The Home Of Holographic Thought

Coin Seigniorage – $1 Trillion Coins To Settle National Debt

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.

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.


July 29, 2011 - Posted by | Government | , , , , ,


  1. It is that simple, until the market catches up that is. It seems very familiar….. almost like a gigantic version of quantitative easing….. devaluing the dollar while paying off the amount of debt owed. Solves the immediate problem, but could drop Americas AAA rating down to double A. This rating drop then increases the amount of intrest charged by other countries. It would make the U.S dollar less desirable. The other thing is that certain investors only deal with triple A stocks. If American stocks go from triple A to double A, a flood of sellers appears, and the value of these stocks is diminished. Its as uncertain an outcome as defaulting, but at least it is trying something. The bottom line is that no matter the solution, the U.S needs to be more responsible with spending.

    Comment by kyle K | July 31, 2011 | Reply

    • Hi Kyle,

      The credit ratings would be meaningless because the US would no longer require credit once the process is complete. The existing debt, all of it would be paid off in this manner with the same full faith and backing of the government.

      This is the wealthiest country in the world with myriad assets (in people, capacity, potential, resources, inventiveness etc.) and we should not be selling bonds at interest or buying money at interest. It goes against the original intent of the Constitution.

      This would end the federal reserve system and the government would issue US Currency, which is an instrument of wealth instead of buying Federal Reserve Notes, which are instruments of debt.

      I’m not an economist, I am a researcher so the idea may have many flaws, but the system we have now was flawed from the start and too easy to manipulate by insiders and those “in the know”.

      I do agree with your bottom line that the U.S. needs to be more responsible with spending.

      Thanks for the thoughtful comment!

      Comment by pstuph | August 4, 2011 | Reply

  2. Can it be that simple? Should be done if so. Gold and silver is our money and is good. Hope america can do this.

    Comment by Shariq | July 29, 2011 | Reply

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