Why are the consequences of minting a trillion dollar coin so much worse than the consequences of default?
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It’s not something you want to rely upon as a solution to the debt ceiling standoff.
The trillion dollar coin situation is a true loophole. The Treasury has the ability to mint new platinum coins without Congressional approval because platinum coins are collectors items, and Congress didn’t want to bother with voting on each individual design. It’s very clear that this was not intended to actually have an impact on fiscal policy at the level a trillion dollar coin would have.
This means that if the Treasury went ahead and minted the coin, there would be a legal challenge, and it’s not clear who would win. If Treasury loses and the debt ceiling has not been raised, then the US immediately defaults, and all the bad things we’re currently trying to avoid happen. Much better to actively pursue an agreement that actually resolves the standoff (for now) than to hope that a small panel of judges (perhaps eventually the Supreme Court, and you know how those guys are) is willing to put up with your loophole for the good of the economy.
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