Trillion-Dollar Coin

The term "trillion-dollar coin" refers to a theoretical concept whereby a government could mint a physical coin out of platinum with a face value of $1 trillion, which could then be used to reduce the national debt.

This conceptual strategy was first proposed in 2011 as a potential alternative to raising the debt ceiling. Although there were several high-profile proponents of the idea, it was eventually rejected in 2013 by Treasury Department and Federal Reserve officials.

The idea of minting a trillion-dollar coin entered the national conversation again in early 2023 after Republicans regained control of the House of Representatives, setting up another bout of political wrangling over the debt ceiling.

The legal basis for the concept of a trillion-dollar coin arises from the fact that the United States Mint is authorized to produce platinum coinage without any restrictions as to the number of coins produced or their face value. In other words, the Mint could theoretically produce an unlimited amount of platinum coins, each with an arbitrarily large value. By contrast, there are statutory limits regarding the amount of paper currency that can be in circulation at any one time as well as limits to coins made of other materials.

Although distributing such a high-value coin would presumably produce inflation if it were exchanged throughout the wider economy, proponents of the trillion-dollar coin argued that this would not be the case if the Mint only distributed this coin to the Federal Reserve. The Federal Reserve could then deposit the coin in the Treasury, thereby reducing the national debt and postponing or eliminating the need to raise the U.S. debt ceiling.

The idea of a trillion-dollar coin gained widespread media attention in 2011 as Washington struggled with the question of whether and how to raise the U.S. debt ceiling. Although the 2011 debt ceiling was eventually raised, this issue resurfaced again the following year as the national debt once again reached the debt ceiling.

The idea of minting a trillion-dollar coin to reduce the national debt gained widespread media attention during the debates surrounding raising the debt ceiling, which occurred between 2011 and 2013. This included mentions in prominent publications such as The Economist and The Washington Post, along with several others.

Although the conversation about minting a trillion-dollar coin largely remained dormant for a decade, the idea reemerged in 2023 after Republicans retook control over the House of Representatives. GOP leaders have signaled that they will make significant demands—including spending cuts on programs such as Social Security and Medicare—as part of the negotiations for raising the debt ceiling and avoiding the widespread repercussions of a default on US debt.

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