Mr. Burns' Monetary Policy
The remarkable pop culture roots of the trillion-dollar coin
Kids, have you heard the wacky idea that the United States could avoid this whole debt ceiling foolishness by simply minting a trillion-dollar coin and depositing it into the Federal Reserve? If you thought that was weird, wait till Jack Hughes tells you the strange but true story of where it came from.
by Jack Hughes
The idea seems too clever by half, cartoonish even, the U.S. debt ceiling crisis could be easily averted if the Treasury minted a $1 trillion coin. It’s a real thing with roots in both populism and popular culture, and the clear frontrunner for the most mind-blowingly fantastic – in every sense of the term – economic idea ever conceived. It has everything from The A-Team to The Simpsons to the Austro-Hungarian Empire.
But first, a very poor layman’s explanation of the debt ceiling crisis: There’s a cap on the amount of money the U.S. government can borrow and, once again, they’re about to hit their limit. If Congress doesn’t vote to increase the debt ceiling, the government can’t borrow any more money and risks defaulting on its obligations. This comes up often, causing a big tug-of-war between Republicans and Democrats.
The $1 trillion coin idea is a jerry-rigged workaround forced through a loophole. In short, the idea is that if the U.S. Treasury minted a $1 trillion coin made of platinum it could immediately deposit it with the Federal Reserve and, just like that, the U.S. government would be a trillion dollars below the debt ceiling. The loophole requires it be platinum because there are rules about minting coins made of gold, silver, etc.
According to The Experiment’s research department, the man who popularized the idea of a trillion-dollar coin to pay off the debt was 1992 Populist Party presidential nominee Bo Gritz. He argued it wasn’t fair to impose debts on future generations so it should be paid off using the Treasury’s power to value coins – he explained it with the analogy that it only costs 8 cents to mint a physical quarter, but it’s valued at 25 cents.
Bo Gritz has an awesome backstory.
As his name suggests, Bo Gritz has an awesome backstory. He was a Special Forces officer in Vietnam who later organized private missions to rescue POW/MIAs. Gritz became known for his unconventional views on what some might uncharitably, but not incorrectly, call conspiracy theories. Yet, the greatest fact about Gritz is The A-Team lead Colonel ‘Hannibal’ Smith (played by George Peppard) was based on him.
Anyone familiar with The A-Team knows that Hannibal loves it when a plan comes together, and the $1 trillion coin is the perfect A-Team plan. Almost every episode of the show involved the A-Team improvising some improbable fix. If the bad guys trapped them in a garden shed, they’d bust out by turning a rusted lawnmower into a tank using a broken sprinkler head, half a bag of fertilizer, and some chicken wire.
Of course, Gritz wasn’t elected president in ’92 but his trillion-dollar solution was later amplified by a more influential group of experts – those proven prognosticators, the writers of The Simpsons. The animated series has an unparalleled track record of accurately predicting everything from Trump being elected president to who’d win various Super Bowls to the Higgs-Boson particle to Disney buying 20th Century Fox.
In a 1998 episode entitled “The Trouble with Trillions,” Homer Simpson is audited by the IRS who offer him a deal to avoid prison time – he has to snitch on his boss C. Montgomery Burns. The FBI then shows Homer a newsreel of President Harry Truman authorizing the onetime printing of – you guessed it – a trillion-dollar bill to make good on his “drunken boast” of providing postwar economic relief to Europe.
Truman entrusted Burns to deliver the bill to the Europeans as “America’s wealthiest, and therefore most trustworthy, citizen,” but the FBI thinks Burns stole it. Homer confirms Burns carries the bill in his wallet and also owns a statue which shows him “standing up against America’s reckless spendthrift politicians [and] commemorates [Burns’] liberation of a trillion dollars that would have been foolishly squandered.”
‘Monty’ Burns is an avowed Republican on the show, but actual Republicans often campaign on standing up to reckless spendthrift politicians who foolishly squander taxpayer money. Given the events of the past year, one has to be worried that if the government minted a physical $1 trillion coin someone might try to ‘liberate’ it by force, for those reasons, as it traveled from the U.S. Mint to the Federal Reserve.
This speaks to what is, perhaps, the most remarkable thing about the trillion-dollar coin idea: They would actually have to produce one.
This speaks to what is, perhaps, the most remarkable thing about the trillion-dollar coin idea: They would actually have to produce one. The government couldn’t just do it on paper or as an e-transfer – Biden can’t use his Venmo. Nope, they would actually have to strike a real coin made of platinum. It’s size and design wouldn’t matter, leading some to say it should have famed conman Charles Ponzi’s face on it.
The Nobel-prize winning economist and New York Times columnist Paul Krugman endorsed the idea in 2013, noting “money is a social contrivance.” Krugman further claimed those who said the coin was impossible clung to the ‘pre-Enlightenment’ belief that “the laws of value are basically divine, not human” and, moreover, that “printing money that isn’t tied to gold is a kind of theft, not to mention blasphemy.”
This brings us back to the Republican Mr. Burns…not the fictional Monty Burns but former Federal Reserve Chairman Arthur Burns. Fifty years ago, in August 1971, Burns traveled to Camp David with President Nixon to make the most momentous monetary policy decision since postwar Bretton Woods, to close the gold window, which ended the convertibility of the dollar for gold impacting global exchange rates.
As Fed Chair he fought a familiar foe: Inflation. In this, Arthur Burns’ remedy of tight monetary and fiscal policy align with Monty Burns’ view of the world. It’s not surprising both were old friends of Richard Nixon – with Monty saying he let Nixon beat him at golf in 1974 because he “just looked so forlorn.” (Arthur was born in the Austro-Hungarian Empire, Monty sometimes thinks it still exists and we live in it.)
By way of some additional comparisons, in 1973 Arthur Burns supported raising the debt ceiling to $463 billion. The deal reached in the Senate this week to temporarily extend the government’s borrowing capacity until December had the effect of raising the debt ceiling by $480 billion. As of August 21st, 2021, the debt ceiling now stands at $28.4 trillion. On some level, it’s sorta like tossing a $1 trillion coin into a fountain.
President Biden may soon be faced with a decision. If Congress doesn’t raise the debt ceiling, will he use a loophole that was intended to allow the U.S. Mint to make commemorative coins to produce a single platinum coin worth $1 trillion that will never go into circulation? Amazingly, it’s a serious question but it sounds as silly as should he follow The A-Team’s ‘Hannibal’ Smith or The Simpsons’ ‘Monty’ Burns?
Jack Hughes is a communications consultant based in Canada. His previous contributions to The Experiment include “Same of Thrones,” “Tippecanoe and Agnew Anew,” “Harris / Shuri 2020,” “Bidenfeld,” “Firth and Firthiness,” “The Ballot of Bill McKay,” and “The World Wants ‘The West Wing,’” among others. His inexplicably extensive writings on Dan Quayle are “The Unusual Suspect,” “The Unusual Suspect II,” “The GOPfather,” “Porqua, CoQau?”, “Quayle’s Hunting Season” and “I Told You So.” Connect with him on LinkedIn here.
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