The Obama administration said on Saturday that it will not mint a trillion-dollar platinum coin to sidestep the debt ceiling.
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” Treasury spokesman Anthony Coley said in an email.
Some economists and writers had pushed the Obama administration to mint a trillion-dollar coin if Republicans refuse to raise the debt ceiling.
Congress needs to approve most new borrowing, but an obscure provision of a 1997 law allows the Treasury secretary to mint platinum coins of any value.
The law was intended to allow for collectible coins, but some argued the president should use the power to prevent the government from defaulting on its debt.
Paul Krugman, a Princeton economist and columnist for The New York Times, acknowledged that the coin proposal was “silly,” but said failing to raise the debt limit would be “equally silly but both vile and disastrous.”
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