platinum coin is getting some blogospheric love" because, technically, the Treasury Department has the authority to make platinum coins with any value it chooses, says Kevin Drum at Mother Jones. There's one teensy problem: "This is ridiculous." The law permitting Treasury to mint platinum coins was pretty clearly intended to apply to bullion and commemorative platinum coins for collectors. "There is, apparently, a widespread belief that courts will uphold a literal, hypertechnical reading of legislative language regardless of its obvious intent, but I'm quite certain this isn't true."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
2. It would make the U.S. a laughingstock
"Obviously, this is a gimmick, and no way for a 21st century superpower to deal with its finances," says Steve Benen at MSNBC. Resorting to a cockamamie scheme such as this would turn us into the butt of jokes told around the world. Of course, the fact that people are managing to talk about trillion-dollar coins with a straight face only shows how much "radicalized congressional Republicans" have already raised questions about our creditworthiness and turned our finances into a punch line by "refusing to allow a debt-ceiling increase to pay for spending" Congress has already approved.
3. It would not solve the real problem
Even if President Obama resorts to such an unorthodox move, says Josh Barro at Bloomberg, it won't fix anything. He should only do it if he also promises to issue bonds as soon as Congress allows it so he can buy back any new currency. Then he should push for "a bill revoking his authority to issue platinum coins — so long as that bill also abolishes the debt ceiling," which is the root of the problem. "The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
4. A trick like this would make fiscal conservatives madder than ever
"Of course, this is not going to happen. Creating money out of thin air is hardly a solution," says Charles Riley at CNNMoney. "It could lead to even more concerns from those worried about inflation." An even more dangerous consequence would be that the many critics already railing about the Federal Reserve's monetary easing programs would be "apoplectic" if the Treasury Department "trumped" Ben Bernanke and literally minted a trillion bucks to pay the bills.
Create an account with the same email registered to your subscription to unlock access.
Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
-
'Make legal immigration a more plausible option'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
LA-to-Las Vegas high-speed rail line breaks ground
Speed Read The railway will be ready as soon as 2028
By Peter Weber, The Week US Published
-
Israel's military intelligence chief resigns
Speed Read Maj. Gen. Aharon Haliva is the first leader to quit for failing to prevent the Hamas attack in October
By Justin Klawans, The Week US Published
-
Arizona court reinstates 1864 abortion ban
Speed Read The law makes all abortions illegal in the state except to save the mother's life
By Rafi Schwartz, The Week US Published
-
Trump, billions richer, is selling Bibles
Speed Read The former president is hawking a $60 "God Bless the USA Bible"
By Peter Weber, The Week US Published
-
The debate about Biden's age and mental fitness
In Depth Some critics argue Biden is too old to run again. Does the argument have merit?
By Grayson Quay Published
-
How would a second Trump presidency affect Britain?
Today's Big Question Re-election of Republican frontrunner could threaten UK security, warns former head of secret service
By Harriet Marsden, The Week UK Published
-
'Rwanda plan is less a deterrent and more a bluff'
Instant Opinion Opinion, comment and editorials of the day
By The Week UK Published
-
Henry Kissinger dies aged 100: a complicated legacy?
Talking Point Top US diplomat and Nobel Peace Prize winner remembered as both foreign policy genius and war criminal
By Harriet Marsden, The Week UK Last updated
-
Trump’s rhetoric: a shift to 'straight-up Nazi talk'
Why everyone's talking about Would-be president's sinister language is backed by an incendiary policy agenda, say commentators
By The Week UK Published
-
More covfefe: is the world ready for a second Donald Trump presidency?
Today's Big Question Republican's re-election would be a 'nightmare' scenario for Europe, Ukraine and the West
By Sorcha Bradley, The Week UK Published