The Secret History of the Trillion Dollar Coin
Just when you thought you knew everything about the trillion dollar platinum coin, you may be surprised to find out that there's more mileage than you had imagined behind the quick-fix idea for the debt ceiling
Ryan Tate at Wired explains the deep history of the idea.
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.
Bringing things around full circle, the author of that article, Scott McCartney, now has a blog post titled "Do You Get Miles With That Trillion Coin?"
My coin story, which was one of the most-viewed of the year on WSJ.com, showed how frequent-flier-mile fanatics took advantage of a free-shipping offer from the Mint, which was trying to get more $1 coins into circulation. Dollar coins last longer than dollar bills and so the government could save money if $1 coins became more widely used.
Mileage mavens charged their coin purchases to credit cards that give miles as spending rewards. When the coins arrived, they were simply deposited in banks and used to pay credit card bills. Since there was no shipping or handling charges and the coins were sold at face value, the miles were free.
Several hundred people jumped on the offer to essentially print free frequent-flier miles. Mileage lovers ordered more than $1 million in coins before the Mint started to identify them and cut them off. But some buyers scored big before the program was changed, using multiple cards and addresses. One buyer in the story who asked to be identified by his online name "Mr. Pickles" had a sophisticated set-up and churned $800,000 in coins.
Today, the Mint sells boxes of 500 $1 presidential coins for $550.95, making it unappealing for mileage purposes.
I have long found the creativity and passion of frequent-flier mileage enthusiasts to be inspirational. It's good to know that serious students of fiscal policy do, too.
McCartney has been writing The Middle Seat travel column for the Journal since, like, well forever. I suggest everyone start reading through his old copy. Who knows what other genius ideas he has hidden away under the guise of writing about travel and airlines?
The platinum coin, of course, is the workaround for the debt ceiling. The idea is that the Treasury would mint a trillion dollar platinum coin and deposit it with the Federal Reserve, obviating any funding shortage arising from the inability to raise new debt.
Whatever you think of it, former car czar Steve Rattner is no friend of #mintthecoin. "The $1 trillion coin is the dumbest idea since pet rocks #fiscalcliff," the co-founder of Quandrangle Group tweeted Friday.
One thing: pet rocks weren't a stupid idea. They were a hugely profitable idea.
In the first six moths, the inventor of the pet rock made $15 million, according to Alyson Shontell.
Follow me on Twitter @Carney