Can Trillion Dollar Coins Save the Economy?

Yahoo via ABC ^ | 4 Jan 2013 | Gregory J. Krieg

[shove_it]

With President Obama having kicked off debt ceiling negotiations by vowing not to negotiate over the debt ceiling, a new option for paying off the nation's considerable tab is gaining momentum with cheeky fiscal and monetary wonks. It goes like this: Should Congress fail to extend the U.S. debt limit - reached again on Dec. 31 - the president could ask the Treasury to begin printing trillion dollar coins (in a process explained mostly seriously by Jim Pethokoukis on his American Enterprise Institute blog), a number of which could then be put toward fulfilling debt obligations in the event new legislation stalls in Congress...

[shove_it]

This brilliant idea was floated last month and it’s still apparently being seriously considered.

[Sgt_Schultze]

...the president could ask the Treasury to begin printing trillion dollar coins...

Coins are not printed

[shove_it]

Good point. I’m wondering if they’ll work in vending machines.

[faithhopecharity]

Genuine coins are not printed.

[Buckeye McFrog]

2 massive, bodacious end-runs are coming:

1) They’ll do this on the debt ceiling

2) Harry Reid will use Nuclear Option and end the filibuster

Then we’ll be Off to the Races in our Brave New Socialist World.

[The Great RJ]

With the Fed’s quantitative easings and Obama’s Marxist policies we may soon need 100 trillion dollar coins or bills to buy a loaf of bread just like in Zimbabwe.

[Max in Utah]

These people obviously live in a fantasy world. Imagine the laughter and scorn of the rest of the planet if we did something so foolish.

[Sgt_Schultze]

Bill Still talked about this about a year ago ... retiring the debt by issuing money the Fed does not control - quarters ( link ).

[kosciusko51]

When I heard about this coin the first time, it reminded me of the Mark Twain short story The £1,000,000 Bank-Note.

[Perdogg]

If the filibuster is ended the GOP has vowed to grind the Senate to a halt, no business will ever will get done. I doubt Reid will actually do it because if he does, the GOP will do it they retake the Senate some day which will happen.

[American in Israel]

If they mint it, it will end up being melted down for the metal value in it.

[ScottinSacto]

You know that is probably where they got the idea. Nothing new or original in DC or Hollyweird.

[ScottinSacto]

You must have more faith in those GOP vows than I do.

[faithhopecharity]

Thanks. Having run up the debt, the govt can’t repay it. “Magic coins” (inherently worth a few cents but “printed” in trillion dollar denominations) would effectively repudiate the debt. This has always been a surefire trigger to wars, assassinations, coups, insurrections and/or riots, however. (There is really no such thing as a free lunch, alas)

[NeoCaveman]

would effectively repudiate the debt.

Which is inevitable. And all the bad things that follow that you mentioned, too.

Just not yet, not this year.

[Jim Noble]

“To coin money and regulate the value thereof” is a reserved power of Congress. Simple legislation cannot transfer this authority to the Treasury Department.

If the Congress were to authorize the minting of trillion dollar coins made of platinum (or in fact of anything), the antional debt could legally be paid off that way. There is no requirement in the Constitution that Congress establish a specific dollar - metal parity, and in fact minor changes in coinage weights in the 19th century, although perfectly constitutional, caused major political headaches.

Of course, with a platinum market price of around $1500, this would be exactly the same as outright repudiation, and the consequences would be the same.

[napscoordinator]

I can’t believe they haven’t had a “Debt Relief” Concert for America yet. I would have thought that would have been on the table by now.

[Milton Miteybad]

That some serious seigniorage* right there...minting a coin containing perhaps a few thousand dollars worth of platinum, and denominating it as $1 trillion. Can't see how this wouldn't effectively end the U. S. dollar as a viable currency, however.

*the difference between the cost of the bullion plus minting expenses and the value as money of the pieces coined, constituting a source of government revenue.