# 1 Trillion Dollar Coin??
**URL:** https://boards.straightdope.com/t/1-trillion-dollar-coin/646188
**Category:** Politics & Elections
**Created:** [January 5, 2013, 7:31pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188 "2013-01-05T19:31:26Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 7:31pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/1 "2013-01-05T19:31:26Z")
Sorry if this is a repost or if another thread exist on it (I’m just getting used to posting on SDMB as opposed to lurking for the past 5 years)…but I’ve been following this story about solving the debt ceiling via a “1 Trillion Dollar Coin” which would be minted (without needing congressional approval) deposited into the treasury DIRECTLY (hence it doesn’t enter public circulation, thus avoiding hyper inflation) and used to pay off a few of the National Debts (a few as in less than 10%) thus keeping the government running without raising the debt ceiling or defaulting…
Now when I first read about it, it sounded like the plot of an upcoming Albert Brooks/Mel Brooks movie…but apparently it’s an actual idea being tossed around…
[http://economy.money.cnn.com/2013/01/04/platinum-coin-debt-deiling/](http://economy.money.cnn.com/2013/01/04/platinum-coin-debt-deiling/)
So, Dopers…legit solution or Disney magic? And what would be a situation where the idea COULD actually work (or if it is feasible, why wouldn’t we do it?)
Also a separate question. Why only One 1 Trillion Dollar coin? Why not mint 18 of them at once and pay off the ENTIRE National Debt, plus have a little left over for surplus?
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### Author:  [@Aestivalis](https://boards.straightdope.com/u/Aestivalis)
#### Post date: [January 5, 2013, 7:45pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/2 "2013-01-05T19:45:14Z")
Tossed around by whom though? Was this ever suggested by anyone in the administration, or is this some fiscal fantasy created by pundits?
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### Author:  [@Fiveyearlurker](https://boards.straightdope.com/u/Fiveyearlurker)
#### Post date: [January 5, 2013, 7:48pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/3 "2013-01-05T19:48:28Z")
I think this is one of those fun things to toss around, like the electoral tie situation that would have led to a Romney/Biden administration.
But, Obama has very confidently declared that there will be no negotiations over the debt ceiling, so who knows?
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### Author:  [@Lumpy](https://boards.straightdope.com/u/Lumpy)
#### Post date: [January 5, 2013, 8:06pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/4 "2013-01-05T20:06:20Z")
How is this different from printing money?
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### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 8:07pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/5 "2013-01-05T20:07:26Z")
> [@Aestivalis](#):
>
> Tossed around by whom though? Was this ever suggested by anyone in the administration, or is this some fiscal fantasy created by pundits?
[http://www.capitalnewyork.com/article/politics/2013/01/7052758/looking-next-debt-ceiling-fight-nadler-proposes-trillion-dollar-coi](http://www.capitalnewyork.com/article/politics/2013/01/7052758/looking-next-debt-ceiling-fight-nadler-proposes-trillion-dollar-coi)
Eh no one within the administration per se (such as Pres.Obama, Vice Pres Biden,ect) but a few representatives and economist seem to think it’s a good idea, or at least one as equally absurd as our debt is
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### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 8:10pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/6 "2013-01-05T20:10:43Z")
> [@Lumpy](#):
>
> How is this different from printing money?
I’m vague on the exact rules, but it has to do with minting the coin in platinum which has no regulations against it unlike Paper Money and other minted coins (gold, copper, silver) also the money would not go into general circulation, but straight to the federal reserve vault after being deposited in the treasury
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### Author:  [@brazil84](https://boards.straightdope.com/u/brazil84)
#### Post date: [January 5, 2013, 8:15pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/7 "2013-01-05T20:15:46Z")
> [@AlohaBear32](#):
>
> Now when I first read about it, it sounded like the plot of an upcoming Albert Brooks/Mel Brooks movie…
To me it sounds like a job for Austin Powers 🙂
Or perhaps [Dora the Explorer](http://www.youtube.com/watch?v=TnpTcrtsN3U)
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### Author:  [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)
#### Post date: [January 5, 2013, 8:23pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/8 "2013-01-05T20:23:43Z")
> [@Lumpy](#):
>
> How is this different from printing money?
For starters, no backing at all with anything of real value.
> **[Latest US Economy Analysis & Macro Analysis Articles | Seeking Alpha](https://seekingalpha.com/market-outlook/us-economy)**
>
> Seeking Alpha's contributor analysis focused on U.S. economic events. Come learn more about upcoming events investors should be aware of.
> [@](#):
>
> 1. Destroys the currency. Advocates of the Trillion Dollar Coin claim that there is little difference between the US Treasury issuing money and the Fed issuing money. First, this claim simply ignores the importance of the principle of separation of powers and the importance of checks and balances. Vast empirical evidence demonstrates that this has substantive long-term implications, not merely procedural ones. Second, if the US Treasury could issue a trillion dollar coin to finance its spending, it would be creating money that has absolutely no fundamental backing.
>
> By contrast - and contrary to popular belief - when the Fed engages in QE-type open market operations, it is not “creating money out of thin air.” The Fed is tendering one valuable asset (money) in exchange for another (US Treasury bond). The Federal Reserve notes (money) are a liability of the central bank that is “backed” by an extremely valuable and powerful asset (the ability of the US government to tax any and all assets in the US economy) that in many ways can be worth more than gold. Thus, all money issued by the US central bank is backed by very valuable assets. By contrast, any money issued by the US Treasury under the Trillion Dollar Coin proposal would not have any such backing. The economic (e.g. supply and demand of money) and psychological implications of this distinction for the value and stability of the US dollar are profound.
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### Author:  [@Miller](https://boards.straightdope.com/u/Miller)
#### Post date: [January 5, 2013, 8:26pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/9 "2013-01-05T20:26:03Z")
> [@Lumpy](#):
>
> How is this different from printing money?
How is this any different from simply declaring the debt doesn’t exist anymore?
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### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 8:34pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/10 "2013-01-05T20:34:15Z")
> [@Miller](#):
>
> How is this any different from simply declaring the debt doesn’t exist anymore?
Apparently, [That’s being discussed as an option as well…](http://www.deseretnews.com/article/700166294/Democrats-say-Obama-should-invoke-14th-Amendment.html?s_cid=rss-5)
This is actually starting to freak me out a bit…I’m not the sharpest tool in the shed when it comes to economics, but apparently if both of those measures are legal, how is it that our money has ANY value at all? It makes sense on paper (especially our debts to other nations, which I’m not sure how they were even incurred for example, the one to China) but what excuses us..or any nation for that matter…for forgiving/canceling ALL internal debts?
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### Author:  [@Miller](https://boards.straightdope.com/u/Miller)
#### Post date: [January 5, 2013, 8:41pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/11 "2013-01-05T20:41:52Z")
> [@AlohaBear32](#):
>
> Apparently, [That’s being discussed as an option as well…](http://www.deseretnews.com/article/700166294/Democrats-say-Obama-should-invoke-14th-Amendment.html?s_cid=rss-5)
I’m not clear how invoking an amendment that says, “the validity of the public debt shall not be questioned,” is equivalent to “just saying the debt doesn’t exist.” Seems kind of the opposite to me.
> [@](#):
>
> This is actually starting to freak me out a bit…I’m not the sharpest tool in the shed when it comes to economics, but apparently if both of those measures are legal, how is it that our money has ANY value at all?
Like everything else in the world, our money has value because we agree it has value. Value is not an objective quality. If no one on Earth wants gold, then gold is worthless. If no one on Earth wants a dollar, than a dollar is worthless.
> [@](#):
>
> It makes sense on paper (especially our debts to other nations, which I’m not sure how they were even incurred for example, the one to China) but what excuses us..or any nation for that matter…for forgiving/canceling ALL internal debts?
Fear of economic reprisals. If we just say, “Hey, China, you know all that money we owe you? We’re just going to keep it. Neener neener!” Then China will say, “Okay, fine. You know all those cheap goods you’ve been buying from us for the last thirty years? They’re not for sale anymore.”
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### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 9:05pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/12 "2013-01-05T21:05:38Z")
> [@Miller](#):
>
> I’m not clear how invoking an amendment that says, “the validity of the public debt shall not be questioned,” is equivalent to “just saying the debt doesn’t exist.” Seems kind of the opposite to me.
Eh…to see it almost sounded like saying the same thing (but in an opposite way?)
Debt doesn’t exist = Don’t question if it exist or not (or question it period)
Sad/strange though that the value of something is arbitrary. That’s a whole different question, but wonder I Gold is SOOOO valuable only because it’s “shiny” and thus people want it for..whatever…(that’s the argument Stephen Corbet says anyway lol)
And international debts I get (like ours to China) but not internal ones…defense budget is 2 billion dollars short? Okay, I (as President) mint a 2 Billion Dollar coin..here ya go Armed Forces, blast away!
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### Author:  [@OldGuy](https://boards.straightdope.com/u/OldGuy)
#### Post date: [January 5, 2013, 9:14pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/13 "2013-01-05T21:14:11Z")
The point is not to issue the trillion dollar coin (or any number of them) to pay off the debt. Rather it is to deposit $1 trillion on account so then the Treasury can write checks against their balance and not need to incur new debt which Congress might not allow them to do.
Paying off the debt or a trillion dollars of it would quite likely cause inflation as a trillion dollars would enter the private sector and “go searching” for things to buy. Just using it as a government bank balance would not be doing anything different spending-wise than what had already been planned. Yes this would be more inflationary than raising taxes to make the payments because that would remove money from the private sector, but not nearly so as simply paying off the debt and making the expenditures as well.
The other thing to do, of course, is cut expenditures. That has to be worked out in the budget which is entirely separate from the debt ceiling.
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### Author:  [@Musicat](https://boards.straightdope.com/u/Musicat)
#### Post date: [January 5, 2013, 9:21pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/14 "2013-01-05T21:21:56Z")
A trillion dollar coin? I’ll flip you for it!
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### Author:  [@AlohaBear32](https://boards.straightdope.com/u/AlohaBear32)
#### Post date: [January 5, 2013, 9:26pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/15 "2013-01-05T21:26:52Z")
> [@OldGuy](#):
>
> The point is not to issue the trillion dollar coin (or any number of them) to pay off the debt. Rather it is to deposit $1 trillion on account so then the Treasury can write checks against their balance and not need to incur new debt which Congress might not allow them to do.
>
> Paying off the debt or a trillion dollars of it would quite likely cause inflation as a trillion dollars would enter the private sector and “go searching” for things to buy. Just using it as a government bank balance would not be doing anything different spending-wise than what had already been planned. Yes this would be more inflationary than raising taxes to make the payments because that would remove money from the private sector, but not nearly so as simply paying off the debt and making the expenditures as well.
>
> The other thing to do, of course, is cut expenditures. That has to be worked out in the budget which is entirely separate from the debt ceiling.
Thanks for the explanation.
So all in all, it could (in theory) actually work? But what are the chances of the President actually doing it?
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### Author:  [@Lumpy](https://boards.straightdope.com/u/Lumpy)
#### Post date: [January 6, 2013, 1:08am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/16 "2013-01-06T01:08:26Z")
If it sounds too good to be true- an accounting trick can make our financial problems go away- it is too good to be true.
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### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 6, 2013, 1:17am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/17 "2013-01-06T01:17:06Z")
> [@Miller](#):
>
> How is this any different from simply declaring the debt doesn’t exist anymore?
The difference, apparently, is that holders of U.S. Treasury bonds continue to receive their interest payments.
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### Author:  [@TonySinclair](https://boards.straightdope.com/u/TonySinclair)
#### Post date: [January 6, 2013, 1:27am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/18 "2013-01-06T01:27:05Z")
> [@Lumpy](#):
>
> If it sounds too good to be true- an accounting trick can make our financial problems go away- it is too good to be true.
I don’t see anybody claiming that it would make our financial problems go away, but it might keep the Republicans from turning our financial problems into a complete, worldwide disaster.
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### Author:  [@Hellestal](https://boards.straightdope.com/u/Hellestal)
#### Post date: [January 6, 2013, 4:39am UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/19 "2013-01-06T04:39:36Z")
Here is the [GQ thread.](http://boards.straightdope.com/sdmb/showthread.php?t=677774) Maybe it’s informative. Maybe.
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### Author:  [@Kobal2](https://boards.straightdope.com/u/Kobal2)
#### Post date: [January 6, 2013, 4:31pm UTC](https://boards.straightdope.com/t/1-trillion-dollar-coin/646188/20 "2013-01-06T16:31:21Z")
> [@AlohaBear32](#):
>
> This is actually starting to freak me out a bit…I’m not the sharpest tool in the shed when it comes to economics, but apparently if both of those measures are legal, how is it that our money has ANY value at all ?
It hasn’t. Or rather, it only has as much as people collectively agree it has. That’s what the “fiat” part of “fiat money” means (although of course, gold-backed money was fiat money too, when you think about it).
Yes, it makes one’s head spin. I personally would advise not thinking about it too hard. You’ll only go nuts and/or become an economist, neither of which is advisable or much respected.
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