Sovereign governments such as the United States can print new money. However, there’s a statutory limit to the amount of paper currency that can be in circulation at any one time.
Ironically, there’s no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.
An excerpt from “3 ways Obama could bypass Congress” by Jack M. Balkin, Knight Professor of Constitutional Law at Yale Law School
In one of NMK’s own previous posts, Buffett of all people proposed an elegant way of incentivizing proper budgeting and appropriations by punishing the legislators rather than the American people. Can’t pass a budget with deficit spending of 3% or less? You’re no longer eligible to run for office. That’s brilliant.
When I read discussion about a proposed Balanced Budget Amendment it makes me assume there will be brinksmanship of the sort going on now at least once every year. That or a government shutdown. Just tell ’em they’re excluded from re-election if they can’t get the job done, and watch it magically get done.