Friday, January 11, 2013
Meet the Genius Behind the Trillion-Dollar Coin and the Plot to Breach the Debt Ceiling
It was a December 2009 Wall Street Journal article that ultimately inspired the Georgia lawyer known online as “Beowulf” to invent the trillion-dollar coin.
The article, “Miles for Nothing,” detailed how clever travelers were buying commemorative coins from the U.S. Mint via credit cards that award frequent flier miles. The Mint would ship the coins for free and the travelers would deposit them at the bank, pay off their cards, and accumulate free miles.
More than six months later, during a wonky online discussion about the debt ceiling, Beowulf thought of the article and, egged on by fellow monetary-system obsessives, came up with his own clever plan to exploit the powers of the U.S. Mint. His idea to issue a single trillion-dollar coin to the U.S. Treasury, thus letting it avoid borrowing and bypass the debt ceiling, is now much discussed among Washington elites, including at the White House, where a spokesman Wednesday wouldn’t rule out the scheme.
It’s been a remarkable journey. The path of the trillion-dollar coin, as Beowulf described it to Wired, began with a “silly question” in a “pointless … online bull session” in the comments section of financier Warren Mosler’s blog. Anonymous supporters helped spread the concept to the comments of other economics blogs and ultimately into posts on such sites. The idea soon attracted attention from more prominent liberal economists like James Galbraith and Paul Krugman, and then from writers like Matthew Yglesias and Ezra Klein. From there it was a short hop into the center mainstream. NBC’s Chuck Todd hammered a White House spokesman about the coin possibility on Wednesday.
If the president uses such a coin to bypass intransigent Republicans who refuse to raise the debt ceiling, or even if he merely uses the possibility of such as leverage in negotiations, it will underline how ad-hoc online communities, like the anonymous international band of commenters to which Beowulf belonged, are increasingly able to move their ideas from the fringes into the middle of political debate. It’s one thing for bloggers to help bring down a Mississippi senator or to embarrass a presidential frontrunner, as they have in years past; it’s quite another for commenters to re-engineer the funding of the entire federal budget.
Their initial ambitions weren’t nearly so grand, to hear Beowulf tell it. (Though Beowulf’s real name is relatively easy to discover online, he spoke to Wired on the condition that we leave it out of this story.)