I was under the impressions that the “trillion dollar coin” proposal was an accounting trick to try to get around the artificial “debt limit” that Congress imposes on itself.

There have been structural budget deficits for over twenty years, so every couple of years the debt limit is raised.

Every so often, a group of newly-elected House members decides they are going to engage in brinksmanship with raising this limit — not fully comprehending the global financial meltdown that would occur if the government actually defaulted on its debt. In the end, the debt limit is ALWAYS raised. There is no other option.

So, people get annoyed with this game and try to find ways to render the “debt limit” meaningless. You could pass a law eliminating the debt limit! But if you don’t have the votes for that you get creative.

This old proposal was for the treasury to mint an trillion dollar coin and then deposit it in the Federal Reserve. It is not circulated. I don’t think something like that could even be “spent” (anyone got change for a trillion?). But in accounting terms it would count as an asset which would keep us below the “debt limit”. The government wouldn’t default. Brinksmanship by newly-elected Congressmembers is no longer a thing.

They’ll never do it though. It sounds too insane and “it’s just an accounting trick” is not an explanation that would sit well with potentially horrified voters.