Trillion-Dollar-Coin Fever

Has America’s choo-choo jumped the tracks?

By Mark Steyn

 

I was out of the country for a few days and news from this great republic reached me only fitfully. I have learned to be wary of foreign reporting of U.S. events, since America can come off sounding faintly deranged. Much of what reached me didn’t sound entirely plausible: Did the entire U.S. media really fall for the imaginary dead girlfriend of a star football player? Did the president of the United States really announce 23 executive orders by reading out the policy views of carefully pre-screened grade-schoolers (“I want everybody to be happy and safe”)? Clearly, these vicious rumors were merely planted in the foreign press to make the United States appear ridiculous.

 And indeed, upon my return, it seemed to be business as usual. ABC News revealed that in 2007 President Bush’s secretary of the interior — oh, come on, it’s on the citizenship test: “Name a secretary of the interior. Any secretary of the interior.” Anyway, ABC revealed that Bush’s secretary of the interior spent 220,000 taxpayer dollars remodeling his (or her, as the case may be) office bathroom. Who knew the gig was really secretary of the interior design? I’ll bet the guy who made Saddam’s solid-gold toilets was delighted to get a new customer. But what can be done? If we changed the name to secretary of the exterior, he’d have blown a quarter-million on a new outhouse.

 Meanwhile, hot from the fiscal-cliff fiasco, the media are already eagerly anticipating the next in the series of monthly capitulations by Republicans, this time on the debt ceiling. While I was abroad, a Nobel Prize–winning economist, a Harvard professor of constitutional law, a prominent congressman, and various other American eminencies apparently had a sober and serious discussion on whether the United States Treasury could circumvent the debt constraints by minting a trillion-dollar platinum coin. Although Joe Weisenthal of Business Insider called the trillion-dollar coin “the most important fiscal policy debate you’ll ever see in your life,” most Democrat pundits appeared to favor the idea for the more straightforward joy it affords in sticking it to the House Republicans. No more tedious whining about spending from GOP congressmen. Next time Paul Ryan shows up in committee demanding to know about deficit-reduction plans, all the treasury secretary has to do is pull out a handful of trillion-dollar coins from down the back of the sofa and tell him to keep the change. 

The trillion-dollar-groat fever rang a vague bell with me. Way back in 1893, Mark Twain wrote a short story called “The Million Pound Bank Note,” which in the Fifties Ronald Neame made into a rather droll film. A penniless American down and out in London (Gregory Peck) is presented by two eccentric Englishmen (Ronald Squire and Wilfrid Hyde-White) with a million-pound note which they have persuaded the Bank of England to print in order to settle a wager. One of the English chaps believes that simple possession of the note will allow the destitute Yank to live the high life without ever having to spend a shilling. And so it proves. He goes to the pub for lunch, offers the note, and the innkeeper explains that he’s unable to make change for a million pounds, but is honored to feed him anyway. He then goes to be fitted for a suit, and again the tailor regrets that he can’t provide change for a million pounds but delightedly measures him for dress suits, silk shirts, and all the rest. I always liked the line Mark Twain’s protagonist uses on a duke’s niece he’s sweet on: He tells her “I hadn’t a cent in the world but just the million pound note.”

That’s Paul Krugman’s solution for America as it prepares to bust through another laughably named “debt limit”: We’d be a nation that hasn’t a cent in the world but just a trillion-dollar coin — and what more do we need? As with Gregory Peck in the movie, the mere fact of the coin’s existence would ensure we could go on living large. Indeed, aside from inflating a million quid to a trillion bucks, Professor Krugman’s proposal economically prunes the sprawling cast of the film down to an off-Broadway one-man show with Uncle Sam playing every part: A penniless Yank (Uncle Sam) runs into a wealthy benefactor (Uncle Sam) who has persuaded the banking authorities (Uncle Sam) to mint a trillion-dollar coin that will allow Uncle Sam (played by Uncle Sam) to extend an unending line of credit to Uncle Sam (also played by Uncle Sam).

This seems likely to work. As for the love interest, in the final scene, Paul Krugman takes his fake dead girlfriend (played by Barack Obama’s composite girlfriend) to a swank restaurant and buys her the world’s most expensive bottle of champagne (played by Lance Armstrong’s urine sample).

Do you ever get the feeling America’s choo-choo has jumped the tracks? Joe Weisenthal says that the trillion-dollar coin is the most serious adult proposal put forward in our lifetime, “because it gets right to the nature of what is money.” As Weisenthal argues, “we’re still shackled with a gold-standard mentality where we think of money as a scarce natural resource that we need to husband carefully.” Ha! Every time it rains it rains trillion-dollar pennies from heaven. I believe Robert Mugabe made a similar observation on January 16, 2009, when he introduced Zimbabwe’s first one hundred–trillion–dollar bank note. In that one dramatic month, the Zimbabwean dollar declined from 0.0000000072 of a U.S. dollar to 0.0000000003 of a U.S. dollar. But that’s what’s so great about being American. Because, when you’re American, one U.S. dollar will always be worth one U.S. dollar, no matter how many trillion-dollar coins you mint. Eat your heart out, you Zimbabwean losers. As Joe Weisenthal asks, what is money? Money is American: Everybody knows that. 

Whether the world feels this way is another matter. For Paul Krugman, the issue is the insanity of the Republican party, as manifested in their opposition to automatic debt-ceiling increases. By contrast, the contrarian Democrat Mickey Kaus thinks Republicans ought to be in favor of the trillion-dollar coin as an easy short-term fix to prevent them from getting screwed over by Obama and the media for the second time in a month. But out there, in what the State Department maps quaintly call the rest of the world, nobody cares about Democrats or Republicans, and the issue is not the debt ceiling but the debt. Forty-four nations voted at Bretton Woods to make the dollar the world’s reserve currency. If they were meeting today, I doubt they’d give that status to a nation piling on over a trillion in federal debt per year, 70 percent of which its left hand (the U.S. Treasury) borrows from its right hand (the Federal Reserve) through the Nigerian-e-mail equivalent of Paul Krugman’s trillion-dollar groat.

Meanwhile, I see the Bundesbank has decided to move 300 tons of German gold from the Federal Reserve in New York back to Frankfurt. It’s probably nothing. And what’s to stop the Fed replacing it with 300 tons of Boston cream donuts and declaring them of equivalent value? Or maybe 300 imaginary dead football girlfriends, all platinum blondes. 

Memo to John Boehner and Paul Ryan: No one will take you seriously until you find some photogenic second-graders and read out their cute letters. “I want everybody to be happy and safe and fithcally tholvent.” They may have to practice.

— Mark Steyn, a National Review columnist, is the author of After America: Get Ready for Armageddon. © 2013 Mark Steyn