“Congress screwed up,” Beowulf wrote. By passing the law, it had given the president the authority to direct the secretary of the Treasury to mint a coin of any value — say, $1 trillion — and deposit it in the Federal Reserve, which would be legally obligated to accept it. Ultimately, the coin’s deposit would result in $1 trillion in government revenue or, with a coin of a different denomination, however much was needed to continue to pay its bills and avoid a default. “The catch is, it’s gotta be made of platinum,” Beowulf wrote. “Ditto the balls of any president who tried this.”
In the time since, the idea has gained an unexpected acceptance among policymakers and economists. In 2013, Representative Jerry Nadler said that the idea “sounds silly, but it’s absolutely legal.” Shortly after, Paul Krugman asked himself in the New York Times if the president should be willing to mint the coin to avoid default. His response? “Yes, absolutely.” Phillip Diehl, a former director of the Mint and Treasury chief of staff who co-wrote the 1997 law, allowed that a coin with a specific denomination of $1 trillion was “an unintended consequence” but maintained that the possibility was always conceivable. “In principle, there is nothing new,” he has said. “Any court challenge is likely to be quickly dismissed.” In 2020, Representative Rashida Tlaib sponsored a plan to mint two coins to fund pandemic aid, and this year both Treasury Secretary Janet Yellen and Federal Reserve chair Jerome Powell have faced questions about using the coin to end the standoff. Each registered objections, but neither would rule it out.
As it turns out, Beowulf is not an economist or a professional policy wonk. He’s a Georgia lawyer named Carlos Mucha. “Criminal defense, shareholder disputes, a little of everything,” he told me recently. He’s a tinkerer — “Jack of all trades, master of none,” he says — and his frequent visits to the comments sections of a set of financial websites were a kind of hobby.
“What got me thinking about it was that I was reading that people were using their credit cards to buy tens of thousands of U.S. dollar coins from the Mint just to get the credit-card points,” he said. “At the time, the Mint had free shipping and handling, and since it’s from the government, the coins are tax free.” They would charge $10,000, get ten thousand one-dollar coins, and use the coins to pay off their card. This really happened — one such dollar coiner told The Wall Street Journal that he took 15,000 coins straight from the delivery truck to the trunk of his car, to more easily drive them to the bank. “You don’t have to do that too many times to get a free first-class ticket,” Mucha said.