We’ve heard a lot of buzz lately around the fiscal cliff in the U.S., but the story of our southern neighbour’s growing debt issue has taken an unusual turn.
It’s a story that seems like it’s right out of an episode of Ripley’s Believe it Or Not. Some policy wonks in Washington, D.C., proposed the wacky idea of using the most literal bargaining chip they could think of to pay down America’s debt in one fell swoop: a trillion-dollar coin.
The idea of minting a platinum coin seems like a wild, last-stitch effort to draw attention to the U.S. debt situation. While the Treasury Department does have the authority to ask the Mint to make such a coin, it seems rather wasteful to create a single coin just to help with the debt ceiling. The idea is the coin would be minted, shipped off to the Federal Reserve, which would add $1 trillion to its books to finance government operations. Then, once the debt ceiling is raised, the Fed would send the coin back to the Mint to be melted down and reused.
Some sources are saying the Federal Reserve killed the idea over the weekend, and the Treasury Department also nixed the notion. However, government entities couldn’t kill the idea fast enough to stop it from gaining serious traction on the Internet over the weekend.