Trillion-Dollar Coin

About

The Trillion-Dollar Coin is a proposal that argues the United States government should mint a trillion-dollar coin and deposit it into its own accounts, in order to avoid veering off the debt ceiling. The coin was proposed first in 2011, and has since resurfaced occasionally among those interested in financial policy.

Origin

The trillion-dollar coin idea was first developed in a comment on a post on financier Warren Mosler's blog, left by a user named "Beowulf."^[1] The comment reads:

Curiously enough Congress has already delegated to Tsy [Treasury] all the seignorage power authority it needs to mint a $1 trillion coin (even numismatic coins are legal tender at their face value and must be accepted by the Federal Reserve)– the catch is, its gotta be made of platinum (ditto the balls of any President who tried this). So for a 1 oz. coin, Tsy would net only $999.998 Billion :o)

Beowulf's real name is Carlos Mucho and he works as a lawyer in Georgia. The trillion-dollar coin is legal because of a law which allows the US Treasury to mint "commemorative" coins with platinum for collectors without authorization from Congress. These commemorative coins are still legal tender, so they can be used to pay all debts, public and private.^[2]

An imagined design for the coin by Flickr user DonkeyHotey was uploaded on January 5th, 2013, and was then used in many articles and online platforms.^[8]

The blog comment by Beowulf emerged first during the debt ceiling showdown in 2010 and 2011. The debt ceiling is the limit on how much the government can borrow, and usually it is raised to pay back money the government has already borrowed. If the debt ceiling is not raised, the United States government defaults on its debt and essentially declares bankruptcy, which many people believe would lead to a global economic crisis. Republicans in Congress have periodically sought to prevent the government from raising the debt ceiling to pay for what it had already spent, and used the threat of default as a bargaining chip with Democratic Presidents like Barack Obama.

The trillion-dollar coin could be used to prevent a debt ceiling breach if the government took the coin and deposited it into its own account at the Federal Reserve. A President could do this without authorization from Congress.

Spread

The trillion-dollar coin idea was discussed in various policy blogs and forums throughout the 2010s, as periodic debt ceiling crises became increasingly regular. In 2012, a New York Times editorial by Nobel-prize-winning economist Paul Krugman summarized the discussion within the economics field about the trillion-dollar coin, and argued that the coin would not lead to inflation.^[3] Many other commentators argued both for and against the coin.

Some citizens and also members of Congress advocated for the coin, using the hashtag #MintTheCoin. For example, Congresswoman Rashida Tlaib posted a pro-coin tweet on her Twitter^[4] account @RashidaTlaib on September 28th, 2021, earning over 2,100 likes in two years.

The online conversation around the trillion-dollar coin inspired memes from the beginning. The National Republican Campaign Committee tweeted the meme below on January 9th, 2013, falsely claiming a trillion-dollar coin would have to contain a trillion dollars' worth of platinum (seen below) and earning just over 80 likes in a decade.^[5]

On January 22nd, 2023, as the United States faced another debt ceiling showdown, Janet Yellen was asked about the trillion-dollar coin and said it would not happen and was a "gimmick."^[6] On May 9th, 2023, as the debt ceiling renewal date drew closer, President Biden was asked about minting the coin and answered that his staff had not "studied" the possibility of minting (see below).^[7]

Various Examples

Search Interest

External References