The United States is heading towards an economic crisis, which could be completely avoided by minting a trillion-dollar currency that would solve all its problems, if President Joe Biden’s administration decides to take it seriously.
Treasury Secretary Janet Yellen said the government could run out of money to pay its debts as of June 1, triggering an unprecedented debt-ceiling crisis, and even a short default could cost the country millions of jobs and lead to a recession.
The House Republican Party narrowly passed a bill last week that would tie the massive budget cuts to a one-year increase, which Senate Democrats declared dead as soon as the bill arrived, as President Joe Biden said he would veto the legislation stressing the continuation and insistence on increasing the budget. Some economists see this as time for the option of breaking glass with a trillion-dollar coin.
The coin, which would not need to be larger than a regular coin, and could be made quickly, is part of a potential loophole in the debt ceiling, in which the Treasury could mint platinum coins of any denomination.
A school of thought says Yellen should simply mint a $1 trillion platinum coin and deposit it to pay off the debt until a permanent solution is found.
“At this point, if any of the other solutions work, the so-called more serious solutions, they will be used, but in reality these solutions are considered not strong enough, while the coin is It is the only currency strong enough.
The Biden administration certainly did not accept the use of a trillion-dollar platinum coin to avoid a catastrophic economic downturn. For example, Yellen dismissed the idea once in January, saying that “in no way can it be taken for granted that the Fed would do that, and I think in particular that it is a gimmick.”
She added, “The Federal Reserve is not required to accept it, there is no requirement on the part of the Federal Reserve, it is up to them what they do.”
The first problem with the trillion-dollar currency is that they will have to bypass the special Treasury secretary, said Brian Riedel, a senior fellow and economist at the conservative-leaning Manhattan Institute, noting that there is a high probability that the courts will strike it down, especially since the Federal Reserve may not be willing to accept Trillion dollar coin.
In turn, Rohan Gray said that the currency is a kind of “message symbols”, indicating that it ultimately helps break through the hype, and shows that a simple solution can be the best. He continued, “Yes, a trillion dollar coin is ridiculous, but does Biden not look ridiculous and harm the elderly and harm Medicare more?”
The calls for the currency come as Biden aides consider whether the debt limit itself is constitutional, according to The New York Times.
Even if the currency is not on the table, there may be another way to avoid a default while avoiding the congressional drama.
The Times reported on Tuesday that according to people familiar with the discussions, officials at the White House, Treasury and Justice departments have floated a provision of the Fourteenth Amendment that could concern the debt ceiling without approval from lawmakers.
The provision states that “the validity of the public debt of the United States, permitted by law, including debts incurred for the payment of pensions and emoluments for services, shall not be questioned.”
And some experts suggest that this could mean that a default — and thus the debt ceiling — would be unconstitutional.
In this regard, Brian Riedel says: “Of course, the Biden administration will not only consider these constitutional options, but more importantly, it will make it clear to Republicans that they view these illegal and constitutional options as a threat to undermine the legitimacy of the Republican position.”
Yellen has been critical of the mint’s trajectory, telling ABC she believes it is the job of Congress to raise the debt ceiling.
The White House has warned that if the Republican opposition does not back down from its refusal to raise the public debt ceiling, the United States will witness an economic disaster if it falls into a state of default for a long time.
President Joe Biden’s economic advisors said that if the world’s largest economic power fails to meet its financial obligations on time, and this default is prolonged, the American labor market may lose more than eight million jobs this summer.