Crazy Or Canny? Talk Grows About $1 Trillion Platinum Coin
AUDIE CORNISH, HOST:
It's ALL THINGS CONSIDERED from NPR News. I'm Audie Cornish.
MELISSA BLOCK, HOST:
And I'm Melissa Block. Could a coin, a trillion dollar platinum coin, avert the next showdown on Capitol Hill? Very soon, the federal government will hit the debt ceiling. Republicans say they won't lift the ceiling unless Democrats agree to significant spending cuts. It's a drama we've watched before. Remember August of 2011? But now, the idea of creating a trillion dollar coin to save the day is gaining some traction.
It sounds fanciful, ridiculous even, but Joe Wiesenthal of the Business Insider website says, why not, and he joins me to talk about it. Hey, Joe.
JOE WIESENTHAL: How are you doing?
BLOCK: How would this trillion dollar coin work as a way around the debt ceiling? The Treasury secretary goes to the U.S. Mint, tells them to make a platinum coin and then what?
WIESENTHAL: Yeah, that's basically it. Tim Geithner mints a trillion dollar coin, tells the mint to, and then delivers it at the Treasury's bank account at the Federal Reserve. The Treasury can then go about continuing to make its payments, even though we haven't actually gone out and borrowed more money.
BLOCK: And the genesis of this authority you're talking about goes back to a law. It had to do with commemorative coins, right, to increase government revenue. This wasn't the idea. This is kind of an adaptation of an existing law?
WIESENTHAL: That's correct. But lawyers who have looked at this, including, you know, top constitutional minds like Laurence Tribe at Harvard Law School have concluded that it's fine.
BLOCK: And just to be clear, there is not one trillion dollars' worth of platinum in this hypothetical coin.
WIESENTHAL: That's right. This is one of the main confusions that people have. Yesterday, the National Republican Campaign Committee slammed the idea and they had this cartoonish version of a monster coin with a trillion dollars' worth of platinum in it sinking the Titanic, which is kind of amusing maybe from a political standpoint, but it's definitely not what the coin would be.
BLOCK: Here's another argument against the platinum coin, that this would be inflationary, the equivalent really of printing money. Why is it not inflationary?
WIESENTHAL: When you hear about the government creating high denomination currencies you obviously think about Zimbabwe and Weimar Germany and these trillion dollar bank notes floating around and destroying the dollar. But here's why it's different. What's usually happening in those countries is a government is running low on money and wants to boost the economy, so they just start pumping a lot of currency right into the economy.
This is not what would be happening here. We wouldn't be increasing our spending levels by any amount. It's just a different way of financing it.
BLOCK: You do hear people saying why not mint $16 trillion in coins, pay off the entire debt? Where does this end?
WIESENTHAL: That gets back to this question of why isn't it inflationary. And so if you start thinking of the coin, if the purpose is to pay off the debt, then you're actually talking about creating coinage so that we can spend a lot more money and that would be inflationary. The purpose of this is not to pay off the debt. It's a legal loophole essentially of debiting on $1 trillion to the Treasury's account at the Fed and then continuing normal spending.
BLOCK: This legal loophole that you're talking about, Joe, is really, in the end, it's a way to do an end run around Congress, right?
WIESENTHAL: Yes, but it's important to recognize what it is an end run around. It's specifically about allowing the government to pay bills which have already been accumulated. The idea of a trillion dollar coin, I think everyone recognizes that it's absurd, but the debt ceiling fight itself is absurd because it's basically a fight about whether we're going to pay our bills.
BLOCK: Joe Wiesenthal, deputy editor of the Business Insider website and a booster of the idea to mint a $1 trillion coin to bypass the fight over the debt ceiling. Joe, thanks so much.
WIESENTHAL: Thank you. Transcript provided by NPR, Copyright NPR.