Defenders of the $1 trillion coin say that while the idea is a gimmick, so is the debt ceiling. This view misses the role played by the debt ceiling. If there wasn’t a debt ceiling in place, we wouldn’t be debating the need for more spending cuts right now. I’d be the first to admit that the debt ceiling hasn’t enforced fiscal discipline on Washington. But without it, we wouldn’t even be having the discussion. The debt ceiling is no more a gimmick than the credit limit on one’s credit card.
My primary objection to minting a $1 trillion coin, however, is that doing so would not, in any way, address the underlying fiscal problems facing our country. At heart, the coin idea is an attempt to avoid fixing those problems. Any politician embracing this gimmick would be displaying a lack of leadership and responsibility that is reckless even by Washington standards. We need to stop with the distractions and focus on putting America on a more responsible fiscal path.
Mark A. Calabria is the director of financial regulation studies at the Cato Institute.