Carlos Mucha of Monetary Realism discusses the Trillion Dollar Coin for the New York Times:
“Under the Constitution, Congress is given the authority to create money. Congress has delegated this power to create money to two agencies: the Federal Reserve and the U.S. Mint. For decades, the Fed has issued paper money and assisted the Department of the Treasury in issuing enough new debt to fund the budget deficit.
Meanwhile, the Mint quietly issues circulating coins to banks and numismatic coins to collectors (all U.S. coins are legal tender). One seemingly minor difference is that coins aren’t debt. They’re sold to Federal Reserve banks at face value. Selling Treasury bonds to the public increases the public debt. Selling coinage is an asset sale and pure profit for Treasury after minting costs.
Compared to the trillions in T-bond issuance, the Mint’s output has been, well, chump change. Then in 1996 something remarkable happened. Over the objections of a Democratic administration Republicans in Congress passed a statue, 31 USC 5112(k), permitting the issuance of platinum numismatic coins. The astonishing part was that Congress set no specific denomination, writing perhaps the biggest blank check in history.”
The coin is one of the great ideas. The coin is impossible to forget, and it turns out the coin is impossible to ignore as well. The coin illuminates the idea of fiat money with such arresting force. People who don’t understand money still get it. I had a friend ask me tonight – “How much is too much? How much isn’t enough?” That’s exactly the kinds of questions we want people to ask!
And it’s all your idea, Carlos. 🙂
If you get a chance, go on over to the New York Times and leave a comment.