What Would You Do With a Trillion Dollar Coin?
I am going to preface this blog by saying that I know relatively nothing about American economics.
I was the kid who always asked, “Why can’t they just print more money?” in history class (and I still only quasi-understand the answer to that question- it has something to do with inflation, right?). It’s hard for me during election season because while I’m over here yelling, “Marriage equality! Reproductive rights!”- everybody else is yelling, “Economics!” I‘ve tried to understand it, I have- but there’s so much to learn and no easy way to learn it. My youth and naivete is revealed when I can’t explain what my opinions are on the debt ceiling- or even what the debt ceiling is, other than what I know from the fancy little US Debt Clock web gizmo.
Even so, I’m drawn to things that are a little bit absurd, and money? Pretty strange concept, when you think about it.
According to the internet (and we all know they can’t lie on the internet), only 8% of the world’s currency exists as physical cash- the rest is electronic.
Which is pretty terrifying to me. Who knows what could happen with all that money one day?
Apparently, there are loopholes when it comes to economics as well. The Washington Post says,
Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.
Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue.
This incredibly odd proposal, known as the ‘Trillion Dollar Coin’ idea, has been gaining a lot of attention recently (if you google ‘trillion dollar coin’, a number of articles will pop up- some of them legitimate, some of them biased in one way or another). Like I said before- I know next to nothing about economics. And to someone who knows next to nothing about economics, the idea sounds absurd- not necessarily in a good or bad way, just incredibly absurd. It is, essentially, making money out of nothing, isn’t it?
I don’t know what the political, social, or economic consequences for this would be. I don’t even know how seriously it’s being considered- it’s gained attention, but a part of me very sincerely doubts that anything will come of it. I think it’s being used more as a way to call attention to a very serious problem involving the U.S. government- and I guess it’s worked, if it’s gotten even my attention.
Then again, I’m not the economics expert here. Perhaps you are! Consider this your news blog for the week- I’ll provide you with the information, would you like to try making sense of it? Leave a comment; I would love to hear what you have to say.
The point is this- if you think we aren’t living in a dystopian society, you’re probably wrong.