The Trillion Dollar Coin


Some liberals are throwing around a novel — to put it mildly — idea.  Confronting the frustrating (to them) possibility that House Republicans will use the upcoming debt ceiling increase to leverage some cuts in spending, they have wracked their feverish brains and believe they have found a way around the Republicans.  The Obama administration, they say, can exploit a loophole in federal law that permits the Treasury to mint commemorative platinum coins in “any denomination.”  Thus, if the House won’t raise the debt ceiling — or, if it asks for any policy concessions in return to raising the debt ceiling — the President can — presto chango! — create, say, a trillion dollar coin, deposit it in the Treasury, and thus run the government without having to borrow more money.

Paul Krugman of the New York Times assures us that this could be done without any ill effects to the economy.  I’ll leave that question to those who know more about economics than I do, but Krugman and company’s blithe willingness to create a trillion dollars out of thin air can’t but also summon one or two questions into existence in the minds of thinking people.  If this is such a hot idea, why not mint a 16 trillion dollar coin, dedicate it to a special fund, and start paying down the entire debt right now?  Or, since folks like Krugman favor policies of “stimulus” and think we should have had a much bigger one in 2009, why not mint a multi-trillion dollar coin and pay the money out to American citizens?  The latter presumably could not be done without Congress’s cooperation, because you would need an appropriation in order to authorize the spending.  But if the trillion-dollar coin is such a great idea maybe Congress could be enticed to go along.  It’s the perfect solution: Republicans don’t want to hike taxes, and Democrats don’t want to cut spending.  This solves everything!

Leaving all that aside, what interests me about this is the self-serving liberal narrative that leads to such outlandish proposals being taken seriously by once respectable people.  That narrative admits that the trillion dollar coin is indeed an extreme measure, but suggests that it is justified by the Republicans’ supposed “terrorism” or “blackmail” in relation to the debt ceiling.  And what is this supposed blackmail?  This: that the Republicans are in fact willing to raise the debt ceiling, and in fact admit that it must be done, but they want to try to get some policy concessions — spending cuts — in return for doing it.  Isn’t this shocking!  The Republicans control one of the branches of the legislative body, and they expect to be able to exert some influence over national policy.  Who do they think they are?

Pardon the sarcasm, but it really does seem that many liberal commentators, and liberals in government, think that it is an aggravation if the Republicans control part of the government, but an absolute outrage if they try to use their power in the service of the policies they believe in.  Unless you adopt the authoritarian assumption that one party has no purpose but to rubber stamp what the ruling party wants, then this is what politics in a party democracy is like: all sides get to use their legitimate power to accomplish what they think is good, and if possible and necessary they work out a compromise — like raising the debt ceiling but also cutting spending.

Of course, the liberal critics might respond that what the Republicans are doing is not legitimate, because the usual legislative process would involve simply raising the debt ceiling with no strings attached.  Just because it has been done that way in the past, however, does not mean that that is the only legitimate way to do it.  A debt ceiling increase has to be approved by all three relevant actors — House, Senate, and President — and it is reasonable for any of them, if they think something serious enough is at stake (like a debt ballooning out of control) to use the occasion to get something done that they think would be good for the country.  In any case, liberals are in no position to complain about procedural innovations after having been cheerleaders of putting a major piece of legislation like the Affordable Care Act into the reconciliation process in order to avoid the normal rules of the Senate — not to mention cheerleading a war fought in Libya without Congressional authorization.

The views expressed here are those of the author, and do not necessarily represent the views of


About Author

Carson Holloway is a political scientist and the author of The Way of Life: John Paul II and the Challenge of Liberal Modernity (Baylor University Press), The Right Darwin? Evolution, Religion, and the Future of Democracy (Spence Publishing), and All Shook Up: Music, Passion and Politics (Spence Publishing), and the editor of a collection of essays entitled Magnanimity and Statesmanship (Lexington Books). His articles have appeared in the Review of Politics, Interpretation: A Journal of Political Philosophy, Perspectives on Political Science, and First Things. He is a regular contributor to the online journal The Public Discourse. Holloway was a 2005-06 William E. Simon Visiting Fellow in Religion and Public Life in the James Madison Program at Princeton University. He received his Ph.D. in political science from Northern Illinois University in 1998.

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