A Trillion Dollar Coin Will Make a Mockery of the Dollar

There has been a lot of talk about a trillion-dollar coin that would ostensibly be used to save the economy (and Obama’s butt). You see, the GOP has threatened to block raising the debt ceiling again in order to force the spend-like-the-federal-government-is-going-out-of-business president to actually cut spending as opposed to cutting the ridiculous size of growth. People have suggested that the president resort to one of the constitutional authorities it has and mint coins, specifically one coin, that is worth $1 trillion. It would be similar to actually minting pennies like the ones I’ve used for my book cover (shown in the website header with $19,653.14 value).

Of course, this would be nothing more than instant $1 trillion of inflation. Inflation increases the money supply so that the government can buy more stuff, but it also decreases the value of all the other money out there. Imagine if there was only $1 trillion circulating in the world and let’s say that all the goods and services in the world were equivalent to that. If you introduce another $1 trillion, it doesn’t do anything to increase the amount of goods and services, it just doubles the money supply, making everything out there worth half as much in terms of dollars (it would take twice the money to buy the same things). It makes the dollar more like Monopoly money than it is today.

If a trillion-dollar coin was good for the economy, it would mean that Zimbabwe would have one of the healthiest economies in the history of man-kind. They have a lot of trillion-dollar coins. But it didn’t really help them did it? No, it just meant that bread cost a trillion dollars. Eggs cost a trillion dollars. Water cost a trillion dollars.

Of course, the trillion-dollar coin is a great idea to economically incompetent political pundits, but in reality it would be just another sneaky gimmick that would allow the status quo in government, which is a very scary status quo. If people want real solutions they will need to buckle down and CUT SPENDING.