Trillion dollar platinum coin: Minting our road to debt settlement
September 28, 2021
With this one accounting trick, we can eliminate all of US debt – at least in theory. Here’s how the scenario would work: the Treasury Department simply mint a $ 1 trillion face value platinum coin to toss into the Federal Reserve’s machine! The idea may sound new and far-fetched, but since 2011 this wacky but attractive solution to reducing national debt has come under the spotlight several times. This time around, it is more tempting that Senate minority leader Mitch McConnell is not supported in raising the debt ceiling, which holds out the prospect of a government shutdown. A default on US bonds would create an opportunity to drag the stock market down from its recent highs and hit interest rates in the opposite direction. Government bonds are touted as one of the safest assets, and a change in that belief could have the potential to turn the economy upside down.
Politicians have pointed to the “trillion dollar coin solution” as a simple but highly controversial way to solve the US debt crisis. Because the denomination of platinum coins issued by the Treasury Department is not controlled by legal restrictions, a single trillion-dollar platinum coin could be minted and then deposited with the Federal Reserve to erase some of the national debt. So why not make two trillion and burden the debt even more? Some government officials would love to take advantage of this iconic loophole, and over the years, more and more columnists and news sources have cheered the idea.
The proposal has a firm foundation in Section 31 of US Code § 5112. As the code reads: “The secretary may mint and issue platinum investment coins and platinum coins in accordance with specifications, designs, types, quantities, denominations and markings such as may the secretary according to From time to time to dictate the secretary’s discretion. ”
Interesting, isn’t it?
These coins may even have a higher face value than the proposed trillions already mentioned, with the code imposing no restrictions on the face value or the number of coins minted.
The idea was originally circulated during the 2011 debt crisis and re-emerged during the 2012 Fiscal Cliff negotiations; it is still a topic of discussion to this day.
At the United States Gold Bureau, we want to know about all previous reverse platinum eagle designs. Which is your favorite and would you like to see on the hypothetical $ 1 trillion platinum coin?