Treasury Secretary Janet L. Yellen expects that at some point on Oct. 18, the federal government will no longer be able to pay its bills, triggering what she has described as “catastrophic” aftershocks for the economy, including a likely recession. Which means that, as of midnight on Wednesday, we have about 288 hours in which to either raise the limit on government debt — the so-called debt ceiling — or to dramatically reduce the debt enough that the ceiling no longer poses an immediate threat of financial chaos.
You know, by making a small coin worth $1 trillion and dropping it in the government’s bank.
Perhaps you’ve heard of this idea. As the debate over the debt ceiling has unfolded (and thanks in no small part to the seeming endlessness of that debate), this idea has cropped up repeatedly. In some cases, it’s clearly half-joking commentary on the nature of money itself that it’s even feasible for the government to simply make a coin that suddenly puts $1 trillion in its pocket. But it’s often entirely sincere, with some members of Congress embracing the idea as a feasible solution for lowering the debt.
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So let’s take it seriously. Let’s determine the absolute last minute at which the coin could be minted in order to stave off monetary ruin.
How the coin works
The Washington Post’s Jacob Bogage had a good Platinum Coin 101 on Tuesday. In short, it hinges entirely on that descriptor: platinum.
The short version of the story is that former Delaware congressman Mike Castle (R) wanted to help collectors of commemorative coins. So, in 1995, he introduced legislation giving the Treasury Department more flexibility in the coins it could produce. That resulted in the Commemorative Coin Authorization and Reform Act of 1995, which allowed the department to “mint and issue bullion and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
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Perhaps you noticed the inclusion of the word “denominations.” So the Treasury Department could simply authorize the creation of a platinum coin with the face value of $1 trillion — thereby creating $1 trillion in cash. Take that coin and deposit it in the government’s bank, the Federal Reserve, and you’ve got an additional $1 trillion to use to, say, pay off $1 trillion in debt. And, then, to accrue $1 trillion more in debt before hitting the ceiling.
How the coin is made
There are obviously a lot of economic and political arguments to be had over the feasibility and effects of doing this. Bogage goes into some of them if you’re interested. But we’re not interested in that here. Instead, we’re interested in how long it would take to make this happen. Meaning, one, how long would it take to make the coin and, two, how long it would take to get it to the bank.
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Happily, Axios’s Felix Salmon already answered the first question. He spoke with Philip Diehl, the former director of the U.S. Mint, who explained the logistics of creating the coin.
“The U.S. Mint, which Diehl ran from 1994 to 2000, already produces a one-ounce Platinum Eagle and has no shortage of platinum blanks already in stock,” Salmon reports. “Producing a trillion-dollar Eagle would require only the denomination to be changed,” a matter of updating a plaster mold of the existing coin and then creating the resin mold needed for its actual minting.
“At that point,” Salmon says, “a coin could be struck in minutes at the West Point mint.”
How we get it where it needs to go
Okay. So now it’s time to get into the weeds.
The “West Point mint” to which Salmon refers is a facility near the U.S. Military Academy at West Point, N.Y. It sits about 50 miles due north of New York City, where, as luck would have it, there is also a branch of the Federal Reserve Bank. Meaning that the fastest possible way to get our $1 trillion coin into the government’s hands would be to simply take it from West Point to the Federal Reserve.
The easiest way to do that is by helicopter. The mint sits conveniently close to a golf course, providing a very nice landing pad for our courier to board. If you leave the mint via the loading dock on its western side, it’s about 0.2 miles to the closest large green. Should take you about a minute to get there by car or slightly longer if the courier is running.
Then comes the helicopter flight. We’ll want something fast, but, luckily, we have the entire resources of the U.S. government at our disposal. So we can have the military’s fastest chopper, the Boeing CH-47 Chinook, fueled up and whirring before the courier even starts out the door. There are faster helicopters, of course, including the Sikorsky S-97 Raider that might eventually become the military’s fastest. But given that our goal here is to help push the debt down, we should probably try to be as frugal as possible.
So we have liftoff and traverse the 48-mile journey south at about 200 miles per hour, reaching Manhattan in about 15 minutes. (We’re adding in about a minute for takeoff and landing.) Luckily, there’s a helipad on the East River not far from the bank where we can set the bird down. (Most of my knowledge of helicopter lingo comes from watching “M*A*S*H.”)
Then it’s pretty straightforward. Get in a car, head north under the FDR on surface streets and take a left on Maiden Lane. The door to the bank is up on the left.
That’s about 0.7 miles, or a 6-minute drive. So, door-to-door, coin-to-bank, 22 minutes. There’s probably some paperwork that needs to be done at the Fed, but a lot of that can be done in advance.
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In fact, that’s a caveat that should apply elsewhere in this experiment. If we plan ahead — which we presumably would — we can make sure we clear the airspace along the Hudson River corridor and in Lower Manhattan to speed transit. We can clear the streets and speed the motorcade’s progress to the bank once the helicopter lands. We can have that Chinook sitting there on that green, with plenty of armed guards to keep our $1 trillion in cash safe.
But there is one thing for which we can’t necessarily be prepared: bad weather. It’s been a few years since it rained on the evening of Oct. 17 in the vicinity of West Point, though it has gotten pretty windy. The Chinook is obviously built to withstand all sorts of weather, but the point of this exercise is to be responsible stewards of our novelty coin, and so we must consider all possibilities.
The most feasible alternative to flying is driving. The route between the mint and the Fed is about 60 miles if you come down the Palisades Parkway in New Jersey and then over the George Washington Bridge.
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As of writing, that takes about an hour and 40 minutes, far slower than our helicopter flight. Of course, that’s near rush hour on a Wednesday. If we target arrival at the Fed at midnight on the morning of Oct. 18, Google expects that it would take as little as 70 minutes.
There’s another option, of course: boat. The mint sits relatively close to the Hudson River, and the Federal Reserve sits at the lower tip of Manhattan. Get a 250-mile-per-hour speedboat, which exists, and you can make the trip from the pier near West Point to Battery Park in about 13 minutes.
There are two big caveats here. The first is that weather too rough for a helicopter is not weather in which you’d want to be/could be flying along in a speedboat at 250 miles per hour. The second is that this adds time on both ends, getting the coin from the mint to the boat (about a 10-minute drive) and then from the Battery up to the Fed.
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The helicopter remains our best bet.
The hard deadline
So let’s say that we get everything lined up: air traffic cleared, our Chinook in place, our paperwork ready at the Fed, the streets cleared. And let’s further say that the deadline for receiving the $1 trillion is midnight on the morning of Oct. 18. That means that our safest bet for avoiding default on the full faith and credit of the United States is to start minting the coin at 11:30 p.m. on Oct. 17, getting it into the helicopter by 11:35 and inside the Fed by 11:57 p.m., just under the wire.
If you’re a particularly nervous type, throw in another 5 minutes for, say, getting out of the car in Manhattan or, I don’t know, letting the coin cool down before you grab it. That gives us until 11:25 p.m. on Oct. 17 to save the American economy.
Or Congress could just raise the debt ceiling as they always do. Either way.
Update: As this piece was being published, news broke that a deal may have been reached to suspend the debt ceiling until December. If that holds, simply shift the deadline to 22 minutes prior to midnight on whatever day would now spark the crisis. Easy as pie.