It started as a fringe idea — for some, it was a joke — but it’s gaining traction: the trillion dollar coin, a possible trump card in the debt ceiling negotiations. The U.S. could default on its debt as early as Feb. 15, and, given the Congressional brinkmanship that has surrounded the last few debt ceiling negotiations, not many people are looking forward to this next go-round.
Because of a loophole in a bill originally designed to create new, exciting coins for collectors, the U.S. Mint can produce coins worth any amount. In the one trillion dollar coin scenario, Obama would ask Treasury Secretary Timothy Geithner to mint a trillion dollar coin (or two) and deposit it into the Federal Reserve, giving the government enough money to avoid a default.
Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.
The coin has lead to warring Twitter campaigns: #MintTheCoin and #StopTheCoin. “Pretty much every argument against #MintTheCoin is basically: ‘it sounds crazy.’ Not very powerful,” tweeted Business Insider Deputy Editor Joe Weisenthal. He wrote on Business Insider’s “Money Game” blog that the coin would not lead to runaway inflation, as some might expect.
In an interview with Washington Post blogger Greg Sargent, a former NYPD homicide detective with experience negotiating hostage crises said the president could use the coin as leverage against those who have kidnapped the debt ceiling debate. Sargent summarized his takeaway:
“Obama must have a trump card in his back pocket that will resolve the situation without the GOP’s help, if necessary. One of the most important goals is getting the hostage taker to realize that ultimately, he’s not in control of the situation.”
As for what the coin should look like, Krugman suggested it be minted with the face of speaker of the house, John Boehner: “Because without him and his colleagues, this wouldn’t be necessary.” Boehner has not commented on this suggested honor. But, while discussing the coin proposal with Slate’s Dave Weigel, Boehner’s spokesperson Michael Steel asked, “Wasn’t that the plot of a Simpsons episode?”
The coin solution has found some support in Congress, most enthusiastically from Representative Jerry Nadler (D-NY).
But not everyone is on board: Mother Jones blogger Kevin Drum wrote that the proposal would not survive in court, and Representative Greg Walden (R-OR) has promised to introduce legislation to make the coin impossible.
What do you think about the coin proposal?
Update: Talking Post Memo suggested eight other people besides John Boehner to put on the coin. Who would you choose?