The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 18

In 2013 U.S. government policymakers flirted with the idea of minting a $1 trillion platinum coin and having the Fed purchase it. The Fed would basically print up a trillion dollars and hand it to the Treasury (either that or make an electronic transaction). The proceeds would allow the government to avoid its debt ceiling. Why didn't the Fed propose minting the coin with, say, Mickey Mouse's face on it, or even minting an official $1 trillion plastic coin? And no matter what material the government would use to mint the coin, is the proposal inflationary?