The Trillion Dollar Coin: A Practical Guide To Curing America's Deficit

As keen observers of the national conversation know, deep thinkers have floated the idea of minting a trillion dollar coin for deposit into the United States treasury to cure the nation's deficit. This bold plan, endorsed by luminaries including New York Congressman Jerrold Nadler, Nobel laureate economist Paul Krugman, and Kai Ryssdal, host of public radio's award-winning Marketplace program, has the potential to solve America's fiscal crisis overnight, with no partisan bickering and no repercussions for world currency markets.

But can the coin (or sixteen of the coins, to be precise) be struck?

For the answer to this question, we turned to legal, numismatic, and political experts. Their answers were discouraging. Fortunately, as we'll explain, American know-how will find a way. Yes, it would be legal to strike the trillion dollar coin. Yes, it would be practical to strike the trillion dollar coin. And Yes!, an end to America's fiscal nightmare is in sight.

Background: The Politics of the Trillion Dollar Coin.

We first turned to Tom Maguire, the author of Just One Minute!, a leading journal of libertarian and conservative thought, to understand why our nation's leaders can't come together to embrace an idea so simple, so obviously right, as the Trillion Dollar Coin. And it became clear that the problem is not lack of goodwill; It's a lack of imagination.

It seems that Maguire, and his ilk on the right, don't object to the Trillion Dollar Coin on grounds of impracticality or sound fiscal policy, but because, they claim, it's against some law.

As Maguire explains it:

the key is the meaning of "bullion coin" in the controversial language of the law:

(k) The Secretary [of the Treasury] 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.

People like Prof. Tribe are focusing on the Treasury Secretary's discretion in setting denominations without worrying that the phrase "bullion coin" might actually have meaning. Here we go, from the US Mint:

A bullion coin is a coin that is valued by its weight in a specific precious metal. Unlike commemorative or numismatic coins valued by limited mintage, rarity, condition and age, bullion coins are purchased by investors seeking a simple and tangible means to own and invest in the gold, silver, and platinum markets.

Well, that is the common, widely understood definition. Do words lose their meaning when Congress puts them in a law? Probably not. And that might be why people who read the law and know what the words mean realize we are talking about one large coin.

With gold, silver and palladium coins Congress specified that the sales price must be the bullion value plus a premium to cover striking and marketing costs. That language was dropped for platinum, leaving the phrase "bullion coin" to carry the meaning. We hope it is up to the challenge!

Well. On one side is Congressional intent (as illustrated by the first draft of the bill), historic practice, and the conventional meaning of the phrase "bullion coin". On the other side is a burning desire to slide past the debt ceiling. Treasury lawyers will never sign off on the sale of this coin; even if they do, Fed lawyers will never sign off on the Fed purchase.

And lest anyone hope to hang their Trillion Dollar hat on the phrase "proof coin", that won't work either – a 'proof coin' in this context is an enhanced version of the bullion coin. From the Mint glossary:

Proof: a specially produced coin made from highly polished planchets and dies and often struck more than once to accent the design. Proof coins receive the highest quality strike possible and can be distinguished by their sharpness of detail and brilliant, mirror-like surface.

My suggestion is that Prof. Tribe ask one of his students to take ten minutes to study this. Then we will get an answer that reflects the language used in the law.

And so, by Maguire's telling, we're stuck.  Because Maguire, and his sort on the right, say it would be illegal for the Treasury to authorize striking the Trillion Dollar Coin unless he could scrounge up a trillion dollars worth of platinum!


Well, why not mine a whole bunch of platinum and mill a coin out of it, you ask? We turned to experts on the subject of astro-numismatics and high-chemistry physics for opinions on the practicality of mining the platinum, and their answers were discouraging. Apparently platinum, while valuable, isn't worth a trillion dollars. Or it is, but you'd need a lot of platinum. "A metric ass-ton," as one expert put it.

We calculated the weight of this "metric ass-ton" in normal people's numbers, and it turns out you'd need somewhere between thirty and forty million pounds of platinum to mint the Trillion Dollar Coin. It would be a coin the size of an Empire State Building. It would take an army to move such a thing.

Background: The Astro-Chemistry of the Trillion Dollar Coin.

Apparently platinum is not the most expensive substance in the galaxy. As it turns out, there are lots and lots of elements and particles more valuable than platinum. So we turned to The Internet for authoritative answers.


That's right. It only takes three pounds of Californium 252 to make a trillion dollars. So just dig three pounds of ore at a Californium mine, and Wingnut objections to the size and weight of the coin are swept aside.

Or so we thought.

Background: The Law of the Trillion Dollar Coin.

It turns out that the mint can't make a coin out of Californium 252. Not because of any scarcity or physical difficulty, but because dollars are made out of gold, silver, copper, platinum, and paper.

Hard to believe, isn't it?

We turned to Jonathan Adler, director of the Center for Business Law and Regulation at Case Western Reserve University School of Law, to ask him whether there would be any legal hassles in minting a coin out of Californium 252.  And we were shocked by his answer:

Proponents of the [Trillion Dollar Coin made of Californium 252] point to the following language in the U.S. Code:

The Secretary may mint and issue bullion 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.

This statutory text plainly authorizes the treasury Secretary to have platinum coins issued in any amount or denomination he wishes so that settles the matter, right? Not really … [T]he relevant statutory language comes from the Commemorative Coin Authorization and Reform Act of 1995, which exclusively concerned the issuance and marketing of commemorative coins. This original proposal was not adopted, but it was incorporated into a later law, retaining the same exclusive focus on the issuance of commemorative coins, and then subsequently amended by …

[Blah, blah, blah, blah, blah.]

the relevant statutes and bill language always concerned the issuance of commemorative coins, and did not implicate the money supply. So while the statutory interpretation offered by platinum coin ploy proponents is superficially plausible, it is not an easy fit with the actual statute from which the relevant provision was born.

For this reason, I am quite skeptical that the platinum coin ploy would be legal.

So there you have it. The Trillion Dollar coin has to be made of platinum, and platinum only. And you can't take an ounce of platinum and call it a trillion dollars. It has to be thirty million pounds of platinum.

How would Uncle Sam carry a thirty million pound coin to the bank?

Yap Stone money

With a little help from his friends down south, that's how.

The Trillion Dollar Coin: We Get By With A Little Help From Our Friends.

On reading the analyses of Maguire and Adler, and the experts they consulted, we despaired. They quoted laws and statutes and texts.

Then we decided, maybe we can read laws and statutes and texts too. So we picked up a statute text, and after accidentally dropping it, found the solution.

Those eggheads hadn't read the whole book!

It turns out that 31 U.S.C. 5112 isn't the only "law" dealing with coins. Why, just one page ahead in the book, we found 31 U.S.C. 5111, which states:

The Secretary of the Treasury—
(1) shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States;
(2) may prepare national medal dies and strike national and other medals if it does not interfere with regular minting operations but may not prepare private medal dies;
(3) may prepare and distribute numismatic items; and
(4) may mint coins for a foreign country if the minting does not interfere with regular minting operations, and shall prescribe a charge for minting the foreign coins equal to the cost of the minting (including labor, materials, and the use of machinery).

So even if American law requires that the Trillion Dollar Coin be made of platinum, and weigh 30 million pounds, America isn't the only country in the world. We could mint the Trillion Dollar Coin for a foreign country that doesn't have silly laws, doesn't mind a coin made out of Californium 252, and would be willing to give it back to us in exchange for something other than a trillion dollars. Something cheap. A friendly country, populated by rich suckers friendly people willing to help a neighbor in need.

Where would we find such a people? At first we thought about China, but they'd probably want their trillion dollars back, and even if they didn't, they could use a coin made of pure Californium as a nuclear weapon. For that reason, our friends in Russia and Saudi Arabia are probably out too.

What about Mexico? They've got a trillion dollars, they're friendly, and they're not likely to have a  violent revolution any time…

And then it hit us: Texas.

Texas is friendly to American interests. Texas has a lot of money. Texas has a balanced budget. And we have something that Texas wants.

Texas_republic_sealAll that we have to do to mint a Trillion Dollar Coin (well, sixteen of them) and solve America's deficit is to mine 48 pounds of Californium 252, and sell it to Texas in return for Texan independence. No laws would have to be changed. Everyone would be happy. And it would cost us nothing.

Everybody wins.

Last 5 posts by Patrick Non-White


  1. Tarrou says

    I approve this message. Also, I'd like to propose selling my own state, Michigan, back to Canada.

  2. Ancel De Lambert says

    Nothing up this sleeve, nothing up this sleeve, nothing in you bank account! Thank you, thank you, I'll be here all night. I'll be here all day, and all year, and all decade and the three after that. I'm the two party system, that's my time, good night!

  3. Lago says

    A 1 oz platinum bullion coin is what, 1600 dollars?

    so you have the 1600 dollar platinum coin and make a proof coin that's worth a trillion dollars.

    Bam. Done. Debt crisis solved, Krugman style!

  4. Xenocles says

    So what, if anything, would stop the Fed from ripping up its holdings in US Treasuries and printing money to balance the books

  5. David Schwartz says

    As I understand it, there's another huge problem. Under existing precedent, if you steal coins from the mint, they are not legal tender but ordinary stolen property. Under US law, a coin doesn't actually become legal tender until the mint has sold it at face value. So if Treasury minted a trillion dollar platinum coin, it couldn't deposit it with the Fed until it first sold it for a trillion dollars. (See Langbord v. Dept. of Treasury)

  6. Andrew K says

    I'm a little upset that you didn't think of us Canadians. We are friendly enough and we seem to love turning everything into a coin. What's one more jingling around in our pockets.

  7. says

    I excluded Canada because I have a jug of your so-called coins, sitting in a closet. They're worthless. You can't put them into a vending machine, and they refuse to accept them at the bank.

    I sincerely doubt you people could afford the Trillion Dollar Coin. You can't even buy a Coke with Canadian money.

  8. CTrees says

    The most perplexing thing about this, to me, is how none of the stories I've read have pointed out that The Simpsons already did this. In 1998! It didn't end well.

    When our government literally reenacts cartoon plots, something is deeply, deeply wrong.

  9. Xenocles says

    I'm actually a big fan of your Canadian silver coins. Extra pure silver and a high face value.

  10. John David Galt says

    Even Zimbabwe has managed to print trillion-dollar bills. And we all know Krugman wants us to follow exactly in their footsteps.

    How about we just deport him there instead?

  11. Xenocles says

    Ooh, this could be the next season of 24 or something. Terrorists steal the shipment of Californium, giving them enough material for a doomsday dirty bomb and throwing the economy into chaos!

  12. Lago says


    What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?

  13. Rob says

    So what, if anything, would stop the Fed from ripping up its holdings in US Treasuries and printing money to balance the books

    Nothing, except for the massive amounts of inflation that would occur soon thereafter.

  14. Rob says

    What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?

    Basically, if we default, it will become difficult or impossible for the US government to borrow money in the future. Given that borrowing is the only thing keeping our government running at the moment since the way they spend money would make a drunken sailor blanch, this would be a bad thing. Well, a bad thing if you're not an anarchist, anyway.

    The government would then need to start printing excess money to pay off its debts, at which point we would go into a hyper-inflationary cycle much like the Wiemar Republic, or present-day Zimbabwe.

  15. darius404 says

    For the answer to this question, we turned to legal, numismatic, and political experts. Their answers were discouraging. Fortunately, as we'll explain, American know-how will find a way.

    "And what will make it possible to spend $20 billion of your money to put some clown on the moon? Why, it's good ol' American know-how, that's what!"

  16. Jess says

    Minting a 16 trillion dollar coin is a GREAT idea – after all everyone knows the government can't create money out of thin air – oh wait . . . .

  17. andrews says

    I am surprised that no one considered the obvious problem with the self-stealing trillion dollar coin.

    Half-life of 2.6 years means that in not much more than a decade, 15/16 of the thing is gone. Missing. Probably stolen, let us waterboard the guards responsible for watching this thing or at least those who have not died of cancer.

  18. C. S. P. Schofield says

    What I'm waiting for, with a certain cynical resignation, is the announcement that the IRS is no longer accepting U.S. dollars as payment of U.S. taxes….

  19. Jim D says

    While I loved the article, it's probably wrong, but certainly incomplete. Check out the denomination of the current 1 oz platinum coin. Is it $1000? No, it's $100. I've been told repeatedly that it can be (stupidly) spent as a $100 coin, though I've never found a cite.

    As far as I can tell, the denomination has no connection to the value in current practice. So… Why would it be different if the denomination was larger than the metal value instead of smaller? Is there a legal principle I'm missing? I mean, other than the obvious "original intent", which would seem to hardly be a slam dunk.

    Personally, I'd let Texas go gratis.

  20. princessartemis says

    Jim D, hit Maguire's link for more information on the legal issues involved in a coin being struck with greater face value than the metal it contains. For quarters it's not a problem; for a $1 trillion coin, it's a big one.

  21. Chris says

    Except that you can't mine Californium. You can only make it in a nuclear reactor or particle accelerator. That's why it's so pricey; each atom is individually made by skilled craftsmen.

  22. James Pollock says

    "What would be worse about a default than increasing the debt ceiling / printing a platinum coin anyway? What exactly happens if we default?"

    Rob got half the answer to this, that the U.S. finds it very difficult to borrow money at a reasonable rate (or at all). When some of the Republicans floated the idea that allowing the U.S. to default might be a good idea last year, we got our creditworthiness reduced (for the first time in a VERY long time) and our costs of borrowing went up a little bit.

    The other half of the default, of course, is that the people who hold U.S. Treasury securities suddenly discover that, rather than the extremely stable and reliable investments they thought they have, they have pieces of paper. Remember the little problem we had a few years back when people suddenly discovered that their houses weren't worth as much as they thought? How it made people suddenly stop spending money and hoarding whatever liquid assets they had, instead of spending them on, say, services and durable goods, causing a ripple effect through the entire economy. It would be like that, only bigger. WAY bigger.

    Just like the last time around, there are some Republicans who (plan/hope/intend) to use a threat to hold up extending the debt ceiling to extract concessions from (the Democrats/the President). The trillion-dollar coin is a counter-threat, to blunt the effectiveness of a denial of a raise in the debt ceiling. If the President were to follow that path, it would basically allow the government to float itself a loan, and redeem it later after (the Republicans cave/the Republicans force significant reductions in federal spending).

  23. James Pollock says

    "You can't even buy a Coke with Canadian money.
    Sure you can. In Canada."

    With all due respect, there's way more weirdness. You guys spell a lot of words wrong, and half the time it doesn't even look like English. And although you don't insist on calling soccer "football", you get it all wrong… God did not intend a 55-yard line. And two different teams with the same team name (out of nine total teams)?
    And that's not even counting in the fact that foisted the Beib on us, you bastards.

  24. Basil Forthrightly says

    "What exactly happens if we default?"

    First, failure to raise the debt ceiling does not necessarily entail a default. While the US is spending much more than its taking in and will need to keep borrowing money to make payments, there's no technical reason why the government couldn't pay the debt interest with the money it does have, and stiff some other group instead. Thus, it could avoid "default" in the classic financial sense of failing to pay interest due on debt to a 3rd party.

    Second, if we don't raise the debt ceiling, and we default, the government won't have the cash to make other payments as well. Its not just the debt interest payment that gets suspended. Some portion of Federal payroll, Social Security payments, Federal pension payments, vendor payments (military and medical are the bulk), transfers to the states (Medicaid, highway, research grants) would have to be deferred until the US got the cash to cover it. Mostly, we're talking about all that spending that they haven't been able to agree about cutting; the biggest chunks are military and entitlements. In addition, tax refunds would likely be delayed.

    In other words, if we don't raise the debt ceiling, a large chunk of the US economy stops getting income; just what bills don't get paid is not yet certain, but it would include a LOT of non-interest bills. I'm sure Lockheed Martin is double checking its lines of credit so it doesn't have a short term cash crunch.

  25. Lago says

    "..we would go into a hyper-inflationary cycle much like the Wiemar Republic, or present-day Zimbabwe."

    But isn't this exactly what's happening anyway?

    Not that we actually have hyper-inflation right now, our money still has value. But we have more inflation than is healthy, and bear in mind we're talking about defaulting on a tiny amount of debt. I understand our credit would plummet, but is that really the worst of it?

    Everyone seems to agree that a default would be catastrophic, and I'm certainly not advocating that we just let our debt default, I'm just not seeing how this scenario plays out any worse than it is right now.

  26. Lago says


    I'm not convinced that raising the debt ceiling another fraction of an inch would have so much impact.

  27. Lago says

    "The other half of the default, of course, is that the people who hold U.S. Treasury securities suddenly discover that, rather than the extremely stable and reliable investments they thought they have, they have pieces of paper."

    I'm sympathetic.

  28. GP says

    Californium would only be a short-term solution as it has a half-life of only 2.6 years. The coin would deteriorate.

  29. says

    If we default on the debt, China will send Vinnie and Guido to come have a "talk" with us and try to negotiate a mutually satisfactory solution, which will involve the breaking of assorted limbs and a reminder that they know where we live. They won't be named Vinnie and Guido, of course, being Chinese. They'll be named Vinnie and Big Louie.

  30. Grifter says

    I'm a bit confused (though I do like the quoting of the specific law, since commentators I've listened to seem to drop the "bullion" part when talking about it). How does "Proof: a specially produced coin made from highly polished planchets and dies and often struck more than once to accent the design. Proof coins receive the highest quality strike possible and can be distinguished by their sharpness of detail and brilliant, mirror-like surface" indicate that it is an enhanced bullion coin?

  31. Don says

    "Deep thinkers have floated the idea of minting a trillion dollar coin for deposit into the United States treasury to cure the nation's deficit" is not an accurate statement. This coin nonsense is a mechanism for dealing with the DEBT CEILING, which has no more to do with deficits than the stamp on your payment to your credit card company has to do with what you owe them.

    The debt ceiling relates to making payments that the government has already committed to, both spending and interest on debt. All that money already got allocated in the budget process (even if the budget process at times was just allowing the old budget to carry forward unchanged because nobody could agree on a new one). Talking about it as if it represents a decision to create new spending is a massive inaccuracy.

  32. Archer says

    Ken writes in the hope that he will amuse his audience.

    Patrick writes in the hope that his audience will amuse him.

  33. says

    So, lemee see if I understand this debt ceiling thingie.

    a)I decide I won't spend more than 20K on a car. That's my debt ceiling.
    b)I go buy a 30K car.
    c)When I've paid 20K on my 30K car, I say, "I'm going to stop making payments now, since I decided I was only going to allow myself to pay 20K for a car."
    d)I wonder why Vinnie and Luigi are getting out the lead pipes and baseball bats.

  34. cb says

    "But we have more inflation than is healthy"
    Inflation has been lower in the past few years than the norm for the past few decades

  35. says

    @CTrees, that's exactly what I thought as soon as this Trilly Coin business came up. The Mint will entrust Warren Buffett to walk the coin across to the Treasury and it will simply never arrive. This all predictably ends with Cuba gaining $1 Trillion, and the whole episode won't really be all that funny.

    Now if only someone would protest and sue an all-you-can-eat fish restaurant in real life, THAT would be funny…

  36. Jim D says

    princessartemis: Thanks for the suggestion about reading the underlying article. A very good review of the situation.

    So, from the reading, it looks like what they'd have to do is to mint a proof $1 million dollar platinum coin, pass it to Treasury, who pays them, deposits it in the Fed, and then the Mint passes the money back to treasury, and treasury gets additional money from the Fed. Repeat as needed, thousands of times. When the ceiling is lifted, borrow the money, buy the coins back from the Fed, and melt them.

    This also has the advantage of a million dollar coin not sounding quite so crazy to an average person as a trillion dollar coin. Though they both sound deranged, it's a matter of degree.

    So, a trillion dollar platinum coin wouldn't work, since it would exceed the debt ceiling in one go. But an incremetal program would be… at least arguably legal. When it comes to this particular discussion, I've repeatably read opinions on blogs (by lawyers) that courts try to avoid questions of original intent if possible, when the plain wording of the law is clear. In this case, the plain wording is clear… if certainly unintentional.

    That still leaves open impeachment, of course, which would certainly be on the table if the President tries this.

  37. corporal lint says

    The trillion dollar coin would make for some obvious and potentially entertaining Dr. Evil scenarios.

    It's possible to transmutate iridium into platinum by bombarding it with neutrons. If we develop a way to do this for minimal cost… Right now iridium costs about 63% of what platinum does, so (ignoring market effects) we'd only need to round up $1.89 trillion worth of iridium. That's progress! Quantum alchemy to the rescue.

  38. mojo says

    Californium? Half-life 2.6 years?

    Yeah, that'll work. Of course, it'd have to be in a lead-lined vault, due to the savage radiation such short half-life elements produce, but it would be self-depreciating as it turns into… whatever Californium turns into.

  39. mojo says

    Or you could, you know, put a one-pound Platinum coin in a really, really strong gravity field, where it would weigh 30 million pounds…

  40. Howard says

    You know, if the minted a 1 Million dollar coin, weighing only 17 tons, made them to order, some idiotic rich people would actually buy the darn things just to have such a display of conspicuous wealth.

    It's not 16 trillion, but a million here and a million there can add up to some real money.

    And since it is sold, it is usable money, not just raising the debt ceiling.

  41. James Pollock says

    Howard, the most expensive coin in the coin collecting market is the 1933 Double Eagle, which last sold at auction for about $8 million. But part of the reason for that is the fact that there is exactly one of them in circulation (some others exist that were not lawfully obtained, and the Treasury confiscates those when discovered). The entire run of 1933 Double Eagles was ordered destroyed prior to circulation except for 1, which had been given as a gift by the United States.

    So, you might be able to get $1 million out of a rabid enough collector, but only if you limit the production run to 1, and while I wouldn't mind having a spare million and I bet you wouldn't either, compared to the the volume of money that passes through the federal government, it's like the change in the couch. We're over-spending each year at a rate measured in trillions, and there are a million millions in a trillion.

  42. Bill Owens says

    Two things: some people already make 'coins' out of various unusual elements – almost all of them, in fact: Being a geek, I very badly want their entire set, despite it having no purpose whatsoever except to be geeky. And there are a number of isotopes of Californium, only one of which has a short half-life: It's a good thing that so little of it exists, because it's rather nasty. A much more common transuranic, Americium-241, would only require about 1.5 million pounds, but that's still far more than exists. I think platinum is really the best choice.

  43. Colin says

    A 3pound Californium coin… Californium is a very strong neutron emitter… And we'd need 16 of them.

    Well, better store them in different rooms, since Californium has a critical mass of about 5kg. Wouldn't want the coins to, you know, level the city or anything.

    Then there's the transportation issue… Have a look at what is required to transport 1-gram of the stuff, it is simultaneously comical and horrific…

  44. says

    And then, and then, if you just mint 16 of these bad boys, the debt is paid off. And then if you make three more of them, you can pay off all the bad municipal debt. And then if you mint 80 more or so, then all the medicare future liability is gone. And a few dozen more coins, here and there, we'll be in the black.

    When you're in the black, you can start spending again. To teh moon, baby!

  45. princessartemis says


    It doesn't. A proof coin is a better, nicer version of an existing coin, made for collectors typically. So, in order to make a proof platinum $1 trillion coin, one would need to find another coin to make a proof of (such as a dime, for instance), strike it out of platinum, then convince someone it was worth $1 trillion. Good luck with that.

  46. princessartemis says

    Bill Owens, I just looked that up, and element coins are now safely ensconced in my mind as One Of The Coolest Things Ever.

  47. Erroll-Flynn says

    Echoing @Grifter, I'm very underwhelmed with Maguire's explanation of why a "proof platinum coin" is just another type of "bullion coin" as the statute is constructed. The quoted explanation of what a proof is doesn't establish at all that proof coins are necessarily bullion coins. I would hazard that many proofed coins from a commemorative series are not bullion coins in that the medal contained therein is less than, not equal to, the stated denomination of the coin. My understanding of the noted "luminaries" argument is that the coin would be just this type of proof coin.

  48. Erroll-Flynn says


    I don't think that's right either. Nothing in the definition of proofing stated above limits its application to existing denominations of coins.

  49. Erroll-Flynn says

    Ok one last thing. Maguire also confuses the concepts of the "value" of the "bullion coin" and its value as legal tender. The Sacajawea Dollar, for instance, is denominated at 1615% the value of the materials contained therein. It is however, legally worth one dollar as legal tender. In the platinum coin scheme, the value of the platinum in the coin (the bullion value, or the value a collector would pay if it was a conventional bullion coin) is immaterial.

    The Fed pays $1 for Sacajawea coins, at the above markup. Should the Fed purchase the coin, they would not be purchasing it for the investment bullion value, they would pay face denomination value. This is the exact same seniorage scheme, just authorized by a poorly written statute and with a much more extreme markup. Maguire's puffing about what a bullion coin is completely moot and misses the point, because denomination, under the statute, is not tied to the bullion value at all, and totally up to the discretion of the Secretary.

    I'm just debating the technical legal validity of the platinum coin idea, not it's wisdom or political worth by the way…

  50. SPQR says

    No, Erroll-Flynn, you are the one confused because your example is not a bullion coin. A bullion coin is valued by the value of its composition.

    At any rate, this certainly shows how far into clownhood Krugman has descended and remains.

  51. StrangeOne says

    Why don't we use some RIAA math and have the government confiscate a few of those $8 billion dollar ipods? We could sell them to the treasury and then fly them to the moon or something.

    Seriously isn't all of this just a little too frank admission that our money is completely meaningless? When a trillion dollar coin becomes a serious option we might as well just trade a rock back to the government and call it a couple billion. It's all some desperate sweaty attempt at not facing the fact that this system is in for a spectacular crash unless congress pulls its head out of its ass and cuts spending by some astronomical number. Which they simply won't do. They see the train about to come of the rails but everybody in first class just keeps urging them to push the throttle a little more. Just one more subsidy, one more undeclared war, one more new federal agency. So long as the right people get a cut it doesn't it matter if the end result dooms us all.

  52. Erroll-Flynn says

    I know that the Sacajawea dollar is not a bullion coin. Just an example of how material value and denomination are wildly different, in the direction of the material being worth less than the denomination.

    The statute nowhere prevents the same from being true of bullion coins, as it stupidly left the denomination up to the Secretary.

    The fact that bullion coins are traded by collectors and sold by collectors at bullion value doesn't change that they have a certain stated denomination. If you didn't know what you had you could walk into Wal-Mart and use a bullion coin to purchase something, but you would only get the stated denomination value for it. The bullion value would be worth more than its value as currency. The sale to the Fed would just be like a purchase at Wal-Mart. Defining the coin as a bullion coin doesn't change its value as currency, which again, congress left up to the secretary with no limitation.

  53. Xenocles says


    I might be a little confused, since while the price I've paid for bullion coins was based on the metal spot price, their face value as legal tender was much lower. The face value seems to be arbitrary, actually – is there a requirement that it be less than or equal to the metal's market value?

  54. princessartemis says

    @Erroll-Flynn, The point is, a proof coin can't be made on its own. It has to be a proof of another coin. That coin can be an entirely new series. So in order to get a proof platinum $1 trillion coin without making it a proof of an existing coin, they could always make…lots of regular $1 trillion coins out of ordinary coin materials *then* strike a proof out of platinum :)

  55. Erroll-Flynn says

    Ah that makes more sense.

    The relevant statute (other than the platinum clause) does strictly control what denominations of coins may be made, so under current law there cannot be a conventional trillion dollar coin…

  56. Artanis says

    It strikes me, that if the US government had 16 trillion dollars worth of any material, platinum, californium, or anything else, it would be easier to sell that material for 16 trillion dollars, rather than use some legal gymnastics to mint a coin out of it.

  57. En Passant says

    mojo wrote Jan 11, 2013 @10:11 am:

    Californium? Half-life 2.6 years?

    … but it would be self-depreciating as it turns into… whatever Californium turns into.


    It'll curium what ailsium.

  58. says

    On a serious note, there is a real solution to the debt ceiling. The government owns well over a trillion dollars worth of real property. I am sure the Grand Canyon, all by itself, would fetch a healthy sum (not to mention it is being badly under utilized by the feds).

  59. Lago says

    "Lago, I'm not sure why you think we have more inflation then is healthy unless you disagree with what the general economic consensus of healthy is."

    Hardly the general consensus, but yes I do disagree with the assertion that 3% annual inflation is good…

    @cb: Yes, I know and I mean that as a developing problem, not just during the recession. It becomes harder and harder to live within one's means to the point of being outright impossible.

  60. James Pollock says

    "On a serious note, there is a real solution to the debt ceiling. The government owns well over a trillion dollars worth of real property. I am sure the Grand Canyon, all by itself, would fetch a healthy sum (not to mention it is being badly under utilized by the feds)."

    Alas, you have the same problem there… you'd have a get a bill through the Republican House and the Democratic Senate authorizing the President to sell off the Grand Canyon.

  61. tweell says

    All this time, the solution to the US debt has been sitting on my desk. I'll give my 100 trillion dollar bill to the US Government, and their money problems will be solved!

    Yes, it's Republic of Zimbabwe money, but that shouldn't be a problem. It's legal tender, says so on the bill.

  62. Jess says

    @twell – unfortunately the US Government is already headed down that path. Greshams Law is well in effect and we have debased our currency to the point that we (and other nations) are sitting aroung the poker table and everyone is afraid to "call" – except maybe the Chinese – they have a pretty good hand.

    In overly simplistic economic terms:

    1. Inflation is an increase in the amount of money. When the amount of money goes up the value goes down. When the value goes down, people need more money to purchase the same things. Rising prices are not inflation: they are a result of inflation. A Trillion Dollar coin, while interesting, would only skew the equation but not really solve the underlying problem.

    2. Inflation is ultimately an ethics problem. It is a result of “The Lie” that is popular with voters. The Lie is “I will give you what you want, and you will never need to pay for it: I will force someone else to pay for it.

    3. Inflation causes businesses to make mistakes. When inflation stops, businesses see their mistakes and start making corrections, namely in laying off workers = unemployment goes up = less taxes going to the government.

    4. Once inflation starts up again, corrections stop and workers go back to work = recession.

    5. If the inflation does not start up again, the corrections are completed. Unemployment stays up for a longer time because the workers cannot go back to their old jobs: they must find new ones. That’s a depression.

    6. Inflation causes recessions and depression. The only way to have no recessions or depressions is to never inflate. That will never happen – see point #2 above. Rinse. Lather. Repeat as needed.

    Or what I like to call TANSTAAFL = There Ain’t No Such Thing As A Free Lunch

  63. wgering says

    Three pounds is an outrageous size for a coin. How could anyone think this is practical?

    No, the coins should be made out of the most expensive substance known to man: antimatter! (anti-hydrogen, specifically)

    At roughly sixty-trillion dollars per gram, you could solve the national debt with one measly 250mg coin! Way more practical than Cf-252.

    Although building the anti-mint to make the coin might be difficult…

  64. Jess says

    @wgering – you're forgetting Latinum. Now only if we could find some Feringi to show us how to mine it.

  65. Aufero says

    I think we're all missing a bet here: most of us (well, maybe just me, but since this is the internet I can skip all that messy polling and data and assume my opinion represents EVERYONE) have been reluctant to contribute anything on the convenient federal tax return line that asks for money to pay down the national debt, possibly because we're suspicious that our lawmakers will instead blow the cash on a wild end-of-the-fiscal-year party.

    My proposal is that we replace that line with a request for funds to pay Texas to secede. This would be tremendously popular in the rest of the nation, (possibly also in Texas) and would undoubtedly raise several hundred billion dollars, which we could then use as a lump-sum payment to China to sweeten the deal when we offer them one of our states (Texas) in exchange for forgiveness of our debt.

    (We might have to do some horse trading and offer something of real economic value in addition to Texas – say fifty thousand or so Starbucks outlets? I understand coffee is becoming popular in China, and they might not know the difference between Starbucks and coffee yet.)

  66. Nick says

    I didn't see it addressed; why can't you just print a trillion dollar note?

    Or, whilst looking for substances significantly more valuable than platinum, I wonder how much volume a trillion dollars-worth of printer ink would take up…..

  67. Shane says

    This should liven the this thread up.

    Why does the rest of the country have such a hard on for Texas?

  68. Bear says

    OK, I'm coing to this game a little late. Maybe I missed this in the comments already, but…

    Basic idea: Mint a $1T platinum coin.
    Objection: $1T in platinum makes for one freakin g huge coin.
    Answer: Use another metal.
    Objection 2: By law, coins have to be copper, silvr, gold, or platinum.
    Answer: Mint a bullion round in another metal.

    Why? I mean… you're actually going to worry about the [giggle, snort] law? Have you taken a look at pennies minted since the '82 change? Zinc (melt value of a post '82 penny is only 53.45% of the [more giggles] face value; I know a guy who melts down pennies for the zinc for small parts casting; the token copper cladding just isn't enough to matter).

    Mint a zinc coin. Make it big if you want, to make the suckers feel like it must be valuable. Then clad it in platinum (for the soi disant more discerning suckers), and call it whatever frickin' denomination you want. At least it'll have enough collector value (for those who want to add the last currency coin minted by the US before the Great Razing, Salting, and Backfilling of DC) to exceed the platinum cladding melt value. No new precedent needed; the Treasury has been issuing those zinkies for decades without any noticeable whining (and steel before that).

    Why the hell is anyone raising legal objections to any damned coin coming out of the oh-so-law-abiding idiots in DC?

  69. Aufero says

    @Shane –

    I thought of proposing Florida instead, but I doubt the Chinese are dumb enough to take that deal. (And my state – California – has been too busy committing budgetary and legislative ritual suicide to be a convincing substitute.)

  70. Dreampod says


    California is a nice fixer-upper. Has a great frame and once you strip all those pesky regulations making it a financial hellhole it'll be gorgeous.

    Actually California is probably a 'good' example of how the debt ceiling will be managed if the Republicans attempt economic suicide. In 2009 they issued a couple billion in I.O.U. scrips to individuals and businesses rather than paying them. This would allow the fed to keep making payments on the foreign requirements (who would default them for trying to pass I.O.U.s) and create a large and angry domestic demographic who wants their money to pressure the Republicans.

  71. Joe Pullen says

    Lots of reasons to like Texas. My top 10 – in no particular order

    1. No State Income Tax
    2. NASA (although not so much anymore)
    3. The food: Tex-Mex, BBQ, Blue Bell Ice Cream
    4. ZZ Top and Stevie Ray Vaughn
    5. Hippie Hollow – it isn't as weird or free as it once was, but it's still Hippie Hollow – everyone should get naked there once.
    6. Few states have legislatures that meet less often than Texas -I’d mention 3 of the last 10 Presidents came from Texas so maybe we know how to run a country (then again they may not be the best examples)
    7. Carrying a gun isn’t a right – it’s a way of life
    8. Big Bend, Tyler, Dangerfield, and Cleburne National Parks
    9. Fishing and watching sunsets over the Gulf of Mexico
    10. Did I mention – No State Income Tax

  72. James Pollock says

    Hmmm. I don't find "no state income tax" that great a deal. I prefer no sales tax. As for ZZ Top, I'm pretty sure we can go ahead and give them visas so they can continue to tour.

    Of the four poisonous snakes found in the U.S., 3 are found in Texas.

    Perhaps my perceptions are still colored by the Alamo Bowl, which should have been won by the team not from Texas.

  73. Rob says

    7. Carrying a gun isn’t a right – it’s a way of life

    Unless, of course, you want to do so openly, like you can in the majority of other states; then you're SOL.

    (It's always fun to point out to Texans that they aren't nearly as free as they think they are).

  74. Ralph B says

    Rodney Dangerfield has a park named for him? In Texas? Wait…that doesn't add to the discussion…OK why not have the post office make a commemorative stamp? A $1T stamp? Wouldn't that work?

  75. Joe Pullen says

    There’s always the aspect of balancing which costs more – State Income Tax or Sales Tax. In my case only a few States might even out that equation – New Jersey, New York, Maryland, Connecticut, and just maybe Rhode Island – but then I’d also have to contend with much higher home prices for the same size and quality house in a major airport access city. So Texas, at least in my case, is the financial winner. On the downside it gets pretty darn hot here in the summer.

    @Rob – you do know the list was, in part, poking fun at Texas – right?

  76. Pau Amma says

    Excluding those 16 $1tn coins if/when they're minted, what's the overall US money supply? Considering the half-life of Cf252, a metal standard based on that would have a built-in inflation rate of about 30%. That doesn't sound very good…

  77. Chris says

    @Bear: The law specifies the combination of metals that make pennies, nickels and other coins. For pennies, it specifies zinc–the Treasury isn't putting zinc into copper pennies and calling them copper pennies, it's putting zinc into pennies, as the law requires, and calling them pennies. So you're not citing a precedent for minting a coin nominally in one metal but mostly in another–there's nothing in the law about a copper penny. But there is about platinum coins and things get interesting because the law says the Sec. Treas. can mint "bullion" or "proof" coins and Patrick's analysis is pretty trite (this wasn't proposed as a way to "cure the deficit" but rather to evade a vote on the debt ceiling) but it seems both the Fed and the Treasury, per a Treasury secretary believe that not only shouldn't they mint a one trillion dollar platinum coin but the law doesn't even allow for it.

    Note to earlier commenter: The Fed prints bills, not the Treasury. They seductive appeal of the so-called loophole was this was something the Treasury, a department controlled by the President, could do. Treasury says not they can’t.

    Popehat: You owe me nothing. But unless bumptious legal threats to first amendment rights have somehow disappeared with the New Year, could you please get back to covering them? It's what you're uniquely good at.

  78. Chris says

    Editing my comment–Treasury doesn't believe the loophole is there, per a Treasury *spokesman," not the Secretary.

  79. Liberaltarian says

    Great article, great punchline. This is what I keep coming back here for.

    (Why IS Texas still part of the Union? It seems like letting it secede is one of the few things that leftists and right-wingers would both love to see … though I guess there might be some disagreement from the direction of Austin.)

  80. Jake says

    Here's a great breakdown of Texas into it's 5 states (from the movie "Bernie"). I used to live in the "People's Republic of Austin" but it got to crowded:

  81. says

    (I can't believe I actually came back to look at this post.)

    @ Chris • Jan 14, 2013 @7:29 am:

    Not exactly. 31 USC 5112(b) actually specifies that "Except as provided under subsection (c) of this section, the one-cent coin is an alloy of 95 percent copper and 5 percent zinc."

    31 USC 5112 (c) is where things get interesting: "The Secretary may prescribe the weight and the composition of copper and zinc in the alloy of the one-cent coin that the Secretary decides are appropriate when the Secretary decides that a different weight and alloy of copper and zinc are necessary to ensure an adequate supply of one-cent coins to meet the needs of the United States."

    Short form: "Pennies have to be 95% copper unless they don't."

    Just to a pedantic smart ass, note that the law specifies an alloy, and doesn't describe a sandwich of different alloys (as it does for other coins in other paragraphs), nor does it mention plating/cladding. The zinc penny is plated/clad in a predominately copper alloy which gives it the visual appearance of a copper penny. This suggests that they intended to be deceptive (see: –my shocked face-). So yeah, there's a precedent.

    Other than that, I suspect you missed the point of my post. Amazingly, I guess I wasn't sarcastic enough; that's not something I hear very often.

  82. Nick says

    Sorta surprised by the number of people who've brought up inflation risks in this thread. The coin plan only inflates the currency if the total amount of circulating currency goes up. Since the (notional) plan of the coin involves the Fed putting the money into circulation by buying federal debt. Assuming the Treasury buys the coin back from the Fed at some point, then the only way this ends up being inflationary is if you also thing that selling t-bills is inflationary.

    (That isn't even touching the Keynesian issue that all the evidence points to inflationary policies being a positive rather than a negative at this point in the economic cycle.)

    Also given that current law is flatly contradictory, not to mention mind-bendingly stupid (essentially: Law 1 is "Spend X dollars" and Law 2 is "Only borrow Y dollars, where Revenue + Y < X"), is it really worth worrying about the finer legal nitpicks of whether this loophole requires bullion coins not to utilize seigniorage?

  83. Jess says

    @Nick –

    The coin plan only inflates the currency if the total amount of circulating currency goes up

    Exactly, but I’m not sure I really understand your comment

    “That isn't even touching the Keynesian issue that all the evidence points to inflationary policies being a positive rather than a negative at this point in the economic cycle”

    There may be “short term” positives to inflating in the minds of politicians who by nature think short term, but I don’t see how inflating is a good long term strategy. It would seem that any type of inflation only delays or elongates the resulting “correction” period. If you believe otherwise, I’d be interested in hearing your argument in support of this.

  84. Chris says


    You made my point. You wrote "Objection 2: By law, coins have to be copper, silvr, gold, or platinum."

    Actually no. As you recited when you went back to the law, the penny you talked about can have as much zinc as Sec. Treas. wants. It's not a copper penny under the law, it's a penny. And it's only a penny. Sec. Treas. can't legally mint a mostly zinc coin worth one trillion dollars on fiat.

    So maybe I was being lazy in not providing the passages you point to, and maybe I should recite the passage about platinum and how it's different from one cent pieces, but the Sec. Treas. hasn't been breaking the law with zinc.

  85. James Pollock says

    "There may be “short term” positives to inflating in the minds of politicians who by nature think short term, but I don’t see how inflating is a good long term strategy."

    There's three possibilities… inflation, deflation, or being perfectly balanced between the two. Granted that that last option is the best, it's also really, really hard to balance an entire economy that perfectly. So, considering inflation or deflation, deflation is catastrophic to the long-term health of an economy, because it discourages investment and rewards hoarding. High inflation is hard on people with fixed incomes (pensions, bonds, annuities, and the like), but low inflation causes people to pull their money out of the mattress and invest it in something that will provide a return, which results in expansion of the total pool of goods and services available to consumers.

  86. Charlie says

    There is a misconception in this article—noone is suggesting we mint 16 platinum coins "to make the national debt go away". The idea was to mint _a single coin_ and sell it to the Federal Reserve _to increase the national debt_ to 17+ trillion and provide operating cash to the government. This would allow the government to keep paying the bills on time without waiting for congress and the president to finish their political shootout over the debt ceiling.

  87. AlphaCentauri says

    It suddenly occurred to me. The U.S. owes a large proportion of its debt to the People's Republic of China. The PRC is an enthusiastic supporter of the government of North Korea. North Korea's principle export is counterfeit U.S. bills. Does anyone else see what I see?

  88. corporal lint says

    It suddenly occurred to me. The U.S. owes a large proportion of its debt to the People's Republic of China. The PRC is an enthusiastic supporter of the government of North Korea. North Korea's principle export is counterfeit U.S. bills. Does anyone else see what I see?

    I've been trying to work this out all day, and all I can come up with is a North Korean scheme to lower the value of China's investment in US T-bills. China holds about 8% of US federal debt, so it's not like they would be able to foreclose on the Pentagon because of post-counterfeiting inflation. Hell, high inflation might make the debt easier to deal with, despite whatever larger economic havoc it would cause.

    Japanese pension funds are big holders of US T-bills, and it almost seems likely that the North Koreans have fantasies that their little sideline in counterfeiting will cause the dollar to decline against the yen enough to render these pension funds insolvent, thus causing elderly Japanese to starve as if they were North Koreans.

    I should also point out that the Chinese aren't "enthusiastic" supporters of North Korea. They don't seem to like the North Koreans very much, they just find them useful, and also absolutely do not want a united Korea. China would be much happier with a generic (and more pliant) repressive regime in Pyongyang, rather than the often embarrassing one they're stuck with.

  89. Nick says


    By buying Federal debt the Fed takes a similar amount money out of circulation that the platinum coin puts in circulation, so inflation (should) stay roughly constant. It's completely ridiculous, but then so is the whole premise of the problem.

    On inflation, I'm not suggesting that it's a good long-term strategy, but there's no reason to assume that short-term strategies must (or should) be the same as long term ones. But I'm not sure what you mean by inflation requiring a 'correction period' later on.

    We're in a liquidity trap where there's too much saving by the private sector as market returns suck compared to interest rate returns (interest rates – inflation) to warrant the risk. Normally we get out of this by dropping interest rates until people start investing again, but we can't do that since interest rates are essentially 0. Pushing up inflation is the other lever we can pull, and any downside from higher inflation is almost certain to be offset by growth caused by fuller employment.

    I'm much more worried about short term goals getting in the way of long-term ones when we're in a boom economy, as there's historically that we're really terrible about doing appropriate austerity in good times (we're oddly great about doing inappropriate austerity in bad times though).

  90. says

    On the sales tax vs income tax, as a tax professional, I can say unequivocally that the sales tax is preferable. The mere existence of my occupation is argument enough.

    Sorry the comment is late in the thread, for those who aren't following it's from the top ten things about Texas – 1 and 10 being no income tax.

  91. Brandon says

    I don't understand why everyone is making this so complicated. It should be simple accounting. We spend more on our military than the rest of the world combined. So, we make a journal entry debiting Public Debt for 16 trillion and crediting an income account called Tribute for the same amount. Debt problem solved! If anyone objects, we send them some outreach drones to help them see our point of view. What do you think we've been practicing for the past 10 years?

  92. Careless says

    "9. Fishing and watching sunsets over the Gulf of Mexico"
    I think you've confused Texas with Florida