How the US Government Nearly Made a Trillion Dollar Coin

Summary

The US government considered minting a trillion-dollar platinum coin to circumvent the debt ceiling in 2013, but the plan was ultimately rejected by the Federal Reserve and the Treasury.

Abstract

In 2013, the US government faced a unique challenge when the Republican-led Congress refused to raise the debt ceiling, putting the nation's ability to finance essential expenditures at risk. President Barack Obama's administration sought creative solutions within the law, including the potential minting of a trillion-dollar platinum coin, leveraging a loophole in the 1996 Commemorative Coin Act that allowed the Treasury to issue coins of any denomination as long as they were made of platinum. This extraordinary measure would have allowed the government to inject a trillion dollars into the economy without borrowing, effectively bypassing the legislative stalemate over the debt ceiling. However, the proposal was not implemented due to the Federal Reserve and the Treasury's opposition to the idea.

Opinions

The article implies that the US government's significant debt, over $22 trillion at the time of writing, is a point of concern, highlighting America's reliance on borrowing to fund its daily needs, such as Big Macs and kettles.
The author suggests that the 2013 debt ceiling crisis was a political standoff, with the Republican-led Congress using the debt ceiling as leverage to challenge President Obama's healthcare policy, known as ObamaCare.
The opinion is conveyed that the Obama administration was resourceful in seeking legal loopholes to address the debt ceiling issue, reflecting a willingness to explore unconventional fiscal strategies.
The proposal to mint a trillion-dollar coin was seen as a clever yet controversial workaround to a complex political and economic problem, sparking debate about the legitimacy and wisdom of such a move.
The rejection of the coin idea by the Federal Reserve and the Treasury indicates a professional consensus against using such an extreme financial measure, emphasizing the importance of traditional fiscal processes and the potential risks associated with unprecedented monetary actions.

How the US Government Nearly Made a Trillion Dollar Coin

America needs things. By things, I mean 1.5 million Big Macs a day, and over 6 million kettles a year. But these things have to come from somewhere. And by somewhere, I mean from the not-so-deep pockets of the federal government of the United States of America.

America is an economic superpower. America is the wealthiest country in the world. Well, America is also over $22 trillion in debt. Yep, mic drop.

But how they got to $22 trillion in debt is a whole other story. All you need to know is that every year the US needs to buy all these crucial things like Big Macs and kettles. And nearly every year, Congress sets a bigger debt ceiling for the federal government.

Except, in 2013. The Republican-led Congress refused to raise the debt ceiling, unless the president at that time, Barack Obama, got rid of ObamaCare (To cut it short, this meant children can stay on their parent’s healthcare plan until 26 and no one who is sick or has a medical condition can be denied insurance). Unsurprisingly, Obama didn’t want to do it.

So… Barack Obama and his lawyers started looking for loopholes. And they found one. They thought, if we can’t borrow more money, we could just make more money. And no, not make as in work a 9–5 on minimum wage. I mean make as in counterfeiting money. But it was completely legal. However, the treasury can’t just make a shitload of money. It has to sell a treasury bond equal to the new bill being made.

Except in a 1996 bill about commemorative coins, apparently they can.

The law, 31 U.S.C 5112(k), reads, “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.”

This law was originally intended to let the federal government create commemorative platinum coins for special occasions, but technically, because of the bill’s unclear language, it meant that the Treasury could make a coin, and as long as it was made of platinum, they could declare that it was worth anything they wanted.

So…the genius plan was to make a platinum coin and then whack 12 0’s on it. Then, they would cash it in for a trillion dollars and consequently avoid the debt ceiling.

But here’s the catch- the idea was rejected by the Federal Reserve and the Treasury. Hence, the ‘nearly’. Maybe if you rummage through your change, you can spot a trillion-dollar…Ok, that’s a lie.