Let’s face it: the US has alot of debt. Trillions of dollars of debt as a matter of fact. And, what’s a cooler way of resolving our irrational amount of debt than creating a trillion-dollar coin?
The United States & Its Self-Imposed Debt Limit
Aside from Denmark, the United States is the only nation in the world that has a self-imposed limit on the amount of money it can borrow. In the US, Congress authorizes spending, sets taxing levels, and sets a limit on how much the country can borrow.
The United States is currently on the brink of hitting its debt limit. Buckle up Americans – it’s about to get real.
Credit: David Maiolo/Wikimedia Commons
Congress has regularly raised the debt limit to allow the Treasury Department to borrow the money needed to pay its bills. However, it usually comes down to the wire for Congress to reach a deal.
What If The Debt Limit Isn’t Raised?
If the debt limit isn’t raised, the government will be unable to cover its normal expenses such as Social Security payments and salaries for government workers.
And, if the government workers aren’t getting paid, the government will have to shut down.
Credit: Gage Skidmore/Flickr
On September 30th, with only hours to spare, President Joe Biden signed legislation to avoid a partial federal shutdown and keep the government funded through December 3rd. However, this does not resolve the debt limit issue.
How Creating A Trillion-Dollar Coin Can Resolve The United States’ Debt Burdens
There are serious stakes at hand if the debt ceiling isn’t increased, and tensions between Democrats and Republicans continue to raise them higher.
“There is no chance Republicans will help lift Democrats’ credit limit so they can immediately steamroller through a socialist binge that will hurt families and help China,” declared Mitch McConnell, the Senate Minority Leader (Republican Party).
Credit: Gage Skidmore/Flickr
Historically, Congress would approve the lift. However, Republicans in Congress weaponize the debt limit whenever a Democrat is president. Mitch McConnell wants the Biden administration to pay a big price to get him on board on increasing the debt ceiling, which could force Biden to accept large cuts to the federal budget.
So where does the platinum coin come into play?
Well, there’s a weird provision in U.S. law that grants the Treasury Secretary the ability to mint and issue platinum coins in any quantity and denomination they choose. This grants Janet Yellen the ability to make a coin and assign it any value her heart desires.
She can mint a platinum coin with a face value of $1 trillion, deposit it at the Federal Reserve, and draw on that account to keep paying the government’s bills without borrowing.
Final Thoughts
Sometimes being put in a preposterous, silly, and breathtakingly dangerous situation requires you to make a decision that is equally as silly and preposterous.
Minting super-high-value coins to fund the government is that silly, preposterous decision. At the very least, it can give us time to devise a practical solution we can all agree upon.
Don’t be like the United States – Here’s an article on Money Decisions & How To Make Them
