Some politicians believe they have found the solution to the impasse over debt limit. However, the bullet is made from platinum. Mint a $1 trillion token coin and use it as a cash machine to flood the Treasury with cash and drive Republicans insane.
Even the most serious supporters of this idea, who aren’t that many, call it a gimmick. They claim it is an unusual way out of an accounting problem. If it isn’t solved soon, it will have serious consequences for the economy and pocketbooks of average people.
Chuck E. Cheese, despite all the jokes about which side of the coin should be on — To tempt or taunt Trump? It’s also supported by scholarship. It is possible that the government could make $1 trillion into a currency without the involvement of lawmakers, although it seems unlikely.
This is possible because the Treasury Secretary can’t just print money to pay public loans. This is because the administration seems to be able to mint any denomination of coins without Congress approval, as long as they are platinum.
It was intended to produce commemorative coins for collectors and not create a nuclear option during a fiscal crisis. Oops.
The law states that the Treasury Secretary may mint and issue proof platinum bullion coins or platinum bullion coin in accordance to such specifications, designs and varieties as well as quantities, denominations and inscriptions that the Secretary may, at his discretion.
According to coin advocates, this is the right time. The idea was rejected Tuesday by Treasury Secretary Janet Yellen and some Democrats, as has been the case in the past when leaders had to make tough decisions and find radical quick fixes.
Sen. Mark Warner, D.Va., stated that the only thing kookier about the coin was a politically-inflicted default.
Yellen stated, “What’s needed is for Congress to demonstrate that the world can depend on America paying its debt.”
Rohan Grey, a Willamette University professor of law and expert in fiscal policy, confirmed that it is.
Grey stated that the fact that the coin is an accounting gimmick rather than a strength was a source of its strength in a 2020-21 study published in Kentucky Law Journal. “The idea that “fighting an accounting problem using an accounting solution” is perfectly coherent. The debt ceiling can be seen as an inconsistency.
Unless Congress acts quickly to suspend the ceiling, the United States will reach its Oct. 18 target. The Senate is stuck in a deadlock. Republicans are unwilling to join Democrats in this once-routine exercise. Democrats will not use their votes to solve the problem.
This is what makes shiny coins with 1 and 12 zeroes appealing to others, even if it’s not a proven and bold path.
Many Democrats and Republicans have some questions. Would they want President Donald Trump to order mega-coins such as Diet Cokes to their desks? Are they willing for the next president to be able to do that? Or this one?
There are other extraordinary options, such as the 14th Amendment’s guarantee that “validity and legitimacy of the public debts of the United States, authorized law… shall not be in question”, which some scholars believe could be used to bypass the debt limit.
Jen Psaki, White House press secretary, stated that the White House had considered all options and “none of them were feasible.” “So, we are certain that Congress must act to move us forward.”
In World War I, the debt ceiling was established to allow the U.S. to issue war bond without the need for congressional approval. Only the authorized total was required to be maintained by legislators.
The task of raising or suspending the ceiling was relatively straightforward until recently, as the majority of the debt is derived from spending approved by Congress or covered by law. Everything is now up for grabs.
The Fed is able to introduce new currency into circulation. The Treasury cannot do this. The coin would be minted, deposited with Fed and its value would go into Treasury’s general account. It could then be used to pay many bills.
It is not clear how this would work in practice and what problems it might cause, such as inflation. Democrats don’t seem to be willing to change a complicated process that has for decades been the gold standard in global credit.
In 2013, President Barack Obama was struggling to convince Republicans to adopt the idea of a $1-trillion coin. Donald Marron was a tax policy expert and had previously led the Congressional Budget Office under the Bush administration. He thought it wasn’t a good idea, but not terrible.
Marron stated that analysts had considered several other options to avoid default. These included prioritizing payments and asserting the debt limit was unconstitutional. Marron also suggested temporarily selling Fort Knox’s gold. All raise serious practical, legal, as well as image issues. The platinum coin is relatively shiny in this group.
He said that it sounds like an Austin Powers episode or a Simpsons episode. “It lacks dignity.”
