There is growing concern that the United States will default on its loans and run out of money in the coming weeks, and one unlikely solution is being floated in the financial world.
If the government desperately needed funding while cutting around Congress, President Joe Biden could technically issue a $1 trillion commemorative coin and give it to the Federal Reserve, CNN Business reported.
The idea would be considered an overreach of power, and the White House is denying any talks of issuing such a coin.
“There is only one viable option to deal with the debt limit: Congress needs to increase or suspend it, as it has done approximately 80 times, including three times during the last Administration,” White House spokesperson Mike Gwin told Politico.
Former President Barack Obama admitted to discussing a coin with his treasury secretary during a 2017 interview with Pod Save America.
“We were having these conversations with Jack Lew and others about what options in fact were available, because it had never happened before,” Obama said, according to CNN.
“There were all kinds of wacky ideas about how potentially you could have this massive coin … This theory [was] that I had the authority to just issue this massive trillion dollar coin, a trillion dollar commemorative coin, and then on that basis we could pay off US Treasuries.”
However, experts have warned that resorting to using the trillion-dollar coin could collapse the U.S. dollar. “It is so glitzy and gimmicky, it’s the worst thing you could do,” Philip Wallach, a senior fellow at the American Enterprise Institute, said.
“It’s really designed to capture the imagination of the whole world. At the end of the day, a fiat currency’s stability doesn’t rest on anything other than people’s belief that money is worth what they’ve believed it to be worth. Doing something like the trillion-dollar coin is a great way to get people to think that dollar is not such a great currency.”
Treasury Secretary Janet Yellen is warning that if Congress does not raise the debt ceiling, the U.S. will run out of money on Oct. 18.
“At that point, we expect Treasury would be left with very limited resources that would be depleted quickly,” Yellen wrote in a letter to Congress, according to Reuters.
“It is uncertain whether we could continue to meet all the nation’s commitments after that date,” she continued.
On Wednesday, the Senate is expected to vote on a government funding bill in order to avert a shutdown before the fiscal year ends Thursday.
However, the separate vote to “suspend” the debt limit is expected to fail in the Senate, Barron’s reported.
The debt limit has been raised 74 times since 1962 under both Republican and Democratic administrations, but Republicans are arguing this time around that they should not raise the limit whatsoever.
“It is not our duty to raise the debt limit; it’s our duty not to spend so recklessly, irresponsibly, and egregiously that we bankrupt this country,” Texas Republican Rep. Jodey Arrington tweeted.
It is not our duty to raise the debt limit; it’s our duty not to spend so recklessly, irresponsibly, and egregiously that we bankrupt this country. pic.twitter.com/vIwKkRNBqM
— Rep. Jodey Arrington (@RepArrington) September 29, 2021
The federal government is constantly in survival mode, where something as ridiculous as a $1 trillion coin can solicit a question from the media.
It’s unclear what Congress will agree upon in the coming days, but its consequences are sure to impact all Americans.
This article appeared originally on The Western Journal.