It is silly season online with the same story popping up all over about solving the U.S. government’s debt problems by issuing two platinum coins worth $1 trillion each. This has been kicking around online for more than a year, but it has been gaining traction rapidly in the past week.
With the online imperative to publish the most headline-grabbing information possible, it is understandable that this story keeps popping up.
But if you are going to be outrageous to gain attention, why nibble around the edges?
The two $1 trillion platinum coins are supposedly justified as a means of dodging the spending restrictions that could result if the federal government’s debt ceiling is not raised shortly.
But why stop at two $1 trillion coins?
Why not strike one coin and put a $16 trillion denomination on it and declare that the nation has paid off all of its debt, or why not strike 16 $1 trillion coins if you like denominations in even numbers? Invite Lady Gaga to the debt retirement ceremony.
If you are going to employ silly logic to justify $2 trillion, the same silly logic also applies to $16 trillion.
Why stop there?
Why not strike enough coins to send every family in America a $1 trillion platinum coin? Everybody would probably would feel like a Rockefeller as they open the package, but when they attempted to buy lunch, they would discover that it costs $2.5 billion, or a meal in a nice restaurant would cost $25 billion. And those prices are good only for the next five minutes.
That’s what inflation does.
That’s why skittish investors have bid the price of gold up to $1,715 a troy ounce today, compared to $260 back in 2001. They worry about unlimited issuance of money. Historically, that worry is justified.
But the purpose of the $2 trillion story is not to initiate a logical discussion, but simply to call attention to itself.
It has succeeded.
Now when can I expect my $1 trillion coin in the mail?