The President recently signed a budget agreement spanning two years, which will “suspend the debt limit until March 15, 2017.”
How to combat the debt ceiling has been a recurring event for the last few years with many different remedies suggested to solve the ongoing issue. However, one suggestion, in particular, has peaked the interest of some economists and coin collectors.
The idea? Mint a trillion-dollar platinum coin!
You may recall the trillion-dollar coin fix first came about in 2013, during a similar debt ceiling negotiation. The idea was that the Treasury Secretary could mint a coin that would allow the government to continue paying its financial obligations, like social security, veteran’s benefits, and certain government salaries.
How this idea can even be possible lies in platinum. A detail within federal law states:
(k) The Secretary may mint and issue platinum bullion coins and proof 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.
Essentially, the Treasury Secretary has the legal means to create a platinum coin of any value. If the Treasury Secretary did create a trillion-dollar platinum coin, he or she could then deposit that money into the Federal Reserve. This would allow for the government to pay its debts without raising the debt ceiling.
Some economists believe that the trillion-dollar coin might actually work. However, there are many who are weary of the fix and believe it will cause economic turmoil and rampant inflation if issued. Regardless, if a trillion-dollar coin is minted it would certainly raise the bar for coin collectors and metal investors.
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