Vicious circle of debt biggest problem ahead U. S. economy

U. S. Treasury Secretary Janet Yellen warned U. S. lawmakers that the federal government may run out of cash by 18 October, unless the US Congress suspends debt limits.

Some politicians speculated that one potential way out is to mint a $1 trillion platinum coin and then deposit it with the Federal Reserve. That would allow the president to get an additional $1 trillion to pay off the country’s obligations without suspending debt limits.

The US Mint announced that the coin could be minted within hours of an emergency decision by Yellen, but the latter rejected the proposal, denouncing the $1 trillion coin plan as a gimmick.

The platinum coin concept is not new, it is technically possible and quite legal. The idea first emerged during the US debt ceiling crisis in 2011.

Yellen’s view is supported by several U. S. professors and practitioners who call the $1 trillion coin a plan to circumvent the existing laws.