Just when people are getting a breather from hearing "fiscal cliff" every five minutes on the news, another crisis comes along: Hitting the debt ceiling.
As CNNMoney reports: "It's official: U.S. debt reached its legal borrowing limit Monday, giving Congress about two months before it must raise the debt ceiling or risk causing the government to default on its bills and financial obligations."
So, to avoid going over the $16.394 trillion debt limit, the U.S. Treasury will take measures to keep the country under that limit until at least Feb. 28.
So what to do? Well, there is a boring way and an interesting way.
The boring way is just to have Congress raise the limit. As Reuters quoted Alan Krueger, chairman of the White House Council of Economic Advisers, who was speaking on Bloomberg television: "It is quite clear that the economy will be better if Congress does its job and does what it routinely has done historically, which is raise the debt limit without problem."
But where is the fun in that? The interesting way to solve the debt ceiling crisis involves a few new coins.
James Pethokoukis, the money and politics columnist-blogger for the American Enterprise Institute, recounts a suggestion from Chris Krueger at Guggenheim Securities' Washington Research Group. Krueger suggests the U.S. Treasury simply mint a few trillion-dollar platinum coins.
Just to make sure this is clear. Krueger is saying the Treasury could make several coins, platinum coins mind you, with a face value each of a trillion dollars.
"The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins," Krueger says. "The President would then order the coins deposited at the Fed, who would then put the coin (s) in the Treasury who now can pay all their bills and a default is removed from the equation. The effects on the currency market and inflation are unclear, to say the least."
But it would be fun. There would be lawsuits, etc.36 comments on this story
The coins could be used, as ABC OTUS News explains, "toward fulfilling debt obligations in the event new legislation stalls in Congress."
But there is a problem on the face of it all, according to ABC OTUS: "At that point, the American people must decide whose face will adorn the trillion dollar trinket. The process to determine the 'specs' of the coin, U.S. Mint Public Affairs Specialist Genevieve Billia warns, must be 'determined by legislation,' creating the potential for another congressional impasse. Also to note: The likeness sculpted into its side must belong to a dead person, ruling out early favorite Ikea Monkey, but boosting the candidacies of Ronald Reagan and John Maynard Keynes."
Or, if Jay Evensen of the Deseret News has his way and the penny coin at the other end of the spectrum is eliminated, Lincoln's head will be looking for a new home.