News
2 July 2024
Some call it the ‘least bad option’, some a ‘dumb idea that won’t go away’. But perhaps it was beloved fictional character Homer J. Simpson who summed it up perfectly when he said, “Ooo a trillion dollar bill, that’s a spicy meatball!”
Some call it the ‘least bad option’, some a ‘dumb idea that won’t go away’. But perhaps it was beloved fictional character Homer J. Simpson who summed it up perfectly when he said, “Ooo a trillion dollar bill, that’s a spicy meatball!”
Several plot lines of acclaimed US TV show ‘The Simpsons’ have notoriously predicted future events, even ones that seemed outlandish at the time, such as the Trump presidency or Disney buying 20th Century Fox.
The latest in that line of soothsaying has revealed itself amidst discussions around a trillion dollar coin which can, in theory, bail the US out of a current debt crisis where the country is nearing its US$31.4 trillion ceiling.
The US Congress has spent more than it collected in revenue and the difference was made up by the government borrowing money. After a decade of belligerent borrowing, the government has run a deficit averaging nearly $1 trillion every year since 2001.
But here’s how the plan could work – cue heist music – US President Joe Biden orders the Treasury Secretary to mint a trillion dollar coin. The coin is then deposited with the Federal Reserve. The Fed then has enough money to pay its bills without additional borrowing. And then…what debt crisis?
In the real world however, US Treasury Secretary Janet Yellen has squashed the idea. One reason could be hyperinflation (if regular inflation weren’t enough), where creating US$1 trillion dollars out of nothing can greatly reduce the value of money in circulation.
The idea of the trillion dollar coin had previously been floated to the White House in 2011 under similar circumstances and was eventually rejected. Though history does prefer to repeat itself and it appears that some lessons are not ready to be learned.
Sources:
- Council on Foreign Relations, What Happens When the U.S. Hits Its Debt Ceiling?
- Investopedia, Trillion-Dollar Coin
- SchiffGold, The Trillion-Dollar Coin: A Dumb Idea That Won’t Go Away
- The Atlantic, The Trillion-Dollar Coin Might Be the Least Bad Option
- The Hollywood Reporter, ‘The Simpsons’: 30 Times the Fox Comedy Successfully Predicted the Future
- The Washington Post, The trillion-dollar coin: Is it a solution to the debt ceiling drama — or a gimmick?
- Yahoo News, Debt limit crisis: Why people won’t stop talking about the trillion-dollar coin
- YouTube, Trillion Dollar Bill – The Simpsons
