Trillion-dollar coin? Washington eyes solution to looming debt crisis
- US facing debt default that would plunge economy into a downward spiral
- Minting a trillion-dollar coin wouldn’t require congressional approval
Talk of a trillion-dollar US coin has returned to Washington now that Congress is mired in another political impasse over raising the debt ceiling.
The idea for the pricey platinum – which would be unprecedented but not necessarily illegal – was originally floated in 2011 as a runaround in the recurring war between Democrats and Republicans over lifting the debt limit to enable the government to pay its bills.
Champions of the idea point to a 1997 law, which in theory would allow the Treasury Secretary to authorise a platinum coin at the value of his or her discretion.
The president could direct the Treasury Secretary to mint a US$1 trillion piece that could be deposited in the Federal Reserve and used to cover a big portion of Washington’s bills.
Such a manoeuvre would bypass Congress, which is again flirting with disaster. Treasury Secretary Janet Yellen warned on Tuesday that the government would run out of cash unless the federal borrowing cap is lifted.
Though it may seem far-fetched, the idea got far enough during the 2013 impasse that the Treasury Department explicitly ruled out minting the coin.