Calls To Mint Trillion-Dollar Coin Resurface As Government Faces Debt Crunch

There are calls to create a platinum coin worth a trillion dollars in order to prevent the United States from defaulting on its obligations. national debt As the latest, they have resurfaced debt ceiling Capitol Hill is where the battle starts.

Janet Yellen is Treasury Secretary notified Kevin McCarthy, House Speaker (R-CA), and other legislators in a letter The debt ceiling, an arbitrarily set limit on the nation’s debt by Congress, has exceeded the statutory limit at nearly $31.4 trillion as of Thursday. House Republicans and Biden’s administration are currently in negotiations over potential budget cuts. Some Left-wing economists brought back calls for a trillion-dollar coin to address the debt crisis.

Nathan Tankus, a prominent proponent of this idea, stated in an article According to the Financial Times, the main objection to the move is that Federal Reserve policymakers may not accept it as valid. “The coin, having already been issued, would be legal tender, and the Fed would have no basis for refusing it,” He countered. “Even so, I don’t think the Fed would force the Treasury to seek alternatives. So the Biden administration should call the Fed’s bluff.”

Jeff Stein, Washington Post economics reporter, recently asked Rohan Grey, assistant law professor at Willamette University and also a supporter of minting the coin, asked Tankus and Rohan Grey how they would respond to the Supreme Court renouncing the idea. Grey replied by suggesting that policymakers could only “ignore” The Supreme Court “send troops” To ensure that the Federal Reserve accepts your currency.

The plan’s supporters claim that it will help to reduce the number of people who are sick. law Permitting the Treasury Secretary “mint and issue platinum bullion coins and proof platinum coins” does not include an upper limit on a given coin’s denomination. Treasury officials would simply mint a trillion dollar platinum coin and deliver it to the Federal Reserve for deposit.

The theory’s opponents claim that the trillion dollar coin would make inflation worse, which are at their highest levels in nearly four decades.

It is not unusual to think of a trillion-dollar coin. In 2017, former President Barack Obama explained the concept in a 2017 article interview Pod Save America reported that his advisers briefly considered minting a coin in the midst of the 2013 debt crisis. “There was this theory that I had the authority to issue through the mint this massive trillion-dollar coin and on that basis, we could try to pay off U.S. Treasurys,” He made a comment. “It was a very realistic possibility that we couldn’t get the votes for that and we couldn’t get those debts rolled over and we would be in a situation where we were technically in default. At that point, you were in uncharted territory.”

A similar controversy over the federal government’s ability to fulfill obligations emerged two years ago, Rep. Rashida Tlaib (D-MI) tweeted “#MintTheCoin,” A hashtag used by coin supporters during the Obama-era crisis.

After Republican legislators, the most recent breach of debt ceiling was struck a deal with McCarthy under which the party’s new majority would introduce a budget that refrains from increasing the statutory debt limit. In a dispute, Senate Majority Leader Chuck Schumer and House Minority leader Hakeem Jeffries (D–NY) argued. statement Fiscal uncertainty is not only the fault of Republicans. “A default forced by extreme MAGA Republicans could plunge the country into a deep recession and lead to even higher costs for America’s working families on everything from mortgages and car loans to credit card interest rates,” They said.