Regardless of whether you are a coin collector, you probably would be interested in any currency with a big number on it. It might be something comparatively worthless, such as Zimbabwe’s $100 trillion bills or the valuable and massive Canadian $1 million coin.

If collecting that kind of currency appeals to you, you no doubt would love to make a place in your collection for a genuine United States $1 trillion coin. No such thing, you say? No… but we came close to creating one, and there’s nothing that says that we won’t contemplate doing it again.

The amount of currency in the U.S. economy is largely dependent upon Congress. When the government needs money for anything, the Treasury Department can’t just turn on the printing press and crank out as much as it wants. Every dollar that is printed has to be backed by money that is in the government’s bank account or by bonds.

When the amount in the bank runs out, the government essentially shuts down unless it can come up with some more cash or Congress authorizes borrowing more money through the issuance of treasury bonds.

In January 2013, the government was facing a shutdown. President Barack Obama requested an increase in the debt ceiling. The Republican-controlled Congress was unwilling to grant his request unless he would agree to pull the plug on the Affordable Care Act, otherwise known as Obamacare.

The debt limit at the time was $16.394 trillion. With Congress unwilling to raise that limit and authorize more borrowing, Obama looked for another option. He found a tantalizing loophole in a statute that authorized the creation of commemorative coins.

31 USC 5112 was enacted in 1996 to permit the Department of the Treasury to create special coins for collectors. Section k of that statute seems to open the door to using that law for other purposes. It reads:

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.

In other words, although new paper money could not be printed without Congressional approval, the Secretary of the Treasury did have the ability to create coins and assign whatever value he deemed appropriate.

Because of the ambiguity of the statute, the Obama Administration contemplated creating a $1 trillion coin that it would deposit in the government’s accounts. That would keep the debt limit at $16.394 trillion, but there would be $1 trillion in cash available to keep things running.

On the downside, this is exactly the sort of thing that creates runaway inflation, rapidly reducing the value of all of the money in circulation. Since there is no requirement of having any kind of understanding of basic economics to be in government, however, this is a concept that is typically lost on those who are in power.

Although the plan was presented, it was not implemented. Congress ultimately approved an increase in the debt ceiling, and the business of government went on with its usual thriftiness and top-notch efficiency.

Editor’s Note: It leaves a bad taste in our mouths just TYPING the words of that last sentence.

That’s not to say that the idea is gone or that the loophole has been closed. The $1 trillion coin concept was raised again during the 2020 COVID pandemic when Congresswoman Rashida Tlaib proposed it as a way to fund stimulus payments.

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