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With the United States debt ceiling recently surpassed, a new, off-the-rails idea has been proposed by democratic lawmakers to raise it: minting a $1 trillion platinum coin. That’s right. A coin, worth $1 trillion. This coin would be minted by the Treasury and then immediately deposited at the Federal Reserve.
Though it may sound like something that couldn’t be done, the Treasury is actually authorized to mint platinum coins in any denomination under 31 U.S.C. §5112(k) (“The Secretary may mint and issue platinum bullion coins . . . in accordance with such . . . denominations . . . as the Secretary, in the Secretary’s discretion, may prescribe from time to time”).
Treasury Secretary, Janet Yellen, shot down this idea, calling it a “gimmick.” Critics have stated that, while it would technically work, it would worsen already staggering inflation and could massively reduce the United States’ reliability as a debtor in the bond markets, causing rising interests rates.