Yalies and Trillions

A few days ago Jack Balkin, a law professor at Yale–remember that he’s at Yale, it will come in handy–offered up a funny but possibly ingenious solution to the debt ceiling problem:

Are there other ways for the president to raise money besides borrowing?

Sovereign governments such as the United States can print new money. However, there’s a statutory limit to the amount of paper currency that can be in circulation at any one time.

Ironically, there’s no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

The response to this suggestion has been mixed, but what I haven’t seen yet is anyone point out that something very much like this has already been done. It happened after World War II. President Harry Truman wanted to deliver $1 trillion in reconstruction aid to Western Europe, so he had the treasury print a $1 trillion dollar bill. For this secret mission, he dispatched a Skull and Bones guy, an alum of Yale, but the $1 trillion bill was never delivered to the Western Europeans. It wasn’t until years later that the FBI’s suspicions were confirmed, that the currier had indeed kept the bill himself:

Details are sketchy, but it’s likely that the $1 trillion bill is currently in the possession of Fidel Castro.

None of this, by the way, is a reason for Obama to not cast a couple of $1 trillion coins.


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