![]() ![]() He writes that minting a trillion-dollar coin could be “a public teaching moment.” To the extent that minting the coin would shake the popular belief that government spending must be funded with taxes or borrowing, rather than issuance of new money, that would be a good thing, Grey argues in his article. currency will cease to enjoy wide acceptability” if a trillion-dollar coin is minted. (This is an argument of modern monetary theory.) Because taxes will always be with us, Grey writes, “there is little cause to worry that U.S. Money has value, he says, because the government promises to accept it as payment of taxes and other obligations. Grey, in contrast, argues that money is not just a confidence game whose value depends on an “infinite regress” of people trusting other people to trust it. If the delusion starts to fall apart, then there are very real, very negative effects.”Īfter citing a joke about the trillion-dollar coin made by the comedian Jon Stewart in 2013, Buchanan wrote, “It is no laughing matter to expose the fundamentally unreal nature of money to public ridicule.” This group delusion allows us to say that money is money. We accept currency or precious metals - which have no inherent use-value for everyday purposes - because we think that other people will accept them in turn. ![]() ![]() He continued: “A monetary system simply cannot work if people do not collectively take a leap of faith. Buchanan wrote in a blog post in 2013 that issuing a trillion-dollar coin would be tantamount to “pulling back the curtain on the entirely ephemeral nature of money and finance itself.” Grey cites Neil Buchanan, an opponent of minting the coin who is an economist and law professor at the University of Florida’s Levin College of Law. The two sides of the debate are ably laid out in a Kentucky Law Journal article, published last year, by Rohan Grey, now an assistant professor at Willamette University College of Law, who is an adherent of a deficit-friendly school of thought known as modern monetary theory. The would-be coin minters seem to have more faith in the reality of money than their opponents do. In fact, it’s frequently pretty much the opposite. You might think that the people backing this merry bit of gimmickry would be the ones casting doubt on the reality of concepts like “money” and “debt,” while opponents would be soberly testifying to the granite-like substance of those entities. Here’s what I find interesting about the debate, which has been raging since at least 2011, when the idea was broached by a lawyer in Atlanta named Carlos Mucha: This month my Opinion colleague Paul Krugman, a Nobel laureate in economics, wrote, “Gimmickry in the defense of sanity - and, in an important sense, democracy - is no vice.” Mint to perform a function for which it was never intended, but that doesn’t dissuade its backers. Treasury Secretary Janet Yellen said on Tuesday that she wouldn’t consider the idea, calling it a “ gimmick.” She’s right that the trillion-dollar coinage would require using the U.S. Some people think this is an ingenious idea. That would allow it to keep paying the bills and interest on the national debt - thus escaping default - without busting through the congressionally imposed debt ceiling. The Treasury Department would then deposit that coin in its account at the Federal Reserve, giving itself $1 trillion to spend. government is once again at risk of defaulting on its debts because of an impasse over raising the debt ceiling, we’re back to arguing over whether minting a trillion-dollar platinum coin could save the day.įor readers unfamiliar with this odd gambit: The idea is for the Treasury Department to direct the United States Mint to stamp a special coin made of platinum with a face value of $1 trillion. ![]()
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