White House Says No To $1 Trillion Coin
January 12, 2013
In a statement to The Washington Post, Treasury Department spokesman Anthony Coley says that the White House has ruled out minting a $1 trillion coin to pay the government's bills and avoid a debt ceiling debate with Congress.
Talk of minting the coin grew throughout the week, though it was ruled by many as an insufficient solution to the debt crisis.
As Ezra Klein of The Washington Post reports, the idea of minting the coin had been around for a couple of years:
"The idea of minting a trillion-dollar platinum coin was first floated in May 2010, in the comment section of 'The Center of the Universe,' a blog devoted to Modern Monetary Theory. The author was a lawyer writing under the pseudonym Beowulf. 'Curiously enough Congress has already delegated to [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, it's gotta be made of platinum.' "
Following the announcement, White House Press Secretary Jay Carney said in a statement: "Congress either can pay the tab for spending it has racked up or it can send the nation into default, which would have serious economic consequences."
The government, having already reached its $16.4 trillion borrowing limit, will run out of ways to cover its debts and might begin defaulting on government loans by late February or early March.