Key Sentence:
- On Tuesday, TOPLINE Treasury Secretary Janet Yellen rejected the controversial idea of using legal loopholes to dig up a $1 trillion coin.
As a last-ditch effort to help the United States pay off its debt, saying the concept should not be considered. Despite its popularity on social media and the growing risk that the United States will fall into recession if lawmakers fail to raise or end the debt ceiling in the next two weeks.
On a televised appearance on CNBC, Yellen said she was against minting coins to pay off some of the nation’s debt. However, this seemingly far-fetched idea remains supported by some leading economists, including Nobel Prize winner Paul Krugman.
Digging for coins, Yellen said, would be equivalent to asking the Federal Reserve to print money to cover a deficit that Congress is reluctant to close by issuing debt.
Thereby jeopardizing the Fed’s independence from the monetary policy it monitors.
“This is a hoax,” added the former chairman of the US Federal Reserve. Adding that the idea also combined the duties of the central bank and the Treasury. Yellen’s comments followed a renewed wave of interest in the one trillion dollar coin concept attended by several lawmakers, including officials. Trend and advocate for it on social media.
Despite opposing the idea, Yellen doubled down on her criticism of ensuring the United States takes action to raise or stop the debt ceiling. Saying she “wholeheartedly” expects the nation to plunge into recession and only does this on October 18, if she believes. The Ministry of Finance will spend its solvency on financial liabilities.
At a briefing on Monday, White House spokeswoman Jen Psaki also rejected Yellen Opposes Minting the idea of minting a coin. Saying it was also not a “viable” option. As the Federal Reserve would not accept it as it would from our Secretary of State. Financial or only with legal restrictions.”
MAIN ADVANTAGE
The minting of a trillion-dollar coin first emerged during a similar debt crisis in 2011. When several scholars identified a legal requirement to allow the Treasury to mint unlimited platinum coins. “At first glance, Janet Yellen could mint $1 trillion platinum coins – no, it doesn’t have to be $1 trillion platinum. She deposited and withdraws from the Federal Reserve to continue using government accounts.
Without paying off loans.” Krugman wrote in the New York Times published last week. . Although he rejected the idea in 2011, Krugman’s position changed significantly because of repeated attempts by Republicans to block the debt ceiling, saying, “Given the stakes. Who cares if his approach sounds ridiculous. -not the Minister of Finance appointed by the President – to embezzle funds.
WHAT ARE YOU LOOKING AT Yellen Opposes Minting
While the one trillion dollar coin may seem unavailable for now. Lawmakers still have several options to add or remove the debt ceiling before the deadline approaches. Senate Majority Leader Chuck Schumer (D-N.Y.) is expected to vote next Wednesday, December. On the House of Representatives move to suspend the debt ceiling, despite Republican promises to block it.
Additionally, the Senate legislature advising lawmakers on chamber rules said Monday that Democrats could use a unique reconciliation budget process to break the debt ceiling without Republican support.