Debt Ceiling

The Hidden History of the Trillion Dollar Coin

Friday A/V Club: In 1992, it was a paramilitary America Firster who wanted to #MintTheCoin.

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As the latest showdown over raising the country's debt limit comes to a close, and as Washington gears up to repeat the fight in December, we're hearing another round of calls for that charmingly cranky idea, the trillion-dollar coin. If the government doesn't have enough money to meet its obligations, the argument goes, it can simply mint a platinum coin worth $1 trillion or more. While the law limits how many gold, silver, or copper coins are in circulation, Congress passed legislation in the mid-1990s that appears to give the Treasury a much freer hand when issuing coins made of platinum. The bill in question was only supposed to cover commemorative coins, but its actual language isn't so narrow, and so the forces gathered under the #MintTheCoin hashtag believe that they've found a loophole.

This idea has been sloshing around liberal circles for about a decade, going back to the debt-ceiling fights of the Tea Party era. But the concept is older than that. It's even older than "The Trouble With Trillions," the 1998 Simpsons classic in which the U.S. government prints a trillion-dollar bill, Mr. Burns steals it, and he and Homer flee to start a newer, freer country. (They end up in Cuba.) In fact, it's been around longer than that commemorative coin bill. It goes back at least as far as 1992, when Lt. Col. James "Bo" Gritz—forefather of the militia movement, self-proclaimed "real-life Rambo," and presidential candidate of the America First Coalition—promoted a strikingly similar idea on the campaign trail, alongside his promises to rescue POWs from Vietnam, withdraw from the United Nations, and prohibit foreign ownership of American land.

Here he is laying out the plan in San Diego, on September 14, 1992:

If you can't watch the video, here's the key quote, from the 1:47 mark: "As president of the United States, I am going to have, on the very first day in office, a pot metal coin, and it is going to be struck, and it will say 'Four Trillion Dollars,' and it will say 'Debt of the United States Paid in Full.'" Then the crowd laughs and cheers.

Need to pay off some debt? Let James "Bo" Gritz help you!Gritz didn't win the '92 election, but he did do best by one minor metric: When my old boss Bill Bradford took a motorcycle trip through Idaho that year, he told me afterward that he had seen more campaign signs for Gritz than for any other candidate. The man wound up getting 10,281 votes in Idaho, which isn't bad by third-party standards—not enough to carry the state, or even to come close, but you can see how it could translate into a lot of yard signs. In Franklin County, where Ross Perot's total pushed Bill Clinton into third place, Gritz came within 23 votes of knocking him down to fourth. That probably says more about Clinton's local popularity than Gritz's, but I guess the colonel can claim it as a moral victory.

The Treasury doesn't seem likely to mint any trillion-dollar coins this year. But if it does—and hey, we live in weird times—then Gritz can call that a victory too. No doubt he'd be even happier if the government adopted the rest of his monetary agenda, by supplanting America's Federal Reserve notes with an interest-free "constitutional currency," but the times aren't that weird. Not yet.

(For more about Gritz, read chapter 10 of my book The United States of Paranoia, available here. To see more of his San Diego speech, go here. For past editions of the Friday A/V Club, go here.)

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  1. If the government doesn’t have enough money to meet its obligations, the argument goes, it can simply mint a platinum coin worth $1 trillion or more.

    I would pay (less than a $1T) to see, say, Janet Yellen try to explain this to a group of schoolchildren.

    1. Were you thinking something along the lines of this?

      Those mean, nasty, lying, Insurrectionist Republicans that like to kick puppies are holding grandma hostage, so the government is stepping in to save the day by minting this cool, shiny new coin!

      1. “Miss Janet, why not mint a *quadrillion* dollar coin and make a profit?”

        1. …hey kid, you want a job working for the Fed? We can start you tomorrow

          1. Someone who believes in profits working at the Fed?
            Only after a few years in the reeducation camp in Wyoming first.

  2. The trillion $ coin is also an interesting (if not necessarily wise) way of instituting the biblical year of Jubilee. Could be done every 50 years – or every two generations – as a way of eliminating intergenerational debt slavery.

    1. There is no such thing as intergenerational debt in the US. The dad dies the son does not inherit the debt. The estate may be lost but the son is not saddled by the debt.

      Also, just minting a coin is bullshit. It means nothing if the coin itself doesn’t have the value that’s stamped on it. It’s just a metallic piece of paper. It’s an inflationary accounting fiction at best.

      1. Except for the inter-generational debt of slavery. Anybody close to white will owe reparations to anyone with a tinge of color forever.

      2. There is no such thing as intergenerational debt in the US.

        Intergenerational debt is currently $28.852 trillion and spinning fast – or $86,692 placed on every newborn – with more added onto the young every time someone older dies.

        Also, just minting a coin is bullshit. It means nothing if the coin itself doesn’t have the value that’s stamped on it.

        It would have the value minted on its face. $1 trillion. Like all coins, that face value is composed of the costs of minting and the seigniorage. In practice, this would be a de facto debt default. Which means one of two things would happen.

        If government continued to splurge and spend, then true hyperinflation would hit. The dollar would become worthless overnight as currency and other things would circulate instead.

        If that jubilee was seen as a way to resolve the intergenerational debt load and distortions (entitlement spending, global empire building, subsidized interest rates), then it is likely there would be a year of living within our actual means and then, roughly, a restart without the debt or distortions.

    2. Anyone can declare a jubilee for themselves any time they like; it’s called “filing for bankruptcy”.

    3. You may want to reconsider that. It would mean an automatic reduction of productivity in the economy by 1/7th (around 13 percent,) followed by deterioration in the capital during the year of Jubilee, meaning even less productivity. Small wonder the ancient world was so piss-poor. If you hate Socialism, you’ll really hate Jubilee.

  3. I remember when Reagan doubled/tripled the national debt from $1T, how much it pissed me off. Here this guy was talking about $4T. Today we’ve got close to $30T. The cynic in me expects $50T by 2030, and wonders how much higher it will really be.

    1. Reagan is why I joined the LP. I was his ardent supporter in his first election, but I was only 17 and couldn’t vote. I did vote for him in his second term, but before he was out of office I had registered LP.

  4. Trillion dollar coin aka The Bernie.

    1. The Bern that keeps on burning.

      1. Stash them away in a secret Swiss bank in Bern.

    2. Will the size of the coin reflect its intrinsic value? Cuz that would make it very big.

  5. Bo Gritz: Hero, Patriot, and wholly ignorant of monetary policy. This is why we don’t military meatheads in office. We don’t want reality TV stars in office either, or sleepy cornpops in office, or lawyers or billionaires. We don’t actually want anyone in office. Time to roll back government a century.

  6. “This idea has been sloshing around liberal circles for about a decade, going back to the debt-ceiling fights of the Tea Party era.”

    Look, anyone on the left has at least some innate suspicion of money, and the concept that people should have to somehow pay for the things they want. I suspect the trillion dollar coin appeals to them since it not only cancels debt (another favorite progressive/socialist meme) but upsets the basic concept of money.

  7. that Simpsons is a top-five.

    “Does this make me look fat?”
    “No, it makes you look like a tool of government oppression.”
    “But not fat?”

  8. The concept of conservation of mass and energy and its implications for economics seem to be beyond the understanding for reasons of either willfulness or simple lack of intelligence.

    You can not get something for nothing, someone always has to pay the bill.

    Maybe we need to be assigning “Time Enough for Love” as a freshman high school text. Enough adventure, sex and violence to keep the reader happy, but buried in the story is a wonderful short explanation of the basics of what money really is: a bookkeeping system. Any attempt to debase money is nothing more than dishonest bookkeeping, a cheat.

    1. Jeeze we need a proofread tool!

      “…beyond the understanding of many for reasons…”

  9. Can we at least have mandatory public reporting for any account with more than one trillion dollars in inflows or outflows during the year? It would not be difficult to implement.

    1. What’s magic about your number?

      We’re about to get what you want on transactions of $600 or more. Do you think your Bolivars will escape vigilance?

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