There’s a statutory limit to the amount of paper currency that can be in circulation at any one time. There’s no similar limit on the amount of coinage. An obscure statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. Some have recently suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.
US CODE: TITLE 31 SUBTITLE IV CHAPTER 51 SUBCHAPTER II § 5112
Denominations, specifications, and design of coins
(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
“Circulating coins are shipped to the Federal Reserve Banks (FRB) as needed to replenish inventory and fulfill commercial demand… Seigniorage is the difference between the face value and the gross costs of coins shipped. Seigniorage adds to the Federal Government’s cash balance, but unlike the payment of taxes or other receipts, seigniorage does not involve a transfer of financial assets from the public. Instead, it arises from the exercise of the Federal Government’s sovereign power to create money and the public’s desire to hold financial assets in the form of coins. The President’s Budget excludes seigniorage from receipts and treats it as a means of financing the national debt…” p. 28, US Mint, 2009 Annual Report
The United States doesn’t need, and shouldn’t have, a debt ceiling. The US is the only Democratic country besides Denmark with one. There is no debt limit in the Constitution. If Congress wants to cap and balance government debt, it already has a way that doesn’t risk economic chaos or a Constitutional meltdown — it’s called the annual budget.
If used routinely to close the revenue gap, such coin seigniorage would eventually reduce the national debt to zero, and remove it as an issue in US politics. In addition, the existence of platinum coin seigniorage as an option, removes the tension between the mandated debt ceiling and the 14th Amendment.