- A US politician is pushing a proposal for the Treasury to mint two coins, each worth $1 trillion.
- It would help the US economy deal with the coronavirus pandemic, said Representative Rashida Tlaib.
- Leading voices in crypto have criticized the idea.
A US politician has asked the Treasury to mint two platinum coins, each worth $1 trillion, in order to help the nation’s economy deal with the coronavirus pandemic.
The coronavirus has killed over 13,000 people worldwide, including 348 in the US, according to data metrics site Worldometers. It has also ruined the country’s economy, and the government is working out how to save it.
The two $1 trillion coins would be used to pay $2,000 to everyone in the US, and $1,000 a month after that—until a year after the crisis ends, wrote Representative Rashida Tlaib, of Michigan, in her proposal, dubbed the "Automatic BOOST Act.” The money would help people stay afloat during the crisis.
Here’s how Tlaib’s plan would work:
First, the US Treasury would ask the US Mint to issue the coins, whereupon the Fed would immediately buy them at face value.
Then the Treasury, now $2 trillion richer, would provide the Bureau of the Fiscal Service with access to the funds. The Bureau would distribute the cash to every person in America in the form of prepaid US Debit Cards.
“This approach would preserve the historical separation between fiscal and monetary policy and avoid financial entanglement between the Treasury and the Federal Reserve which would eventually undermine the independence of the Fed,” states the proposal.
"It is important to note: With this proposal, we will NOT require the government to issue more debt." Tlaib tweeted. The US government is already considering sending citizens checks as part of measures to help Americans affected by the economic fallout from the virus.
The country’s stock market last week had its worst day in over 30 years. Major sectors of the economy, notably the travel and hospitality industry, have ground to a halt. Unemployment claims have skyrocketed as government lockdowns keep people inside.
And the US Federal Reserve slashed interest rates to near-zero last Sunday while promising $700 billion in quantitative easing—an unprecedented move. Governments have promised blank checks to remedy the crisis.
Politicians first came up with the idea to mint trillion-dollar coins during the 2011 US debt-ceiling crisis. Minting high-value platinum coins would supposedly bypass the need for Congress to raise the country's borrowing limit. But in January 2013, the Federal Reserve and the Treasury rejected the idea.
No friends here
Tlaib’s proposal has irked the crypto community.
Samson Mow, the chief security officer at blockchain technology company Blockstream, said in a tweet that the plan was a “stupid idea.”
“Wouldn’t the best way then be refunding income tax that people paid? Right to their bank accounts. Monetary policy helps bankers. Bailouts help megacorps like airlines that blew cash on stock buybacks. Relief programs rely on someone determining need and priority,” he added.
Bitcoin developer and entrepreneur Jimmy Song said that Tlaib has underestimated the number of coins she proposes to mint. “You're going to need to print more Trillion dollar coins. This sort of thinking is exactly what leads to hyperinflation,” he tweeted yesterday.
But everyone thought Bitcoin was stupid, too.