It started as a campaign gimmick. Obscure presidential candidate Bo Gritz came up with it in 1992, during his second White House run. Gritz never got very far, but his followers were passionate. And yes, that was his real name: James Gordon “Bo” Gritz.
Gritz ran under two different slogans: “Save the stars and stripes!” and “God, guns and Gritz!” He was known for courting conspiracy theorists, hoping to win converts from both the extreme right and the extreme left to his cause. And what was his cause? He had three major planks in his platform: a closed border with Mexico, re-segregation of the races in America, and the abolition of the Federal Reserve. As you might imagine, Mr. Gritz was not exactly a mainstream candidate.
Two of his policy ideas—the closing of the border with Mexico and the abolition of the Federal Reserve—have managed to gain traction in the modern Republican Party. One of Gritz’ big issues was the national debt, which he believed the Federal Reserve was at least partly responsible for. He had the idea that if the United States government could mint a single, trillion-dollar coin, it could send it to the Federal Reserve and immediately pay off the entire national debt. (Where Mr. Gritz thought the government could get a trillion dollars without going further into debt is something I cannot find any explanation for.) Gritz would sometimes hold up a single coin during his speeches as a prop, as if to suggest how easy it would be for his plan to work.
As it happened, Arkansas Governor Bill Clinton won that race, pulling in 44,909,806 votes. Gritz only got 106,152, putting him in fifth place for the popular vote, and tying for third place in the electoral vote, with zero. This would be Mr. Gritz’ last presidential run (to date), but he remains active in politics. To date, none of the ideas he advocated for have been put into place. One of them, however, did see a revision.
In 2011, Congress was embroiled in a disagreement with the White House over the debt ceiling. The debt ceiling is the limit that the American national debt can reach, and every couple of years, Congress will raise it. It has to, because Congress, having already spent the money, needs to pay for what they’ve spent. Not paying it is kind of like ignoring your credit card bills, except in this case, instead of getting turned away during your next shopping spree at Nordstrom’s, the entire U.S. government ceases to function after a month or two.
To deal with this looming crisis brought on by an inability of Washington to reach a consensus, a suggestion was made by lawyer Carlos Mucha, who posted online under the moniker Beowulf. Beowulf started pushing the idea that a trillion-dollar coin could be minted by the Treasury Department in order to cover the debt ceiling, and do an end-run around the mess on Capitol Hill. Strangely, the idea gained traction. When the Yale Law School caught wind of this idea, they started to promote it, but when Congress and the president managed to work out a solution to the 2011 debt ceiling crisis, interest evaporated.
However, the debt ceiling needed to be raised once again in 2013, and the same entrenched differences took hold. This time, economist Paul Krugman started to promote the trillion-dollar coin. Wonks pointed out that the Treasury is allowed to mint platinum coins for whatever reason it might deem fit, and that it does do this on occasion. Since there is no upper limit on these coins… why not a trillion?
From left to right: Mr. "Bo" Gritz, Rep. John Boehner (R-OH), Rep. Jerrold Nadler (D-NY).
Speaker John Boehner dismissed the idea, comparing it to an old Simpsons episode in which Homer goes looking for his lost trillion-dollar bill. The House tried to close the loophole that allowed Treasury to strike platinum coins, but this met with the opposition of Rep. Jerrold Nadler. The House didn’t push back, because it was clear that the Senate wouldn’t allow the platinum law to be abolished. The idea was that if the trillion-dollar coin were minted, it could exist as another trillion dollars on the Treasury Department’s balance sheet until the debt ceiling were raised, after which the coin could be melted down, because that’s a lot of money to leave lying around in loose change. In the end, the 2013 debt ceiling crisis did result in the government being shut down for a while, which raised American debt further. The debt ceiling was eventually raised, and no trillion-dollar coin has ever been minted. Yet.