Oregon Republican Greg Walden stepped into the national debt debate Monday, saying he’ll introduce a bill to stop the U.S. Treasury from minting trillion dollar coins.
The law currently allows the U.S. Treasury to mint platinum coins in any denomination — for collectors. And some in Washington have floated the idea of minting trillion dollar coins and depositing them in the federal reserve — thus giving the Treasury enough cash to sidestep the debt ceiling issue.
Walden says it’s absurd and dangerous. “This just tells you how zany things are in Washington when it comes to a serious discussion about the spending problem we have in this country.”
But some economists support the idea. They say creating money is basically what the Federal Reserve already does.
Still, Paul Warner of Oregon’s Legislative Revenue Office says there can be consequences.
“The idea behind monetary policy is to put the right amount of money out there that will help people’s confidence, that they’ll spend it, stimulate economic activity. Without raising the fear of inflation, that money will lose it’s value because there’s too much of it.”
Walden’s bill would disallow the Treasury from minting platinum coins as a way to pay down the debt.