The political leaders in the U.S. have been expressing their concerns pertaining to a looming debt crisis and increasing the debt ceiling. They indicate there’s a potential of a possible default risk, as well. So, various U.S. bureaucrats are in favour of minting a US$1 trillion platinum coin to drastically augment the treasury with the fiat currency cash. Former U.S. Mint Director opines minting a Platinum Coin is a matter of only a couple of hours.
But, the Treasury Secretary Janet Yellen states the following to CNBC in regards to minting a US$1 trillion platinum coin:
A platinum coin, “is really a gimmick.”
Yellen is not supportive of the trillion-dollar coin. She thinks it can jeopardize the independence of the Federal Reserve.
The US$1 trillion platinum coin is essentially proposed to be issued by the U.S. Treasury, for depositing at the U.S. Federal Reserve. The U.S. Government can then avail the required funding from the U.S. Federal Reserve to fund its social programmes (liabilities unaffected). The objective here would be to prevent the U.S. Government from hurting the established debt ceiling.
The U.S. is poised to miss its debt ceiling’s (outstanding debt) legally permissible limit come October 18, 2021. While the Senate Republicans are said to have agreed with allowing an extension until December (2021), #MintTheCoin still remains a consideration.
Financial journalist Joe Weisenthal and acclaimed economist Paul Krugman support the idea of minting a US$1 trillion platinum coin.