As Congress struggles to raise the debt ceiling ahead of a predicted Oct. 18 deadline for the U.S. government running out of cash, some economists have raised the prospect of minting a trillion-dollar coin as a way to stave off any economic fallout from the artificially created crisis.
One could be minted ”within hours of the Treasury secretary’s decision to do so,” Philip Diehl, former director of the United States Mint, told Axios. “Voila, we’d have bought ourselves the equivalent of a trillion-dollar increase in the debt limit, without any impact on inflation.”
But Treasury Secretary Janet Yellen says a trillion-dollar coin is not going to happen.
“I’m opposed to it, and I don’t believe we should consider it seriously,” Yellen told CNBC on Tuesday. “It’s really a gimmick, and what’s necessary is for Congress to show the world can count on America paying its debts.”
Yes, minting a trillion-dollar coin is a gimmick, but not only might it actually work, it could have the ancillary benefit of emphasizing the absurdity of the debt ceiling fight and maybe even put a stop to future ones. Congress is not debating whether to spend more money. It has already spent the money. The debate is over whether to actually pay the bill. Even those who are maneuvering to prevent the raising of the debt ceiling don’t actually want the U.S. to default.
“The debt ceiling was never designed to be a weapon of destruction,” economist Zachary D. Carter wrote in the Washington Post. “Legislators should not have the power to threaten global financial calamity in pursuit of increasingly petty partisan aims. With a platinum coin or two on account at the Fed, the debt ceiling could be rendered meaningless indefinitely, eliminating a wholly artificial and unnecessary source of crisis. Silly problems demand silly solutions.”
There remains debate over whether minting a trillion-dollar coin without congressional approval would even be constitutional, but Yellen’s stern rebuke of the idea means we won’t find out this time around. And so after this debt fight passes, we’ll have another one in the not-so-distant future.