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Trillion Dollar Coin Could Actually Work To Wipe Out US Debt, Experts Say

Trillion Dollar Coin Could Actually Work To Wipe Out US Debt, Experts Say

A trillion dollar coin idea has been floated as a way to wipe out the national debt, and while the idea of paying off the nation’s hefty tab by printing these coins sounds outlandish, many serious economists think it could work.

The idea for creating the trillion dollar coins has gained steam in recent days, thanks in part to a petition on the White House’s “We The People” site. The petition, which has already received more than 25,000 signatures, reads:

“With the creation and Treasury deposit of a new platinum coin with a value of $1 trillion US Dollars, we would avert the absurd-yet-imminent debt ceiling faceoff in Congress in two quick and simple steps! While this may seem like an unnecessarily extreme measure, it is no more absurd than playing political football with the US — and global — economy at stake.”

Those behind the idea want President Obama to reach out to the Treasury to ask that trillion dollar coins be printed, ABC News notes. A number of these coins would be put toward meeting debt obligations in case the new Congress fails to raise the debt limit.

It could actually work, the report notes:

“While there are laws in place to regulate how much paper, gold, silver or copper currency can be circulated by the government, there is nothing so clearly stated when it comes to platinum. That door open, the Treasury could have the U.S. Mint melt and mold a few trillion dollars of it, then ship the goods over to the Federal Reserve for safekeeping until the time comes to pay the bills.”

Jim Pethokoukis of the American Enterprise Institute blog says that while the idea may be plausible, the trillion dollar coin could be damaging to the national economy.
He says the effects it would have on the market are unclear, and he’d rather not find out what they are.

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Comments

7 Responses to “Trillion Dollar Coin Could Actually Work To Wipe Out US Debt, Experts Say”

  1. Brian V. Sitterley

    Sounds like something so screwy and dishonest only a liberal would think of it. To be fair to Obama, even he would probably not think much of this idea.

  2. Phil Cooper

    What experts? Idiots, all of them. The only way to wipe out the debt is for the government to stop deficit spending. Keep the current taxation level in place and reduce spending to a level of 30% to 40% below revenues. Do that for 20-30 years and they can wipe out the debt. The alternative is a total collapse and reset of the economic system; that will hurt a lot of people, but that's where we're now headed.

  3. Joseph Pijanowski

    This magic coin idea is valid…..but it does not address the root of our debt. HR2990 (The NEED Act) is a related concept BUT it goes the whole way to address our DEBT. It pays off the national debt over time, creates over 7 million jobs and rebuilds our failing infrastructure without causing inflation! Our entire country does not understand that our national debt is completely unnecessary and it is a product of our FLAWED debt based money system. HR 2990 (related to the Chicago Plan) corrects this and it is proven as a valid solution in a white paper by Michael Kumhof and Jaromir Benes. Incidentally these two are from the research department of the International Monetary Fund. http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf
    AND here is another white paper which comes to the same conclusion http://monetary.org/wp-content/uploads/2011/11/DesignOpenMacro.pdf.