How can you make a $1,000,000,000,000 ($1 trillion) dollars? by Lee Ballentine
Answer by Lee Ballentine:
There is a legal method, dating to the 14th century, that would allow a President of the United States to make a $1 trillion coin. Doing this was seriously proposed in 2011 as a means of keeping the United States government operating while Congress blocked raising our debt limit. The method is called seigniorage (the king’s or lord’s portion) which is defined as the difference between the cost of the bullion (precious metal) used to make a coin, and the face value legally assigned to it. Here’s how you would do it:
- Be elected President.
- Appoint a Secretary of the Treasury.
- Have the Secretary of the Treasury order the U.S. Mint to strike a special platinum coin with a face value of one trillion dollars.
- Place this coin on deposit at the Federal Reserve’s Treasury Account.
Congratulations! You just made $1 trillion and used it to pay down the debt of the United States by that amount. Recall that the Constitution, in Article 1, Section 8, gives Congress the sole power “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.” In 1996, the Republican Congress updated the law at Section 31 U.S.C. § 5112 of the U.S. Code for the Treasury Department to "mint and issue platinum bullion coins" in any denominations the Secretary of the Treasury may choose.
Harvard constitutional law authority Laurence Tribe has argued that this method is valid and no one has standing to challenge it. Barack Obama worked the last debt ceiling crisis out with Congress, but this could become an issue again in the future. Stay tuned.