Nations are going through trying times, and they have to get creative in the fight against the coronavirus pandemic. In the United States, Democratic Congresswoman Rashida Tlaib is among those who say that extraordinary circumstances require extraordinary responses.
A couple of days ago, Tlaib, who represents a district in Michigan that includes part of Detroit, introduced a bill in the House of Representatives to make life easier for people during the COVID-19 crisis. She proposed sending everyone a debit card loaded and then reloaded with at least $1,000 (€914) every month “until one year after the end of the coronavirus crisis.”
You could call that a basic income, and the very idea sounds fairly intriguing. However, just how the measure is meant to be financed looks more than a bit bizarre to many. Tlaib proposes minting two platinum coins with a face value of $1 trillion each.
To many observers it looks like one of the wackiest proposals ever pondered in the context of easing America’s financial woes. While some are still debating just how much money will be required in terms of aid packages in the US, others are warning of the financial fallout of increased spending.
For the first time in US history, public debt could hit the $25-trillion mark this year. Several trillions are needed to cushion the impact of the coronavirus alone. But because the US administration is not allowed to have the Federal Reserve print or rather digitally create more money just like that, it usually issues new sovereign bonds.
But there’s another option, says Rashida Tlaib, basically because of a legal loophole still in place.
While the US Treasury Department is not allowed to mint coins made of copper, silver or gold, it is allowed to mint platinum coins and make them legal tender. This goes back to a 1997 law originally relating to commemorative coins. There are no known restrictions as to the face value of such coins as long as they contain a certain amount of platinum.