With the debt ceiling fast approaching and both sides digging in, many are looking for a quick fix to the problem. One possible solution that has been floated lately is the ‘trillion dollar coin’ idea.
Apparently, the U.S. Treasury is allowed to mint as many coins of platinum as it so desires and it can also assign them any value it chooses. With this loophole, the Treasury could print up a couple trillion dollar platinum coins, deposits them at the Federal Reserve, and then the Fed moves it into the Treasury’s accounts, pretty much eliminating a debt ceiling fight altogether.
While this would ‘solve’ the problem, it would also likely infuriate Republicans who more or less caved on the Fiscal Cliff and were looking to extract something out of Democrats this time around. This could set up an even more partisan stretch over the next few years, assuming that this is the route that Obama takes.
What do you think about the idea?
Is this a good way to fix the debt ceiling debacle despite the political risks? Or is this a slimy way to avoid another political fight?
Let us know what you think in the comments below!
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>