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Would a trillion dollar coin buy time to resolve the debt ceiling debate?


All right. There is one wild idea for dealing with the nation's debt ceiling crisis, if it becomes a crisis. It's known as the trillion dollar coin. NPR political correspondent Danielle Kurtzleben says this notion is not new.

DANIELLE KURTZLEBEN, BYLINE: The idea leans on a law from the '90s that allows the Treasury to mint commemorative platinum coins of any denomination they want.


OK, so why not just mint a trillion dollar coin and use it to pay a trillion dollars' worth of debt?

INSKEEP: This idea sounds like a joke. In fact, it has been. The TV series "The Simpsons" once had an episode that played on a similar concept.


UNIDENTIFIED ACTOR: (As character) To make good on this drunken boast, Truman authorized the one-time printing of the largest denomination currency ever, a trillion dollar bill.

INSKEEP: Our colleague Danielle says this could happen in theory.

KURTZLEBEN: Print a coin worth $1,000,000,000,000. Then the Treasury deposits the coin at the Fed and, poof, then there's money to keep paying the bills.

MARTÍNEZ: Now, there is one problem. The U.S. would mint the coin in order to avoid chaos, but doing it would cause some chaos.

KURTZLEBEN: If you minted that coin, you could be dragging the Fed into a political fight, which is exactly where the Fed doesn't like to be.

INSKEEP: There are also potential economic problems, according to Moody's Analytics chief economist Mark Zandi.

MARK ZANDI: So you own a 10-year bond. You're watching these machinations, gimmicks and legal challenges, and you're saying to yourself, there's a pretty good chance I'm not going to get paid at some point in the next 10 years. Therefore, you got to pay me more to take this risk, or I'm just out of here.

MARTÍNEZ: Investors would demand higher yields or interest rates on U.S. government bonds.

INSKEEP: This may explain why the United States has rejected the trillion dollar coin in the past. Maybe Homer Simpson said it best.


DAN CASTELLANETA: (As Homer Simpson) Ooh, a trillion dollar bill. That's a spicy meatball. Transcript provided by NPR, Copyright NPR.

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