Traditional political wrangling over the debt ceiling is going nowhere. What about the gimmicks?
that the country would effectively be in default. And even if it ultimately clears the Supreme Court — effectively nullifying the debt limit for all future uses — there would still be confusion while it was litigated. “The 14th Amendment would probably be actually a little bit more tumultuous,” Reganti said.
The calls to mint the coin have been around for more than a decade and gained traction during the 2011 and 2013 debt-limit standoffs, when the Obama White House sparred with McCarthy’s mentor and predecessor, John Boehner. It’s also gained popularity online, where #mintthecoin has become a rallying cry championed by the likes of Bloomberg’s Joe Wiesenthal and economist Paul Krugman. And there’s something very satisfying about just creating a coin. The U.S.
“The coin would be operationally probably more simple. It’s unclear exactly how a legal challenge to that could actually take place,” Reganti said. Even though this is a somewhat antiquated process of creating money, Yellen has called minting the coin a “Then there are the technical fixes, the kinds of financial wizardry that can give the government a little bit of breathing room, but are akin to moving money around by creative application of accounting rules.
To Reganti, these are among the least likely options. Issuing a new bond is something that requires years of study, he said — because U.S. debt is the foundation of the global financial system, the Treasury takes its time to understand how a new type of bond could potentially unsettle broader markets.
became a mantra,” he said. The other problem is that managing the country’s $31.4 trillion in debt is extremely complicated, and Treasury’s systems can’t be upended so quickly to handle unusual new bonds. “It’s just very unclear operationally, both from an auction perspective and then from an ongoing payments perspective, the systems that could handle that, and those things don’t turn on a whim,” he said.
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