The trillion-dollar coin solution

By R.A. | WASHINGTON

AS THE date on which Treasury runs flat out of money grows nearer, various harebrained ideas to workaround the statutory limit on borrowing and keep paying the bills have been getting more attention. This one, one of my favourites, seems like it just might work:

Sovereign governments such as the United States can print new money. However, there's a statutory limit to the amount of paper currency that can be in circulation at any one time. Ironically, there's no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

To prevent the money from contributing to too rapid inflation, the Fed could simply conduct reverse QE—sell some of its enormous stock of government debt to absord some of the new money in the system. Though it's unlikely that inflation would be too serious an issue; indeed, it could be helpful.

Meanwhile, Jonathan Chait explains the possibility of side benefits from the plan:

I actually feel like this plan could, in addition to rescuing the economy, provide the spark our film industry requires. I could sit here for ten minutes and rattle off a half-dozen great film concepts based on this story.

Bank caper: a dashing Clooney-esque figure assembles a team to steal the trillion dollar coin.

Comedy: a bumbling assistant Treasury Secretary played by Jack Black accidentally picks up the trillion dollar coin and spends it on a Mountain Dew, sending the entire government into a mad scramble for the coin before the world economy collapses.

Noir: Regular person somehow acquires the coin, and is slowly twisted.

Action: Super-villain plots to destroy the coin and bring the economy to its knees, from which he stands to profit due to a nefariously brilliant hedge he has prepared. Maybe we'll call him "Eric Cantor."

Anything to distract from the actual spectacle in Washington.