Thursday, August 29, 2013

Platinum coin fixes the debt ceiling problem

In 1996, Congress passed a law giving the Secretary of the Treasury authority to mint platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.  The section of the law for these platinum coins is different in that respect from the sections governing commemorative gold and silver coins, and from the section on the normal coins in your pocket.

It has been suggested that he mint platinum coins of very high values, in the trillions of dollars, in order to continue spending money authorized by Congress without having to issue more Treasury debt.  One suggestion is to mint a single coin with a face value of $60T, which would avoid all deficit and debt problems for many years.

The coin would be deposited into Treasury's "checking account" at the Federal Reserve, and the money would only be spent as authorized by Congress, the same as any other spending.  It would not "dump" $60T into the economy all at once, causing hyperinflation.  But Treasury would be able to spend without having to first tax or borrow to refill its account, and the debt ceiling would become moot.

There is a petition you can sign online, if you want to urge the Secretary to make use of this option.  It was considered and rejected by the President and the previous Secretary during the last debt ceiling crisis in 2011, when the US credit rating was downgraded.

If you haven't heard of this before, you can read about it on the web.  The latest post today is at

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