Could we see a trillion dollar coin?
While it has to date gained less than a thousand signatures, a formal petition has been submitted to the White House urging President Barack Obama to authorise the minting of a trillion dollar coin in an effort to solve a bitter debate over its legal debt limit.
Although well shy of the 25,000 required for an official response from the government - the petition nonetheless outlines a way of resolving the row between Congress and the White House over the US debt ceiling.
The petition's supporters argue that commanding the Treasury to mint a $1 trillion coin would allow it to deposit that amount with the Federal Reserve, which could then put an equivalent amount of cash into the economy without the Treasury having to issue debt against it and slipping back into recession.
It all goes back to a piece of US legislation under “Denominations, Specification, and Design of Coins.” The opening subsections consists of specifications of the coins the United States issues. However a subsection (k) says “The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
Obviously a $1 trillion coin isn't what Congress meant when it passed the law. Former Republican Mike Castle, who in 1995 was responsible for drafting the legislation, says the objective was to make it easier for the government to earn money selling novelty coins to collectors.
Several problems, however, prevent the unlikely scenario from ever happening, not least of which would be the inherent damage such money creation would do to the value of the US dollar.