1 US coins are legal to use
The idea is bizarre. Timothy Geithner, Treasury Secretary of the Obama administration, gives the order that machines from the US Mint rattle. In the end, one of them spits out a single platinum coin. It is locked in a vault in the New York catacombs of the central bank - and America's debt dispute is over in one fell swoop. The government can continue to spend money, the country will not collapse.
The dispute over American public finances is getting a little crazy: At the beginning of the year, politicians and opinion leaders in the United States are seriously discussing the idea of minting a one trillion dollar coin - an insane value reminiscent of kleptocracies like Zimbabwe, where In 2009, 100 trillion Zimbabwean dollars were issued. That meant an inflation rate there of an even more insane 90 trillion percent.
The US is not there yet. But after the Republicans had to accept President Barack Obama's tax increases for the rich they hated in the first few hours of the year, another total standstill looms at the end of February, for which creative solutions are needed. Then the $ 16.4 trillion debt ceiling will have to be raised or Washington's payments to creditors may be in jeopardy, and not just that: Republicans are openly talking about blocking a deal and "temporarily and partially" incapacitating the government. The result would be the so-called government shutdown. This spending freeze would paralyze many government agencies and with them part of life in the country.
The super coin debate revolves around an obscure passage in the law books that Democrats use to undermine the Republicans' blockade. Coins for payment transactions made of zinc, nickel and copper are produced by the mint, which is subordinate to the Ministry of Finance, but the authority cannot commission coins at will. The Federal Reserve "prints" money autonomously from the government by supplying private banks with electronic dollars. So it controls the money supply, the minister is more of an executive body. It just has an impact on the ratio of metals in cents. (More on the relationship between the Fed and the Treasury Department here)
The exception is described in Title 31, Section 5112k of the Federal Law: "The Minister may mint and issue platinum coins" at his own discretion. The passage is actually intended for commemorative coins and collectibles. Oklahoma Republican MP Frank Lucas said when it was passed in Congress in 2000, "It has no cost implications." (PDF) Nevertheless, the paragraph is now suddenly the subject of the currently largest political debate in the country.
The idea was that Geithner could have one or two coins worth a trillion dollars minted on behalf of Obama and deposit them with the central bank. This would allow him to buy back his own debt from the Fed in this amount and thus nullify it. He would not have to take on new liabilities and so tear the debt limit. Greece has only just made room for itself through a debt buyback - with money it borrowed from the EU.
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