The Trillion Dollar Coin: A Practical Guide To Curing America's Deficit

107 Responses

  1. Tarrou says:

    I approve this message. Also, I'd like to propose selling my own state, Michigan, back to Canada.

  2. Ancel De Lambert says:

    Nothing up this sleeve, nothing up this sleeve, nothing in you bank account! Thank you, thank you, I'll be here all night. I'll be here all day, and all year, and all decade and the three after that. I'm the two party system, that's my time, good night!

  3. Lago says:

    A 1 oz platinum bullion coin is what, 1600 dollars?

    so you have the 1600 dollar platinum coin and make a proof coin that's worth a trillion dollars.

    Bam. Done. Debt crisis solved, Krugman style!

  4. Xenocles says:

    So what, if anything, would stop the Fed from ripping up its holdings in US Treasuries and printing money to balance the books

  5. David Schwartz says:

    As I understand it, there's another huge problem. Under existing precedent, if you steal coins from the mint, they are not legal tender but ordinary stolen property. Under US law, a coin doesn't actually become legal tender until the mint has sold it at face value. So if Treasury minted a trillion dollar platinum coin, it couldn't deposit it with the Fed until it first sold it for a trillion dollars. (See Langbord v. Dept. of Treasury)

  6. James Pollock says:

    Finally, there will be a coin even harder to get ahold of than a 1933 Double Eagle.

  7. Andrew K says:

    I'm a little upset that you didn't think of us Canadians. We are friendly enough and we seem to love turning everything into a coin. What's one more jingling around in our pockets.

  8. Patrick says:

    I excluded Canada because I have a jug of your so-called coins, sitting in a closet. They're worthless. You can't put them into a vending machine, and they refuse to accept them at the bank.

    I sincerely doubt you people could afford the Trillion Dollar Coin. You can't even buy a Coke with Canadian money.

  9. CTrees says:

    The most perplexing thing about this, to me, is how none of the stories I've read have pointed out that The Simpsons already did this. In 1998! It didn't end well.

    When our government literally reenacts cartoon plots, something is deeply, deeply wrong.

  10. Xenocles says:

    I'm actually a big fan of your Canadian silver coins. Extra pure silver and a high face value.

  11. John David Galt says:

    Even Zimbabwe has managed to print trillion-dollar bills. And we all know Krugman wants us to follow exactly in their footsteps.

    How about we just deport him there instead?

  12. M. says:

    Highly radioactive coinage: nothing could possibly go wrong

  13. Xenocles says:

    Ooh, this could be the next season of 24 or something. Terrorists steal the shipment of Californium, giving them enough material for a doomsday dirty bomb and throwing the economy into chaos!

  14. Lago says:


    What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?

  15. Rob says:

    So what, if anything, would stop the Fed from ripping up its holdings in US Treasuries and printing money to balance the books

    Nothing, except for the massive amounts of inflation that would occur soon thereafter.

  16. Rob says:

    What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?

    Basically, if we default, it will become difficult or impossible for the US government to borrow money in the future. Given that borrowing is the only thing keeping our government running at the moment since the way they spend money would make a drunken sailor blanch, this would be a bad thing. Well, a bad thing if you're not an anarchist, anyway.

    The government would then need to start printing excess money to pay off its debts, at which point we would go into a hyper-inflationary cycle much like the Wiemar Republic, or present-day Zimbabwe.

  17. darius404 says:

    For the answer to this question, we turned to legal, numismatic, and political experts. Their answers were discouraging. Fortunately, as we'll explain, American know-how will find a way.

    "And what will make it possible to spend $20 billion of your money to put some clown on the moon? Why, it's good ol' American know-how, that's what!"

  18. Jess says:

    Minting a 16 trillion dollar coin is a GREAT idea – after all everyone knows the government can't create money out of thin air – oh wait . . . .

  19. andrews says:

    I am surprised that no one considered the obvious problem with the self-stealing trillion dollar coin.

    Half-life of 2.6 years means that in not much more than a decade, 15/16 of the thing is gone. Missing. Probably stolen, let us waterboard the guards responsible for watching this thing or at least those who have not died of cancer.

  20. David says:

    …in return for Texan independence. No laws would have to be changed.


  21. C. S. P. Schofield says:

    What I'm waiting for, with a certain cynical resignation, is the announcement that the IRS is no longer accepting U.S. dollars as payment of U.S. taxes….

  22. Jim D says:

    While I loved the article, it's probably wrong, but certainly incomplete. Check out the denomination of the current 1 oz platinum coin. Is it $1000? No, it's $100. I've been told repeatedly that it can be (stupidly) spent as a $100 coin, though I've never found a cite.

    As far as I can tell, the denomination has no connection to the value in current practice. So… Why would it be different if the denomination was larger than the metal value instead of smaller? Is there a legal principle I'm missing? I mean, other than the obvious "original intent", which would seem to hardly be a slam dunk.

    Personally, I'd let Texas go gratis.

  23. princessartemis says:

    Jim D, hit Maguire's link for more information on the legal issues involved in a coin being struck with greater face value than the metal it contains. For quarters it's not a problem; for a $1 trillion coin, it's a big one.

  24. Chris says:

    Except that you can't mine Californium. You can only make it in a nuclear reactor or particle accelerator. That's why it's so pricey; each atom is individually made by skilled craftsmen.

  25. Dave Ruddell says:

    You can't even buy a Coke with Canadian money.

    Sure you can. In Canada.

  26. James Pollock says:

    "What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?"

    Rob got half the answer to this, that the U.S. finds it very difficult to borrow money at a reasonable rate (or at all). When some of the Republicans floated the idea that allowing the U.S. to default might be a good idea last year, we got our creditworthiness reduced (for the first time in a VERY long time) and our costs of borrowing went up a little bit.

    The other half of the default, of course, is that the people who hold U.S. Treasury securities suddenly discover that, rather than the extremely stable and reliable investments they thought they have, they have pieces of paper. Remember the little problem we had a few years back when people suddenly discovered that their houses weren't worth as much as they thought? How it made people suddenly stop spending money and hoarding whatever liquid assets they had, instead of spending them on, say, services and durable goods, causing a ripple effect through the entire economy. It would be like that, only bigger. WAY bigger.

    Just like the last time around, there are some Republicans who (plan/hope/intend) to use a threat to hold up extending the debt ceiling to extract concessions from (the Democrats/the President). The trillion-dollar coin is a counter-threat, to blunt the effectiveness of a denial of a raise in the debt ceiling. If the President were to follow that path, it would basically allow the government to float itself a loan, and redeem it later after (the Republicans cave/the Republicans force significant reductions in federal spending).

  27. James Pollock says:

    "You can't even buy a Coke with Canadian money.
    Sure you can. In Canada."

    With all due respect, there's way more weirdness. You guys spell a lot of words wrong, and half the time it doesn't even look like English. And although you don't insist on calling soccer "football", you get it all wrong… God did not intend a 55-yard line. And two different teams with the same team name (out of nine total teams)?
    And that's not even counting in the fact that foisted the Beib on us, you bastards.

  28. Basil Forthrightly says:

    "What exactly happens if we default?"

    First, failure to raise the debt ceiling does not necessarily entail a default. While the US is spending much more than its taking in and will need to keep borrowing money to make payments, there's no technical reason why the government couldn't pay the debt interest with the money it does have, and stiff some other group instead. Thus, it could avoid "default" in the classic financial sense of failing to pay interest due on debt to a 3rd party.

    Second, if we don't raise the debt ceiling, and we default, the government won't have the cash to make other payments as well. Its not just the debt interest payment that gets suspended. Some portion of Federal payroll, Social Security payments, Federal pension payments, vendor payments (military and medical are the bulk), transfers to the states (Medicaid, highway, research grants) would have to be deferred until the US got the cash to cover it. Mostly, we're talking about all that spending that they haven't been able to agree about cutting; the biggest chunks are military and entitlements. In addition, tax refunds would likely be delayed.

    In other words, if we don't raise the debt ceiling, a large chunk of the US economy stops getting income; just what bills don't get paid is not yet certain, but it would include a LOT of non-interest bills. I'm sure Lockheed Martin is double checking its lines of credit so it doesn't have a short term cash crunch.

  29. Lago says:

    "..we would go into a hyper-inflationary cycle much like the Wiemar Republic, or present-day Zimbabwe."

    But isn't this exactly what's happening anyway?

    Not that we actually have hyper-inflation right now, our money still has value. But we have more inflation than is healthy, and bear in mind we're talking about defaulting on a tiny amount of debt. I understand our credit would plummet, but is that really the worst of it?

    Everyone seems to agree that a default would be catastrophic, and I'm certainly not advocating that we just let our debt default, I'm just not seeing how this scenario plays out any worse than it is right now.

  30. Lago says:


    I'm not convinced that raising the debt ceiling another fraction of an inch would have so much impact.

  31. Lago says:

    "The other half of the default, of course, is that the people who hold U.S. Treasury securities suddenly discover that, rather than the extremely stable and reliable investments they thought they have, they have pieces of paper."

    I'm sympathetic.

  32. Jeff says:

    Lago, I'm not sure why you think we have more inflation then is healthy unless you disagree with what the general economic consensus of healthy is.

  33. GP says:

    Californium would only be a short-term solution as it has a half-life of only 2.6 years. The coin would deteriorate.

  34. Luke says:

    @James Pollock – Not only that, but in Canadian football the punt can be used as a pass

  35. Lizard says:

    If we default on the debt, China will send Vinnie and Guido to come have a "talk" with us and try to negotiate a mutually satisfactory solution, which will involve the breaking of assorted limbs and a reminder that they know where we live. They won't be named Vinnie and Guido, of course, being Chinese. They'll be named Vinnie and Big Louie.

  36. Grifter says:

    I'm a bit confused (though I do like the quoting of the specific law, since commentators I've listened to seem to drop the "bullion" part when talking about it). How does "Proof: a specially produced coin made from highly polished planchets and dies and often struck more than once to accent the design. Proof coins receive the highest quality strike possible and can be distinguished by their sharpness of detail and brilliant, mirror-like surface" indicate that it is an enhanced bullion coin?

  37. Don says:

    "Deep thinkers have floated the idea of minting a trillion dollar coin for deposit into the United States treasury to cure the nation's deficit" is not an accurate statement. This coin nonsense is a mechanism for dealing with the DEBT CEILING, which has no more to do with deficits than the stamp on your payment to your credit card company has to do with what you owe them.

    The debt ceiling relates to making payments that the government has already committed to, both spending and interest on debt. All that money already got allocated in the budget process (even if the budget process at times was just allowing the old budget to carry forward unchanged because nobody could agree on a new one). Talking about it as if it represents a decision to create new spending is a massive inaccuracy.

  38. Archer says:

    Ken writes in the hope that he will amuse his audience.

    Patrick writes in the hope that his audience will amuse him.

  39. Lizard says:

    So, lemee see if I understand this debt ceiling thingie.

    a)I decide I won't spend more than 20K on a car. That's my debt ceiling.
    b)I go buy a 30K car.
    c)When I've paid 20K on my 30K car, I say, "I'm going to stop making payments now, since I decided I was only going to allow myself to pay 20K for a car."
    d)I wonder why Vinnie and Luigi are getting out the lead pipes and baseball bats.

  40. Lizard says:

    @Archer: I write in the hope I will amuse myself.

  41. cb says:

    "But we have more inflation than is healthy"
    Inflation has been lower in the past few years than the norm for the past few decades

  42. Dan says:

    @CTrees, that's exactly what I thought as soon as this Trilly Coin business came up. The Mint will entrust Warren Buffett to walk the coin across to the Treasury and it will simply never arrive. This all predictably ends with Cuba gaining $1 Trillion, and the whole episode won't really be all that funny.

    Now if only someone would protest and sue an all-you-can-eat fish restaurant in real life, THAT would be funny…

  43. Jim D says:

    princessartemis: Thanks for the suggestion about reading the underlying article. A very good review of the situation.

    So, from the reading, it looks like what they'd have to do is to mint a proof $1 million dollar platinum coin, pass it to Treasury, who pays them, deposits it in the Fed, and then the Mint passes the money back to treasury, and treasury gets additional money from the Fed. Repeat as needed, thousands of times. When the ceiling is lifted, borrow the money, buy the coins back from the Fed, and melt them.

    This also has the advantage of a million dollar coin not sounding quite so crazy to an average person as a trillion dollar coin. Though they both sound deranged, it's a matter of degree.

    So, a trillion dollar platinum coin wouldn't work, since it would exceed the debt ceiling in one go. But an incremetal program would be… at least arguably legal. When it comes to this particular discussion, I've repeatably read opinions on blogs (by lawyers) that courts try to avoid questions of original intent if possible, when the plain wording of the law is clear. In this case, the plain wording is clear… if certainly unintentional.

    That still leaves open impeachment, of course, which would certainly be on the table if the President tries this.

  44. corporal lint says:

    The trillion dollar coin would make for some obvious and potentially entertaining Dr. Evil scenarios.

    It's possible to transmutate iridium into platinum by bombarding it with neutrons. If we develop a way to do this for minimal cost… Right now iridium costs about 63% of what platinum does, so (ignoring market effects) we'd only need to round up $1.89 trillion worth of iridium. That's progress! Quantum alchemy to the rescue.

  45. mojo says:

    Californium? Half-life 2.6 years?

    Yeah, that'll work. Of course, it'd have to be in a lead-lined vault, due to the savage radiation such short half-life elements produce, but it would be self-depreciating as it turns into… whatever Californium turns into.

  46. mojo says:

    Or you could, you know, put a one-pound Platinum coin in a really, really strong gravity field, where it would weigh 30 million pounds…

  47. Howard says:

    You know, if the minted a 1 Million dollar coin, weighing only 17 tons, made them to order, some idiotic rich people would actually buy the darn things just to have such a display of conspicuous wealth.

    It's not 16 trillion, but a million here and a million there can add up to some real money.

    And since it is sold, it is usable money, not just raising the debt ceiling.

  48. James Pollock says:

    Howard, the most expensive coin in the coin collecting market is the 1933 Double Eagle, which last sold at auction for about $8 million. But part of the reason for that is the fact that there is exactly one of them in circulation (some others exist that were not lawfully obtained, and the Treasury confiscates those when discovered). The entire run of 1933 Double Eagles was ordered destroyed prior to circulation except for 1, which had been given as a gift by the United States.

    So, you might be able to get $1 million out of a rabid enough collector, but only if you limit the production run to 1, and while I wouldn't mind having a spare million and I bet you wouldn't either, compared to the the volume of money that passes through the federal government, it's like the change in the couch. We're over-spending each year at a rate measured in trillions, and there are a million millions in a trillion.

  49. Bill Owens says:

    Two things: some people already make 'coins' out of various unusual elements – almost all of them, in fact: Being a geek, I very badly want their entire set, despite it having no purpose whatsoever except to be geeky. And there are a number of isotopes of Californium, only one of which has a short half-life: It's a good thing that so little of it exists, because it's rather nasty. A much more common transuranic, Americium-241, would only require about 1.5 million pounds, but that's still far more than exists. I think platinum is really the best choice.

  50. Colin says:

    A 3pound Californium coin… Californium is a very strong neutron emitter… And we'd need 16 of them.

    Well, better store them in different rooms, since Californium has a critical mass of about 5kg. Wouldn't want the coins to, you know, level the city or anything.

    Then there's the transportation issue… Have a look at what is required to transport 1-gram of the stuff, it is simultaneously comical and horrific…

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