American politicians have been demanding that the United States faces a major debt crisis and that the debt ceiling puts the country at risk of default. Joe Biden talked about the debt ceiling and told Republicans to “just get out of the way” when it came to the decision. Meanwhile, a number of American bureaucrats are coming up with the idea of minting a $1 trillion platinum coin in order to magically boost the treasury with cash.
The concept of a trillion-dollar coin is strongly considered by US politicians, former US mint director says platinum can be minted in just hours
Just creating something new out of thin air these days is a very popular trend, and it seems that many politicians around the world have not thought about the history of economies wracked by excessive monetary expansion. In the United States, government officials debated the country’s debt ceiling and whether or not America would default on its debt.
Speaking at a White House news conference, US President Joe Biden stressed: “Raising the debt limit is up to paying what we already owe…not anything new.” Biden says Republicans are blocking the need to raise the debt limit, and has simply told the party to “get out of the way so you don’t ruin [the country]. “
Meanwhile, a number of government officials and the mainstream media are discussing the idea of minting a $1 trillion platinum coin to save the economy from disaster. It’s no joke and is strongly considered by American politicians who admire unorthodox macroeconomic concepts such as Modern Monetary Theory (MMT).
Moreover, thanks to interesting legislation, the Executive Branch can – without congressional approval – mint coins of any denomination as long as the coin is made of platinum. In addition, Axios reporter Felix Salmon explains that even if Janet Yellen does not tell the public, she can “calmly instruct the mint director to take these steps a day or two in advance.” Salmon added:
At this point, a coin can be struck in minutes at West Point mint. Even if it then needs to be physically deposited at the Federal Reserve Bank of New York, this is only a short helicopter ride.
Yellen described the coin idea as a “gimmick” and, as Rohan Gray, a proponent of MMT, states that “the debt ceiling itself can be seen as a large and poorly designed accounting gimmick”
The unique law allowing the creation of such a coin was established 20 years ago and is intended to help boost the production of commemorative coins. Financial debt crisis is not mentioned in the rules.
The Act specifically provides that Janet Yellen, Secretary of the U.S. Treasury may “mint and issue platinum bullion coins and fixed platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary may, in the Secretary’s discretion, prescribe from time to time.”
While Yellen rejected the idea on Tuesday along with a group of Democrats, Philip Dale, the former director of the US Monetary Fund, said a decision could still be made. Dale noted that the $1 trillion platinum coin could be minted “within hours of the Treasury Secretary’s decision to do so.”
Yellen described the idea as a “gimmick” and told CNBC reporters that “what is needed is Congress to show that the world can count on America to pay its debts.” The CNBC report quotes Rohan Gray, an MMT supporter on the matter, who said he was “sure it” was a gimmick when referring to Yellen’s remarks.
“The fact that[the currency]is an accounting gimmick is its strength, not a weakness,” Gray explains in a paper he wrote for the Kentucky Law Journal and shared with CNBC. “The idea of ’fighting an accounting problem with an accounting solution’ is quite coherent…the debt ceiling itself can be seen as a large and poorly designed accounting vehicle.”
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