I've been reading about this idea to mint a $1 trillion dollar coin as a way to avoid the debt ceiling. I thought it started as a joke. I mean, years ago there was a episode of The Simpsons where Homer Simpson and Montgomery Burns go to Cuba with a trillion dollar bill where Fidal Castro steals it. This idea is so silly it's hardly worth talking about. It's all a big joke. The only thing it's worth is a lot of laughs. The problem is, some people might actually be starting to take this idea seriously. After all, it is the congress, they are constitutionally obligated to mint coins, and if they say a coin is worth a trillion dollars, then by law it's worth a trillion dollars.
Now, to me, this is one of the worst illusions the political elite have ever thought of. It's so easy to see through. Why not just tell the Federal Reserve that we refuse to pay? At least tell them we won't pay the interest on the debt. At least have the interest forgiven. Do you have any idea how many billions that would save? To give you an idea, one percent of 16 trillion is 160 billion. But I digress. This idea is being suggested as an end around to keep from cutting any spending in case the debt ceiling is reached. This has nothing to do with actually trying to find ways to cut spending, with saving money, it has everything to do with cowardly congressmen refusing to face up to their responsibilities to make hard decisions on which government programs to cut back on and/or eliminate.
Yet there's another problem here. It's the joke factor. It's the fact that anyone would take such a prank seriously. But then, I guess we've been collectively taking a prank seriously for, well, about a century. You see, what makes this prank so obvious is everyone knows a coin is not worth a trillion dollars just because someone says it is. Even a platinum coin stamped with a famous person's face on one side and the words $1 trillion on the other side would not fetch $1 trillion dollars on the collector's market. Right now the price for an ounce of platinum is between $1500 and $1600 dollars. A one of a kind stamped coin might fetch quite a price from a wealthy coin collector, maybe as high as 10 or 20 million, but that's a far cry from a trillion. Even if someone was willing to pay a billion dollars for it, that is still worth a thousand times less than the one trillion dollar denomination the congress would declare.
The point is, everyone can see the inherent unfairness in this scheme. Something only has that kind of value if both the seller and purchaser perceive it has that kind of value. Declaring a coin to be worth $1 trillion is tantamount to printing money from nothing. It only has that kind of value because that's what the law says. The Federal Reserve has been printing money from nothing since its inception. It's only acceptable as money because that's what the law says. Certainly the notes used to be pegged to gold in a round about way, but that was long ago. The idea of a trillion dollar platinum coin is just a new twist on an old idea. It's the same old, same old of not facing up to the current economic problems of today. It's building upon old problems and creating new for future generations to have to deal with.
The grandfathers and great grandfathers of my generation did not treat the Federal Reserve System as a joke. They did not see it as a joke because of the propaganda that was presented to them at the time it was being considered. No one laughed at the idea of creating debt based money because there was still a sense that the money had value based on gold and silver. Little did they know that this was all part of the illusion. Little did they know that their grandchildren and great grandchildren would have to deal with the economic woes that come with a fractional reserve fiat currency system. If the wealthy banking elite had, back in the day, suggested a trillion dollar coin, they would have been laughed out of the country. They had to come up with something more sophisticated, and more devious. Have we so lost our sense of economic value and common sense that we would now fall for such an obviously fraudulent solution to a debt crisis?
If they can mint a trillion dollar coin and declare that its value, why not 2 trillion? Why not 16 trillion, and get rid of the whole debt? Why not a gazillion dollars and the Federal Reserve and the whole world will owe us forever and ever? Everything will be free and we'll all live happily ever after. If you believe such methods are good ideas, what kind of delusion are you living under? Don't you think our creditors might have something to say about that? Don't you think they'd see the inherent unfairness in such a ploy? Don't you think that might upset them a bit? Don't think that we as an empire are so high and mighty. Even the mightiest giant can be felled by a well aimed pebble.
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