Raise the Debt Ceiling or Issue a $1 Trillion Coin?

Could the minting of a $1 trillion platinum coin avert a chaotic breach of the national debt ceiling, at least for a while?

The idea gained a new flurry of interest earlier this year, when the Treasury Department began a series of “extraordinary measures” to extend its spending horizon. These patches will run their course, as early as June, and then the Treasury will have to reduce payments to Social Security beneficiaries, the Pentagon and others with claims on the federal fisc. Unless, of course, Congress raises the debt ceiling, or the Mint issues the trillion dollar coin.

In its 225th year, the U.S. Mint is perhaps the oldest and least newsy part of the federal bureaucracy. Highlighted on its website now: the second in a series of five sets of quarters honoring women from all walks of life. This and other series have told the story of America over the centuries.

Since 1986, the Mint has produced bullion coins for investors, first in silver and gold, then in platinum and palladium. Available through authorized dealers, they are designed to be physical additions to investors’ financial portfolios. The denominations of coins range up to $100. But a $50-denominated gold coin that will be put on the market on March 30 will weigh one ounce, worth about $2,000 on today’s market. 

So it would be a big day at the Mint if it suddenly produced a $1 trillion coin, even if the actual production process would only require a minor adjustment in the dye used to stamp out today’s $100 coins.

It’s not so far-fetched. As The New York Times reported on Feb. 2, the hashtag #MintTheCoin was trending strongly on Twitter:

What was once a fringe idea is now being presented to top economic policymakers as a serious remedy.

Asked on Wednesday [Feb. 1] about the notion that there might be another option if Congress failed to lift the borrowing cap, Jerome H. Powell, the Federal Reserve chair, said there was not.

“There’s only one way forward here, and that is for Congress to raise the debt ceiling so that the United States government can pay all of its obligations when due,” Mr. Powell said. “Any deviations from that path would be highly risky.”

Treasury Secretary Janet L. Yellen was unable to avoid the debt limit crisis brewing back in the United States as she crisscrossed Africa last week and fielded queries about the coin, which she dismissed as a “gimmick.”

Instead, Ms. Yellen sent two stern letters to Speaker Kevin McCarthy outlining the “extraordinary measures” she was taking to ensure the United States can keep paying its bills and urged Congress to “act promptly” to protect the nation’s full faith and credit by lifting the debt limit.

This correspondent recalls a very similar debate during the Obama administration, when officials were also struggling against opposition  to raising the national debt ceiling. The brouhaha seemed to demand a bit of doggerel. It was duly composed and then published on Jan. 16, 2013: