Hey, let’s avoid the debt-ceiling standoff by minting a trillion-dollar platinum coin instead

posted at 4:23 pm on January 4, 2013 by Allahpundit

Words cannot express my excitement that this banana-republic idea is now being taken seriously enough to attract vocal support from a sitting Democratic congressman. If you’re looking for a way to convince the public that the left has no interest whatsoever in reducing spending before we face a fiscal meltdown, you can’t do better than having Obama and Geithner respond to the GOP’s demand for cuts by producing a de facto handful of magic beans.

In fact, that’s my condition for supporting this proposal. I’ll back it to the hilt, but only if the masterminds behind it figure out a constitutional way to let Treasury choose beans as the trillion-dollar currency instead of a coin. That’ll show those Republicans.

“There is specific statutory authority that says that the Federal Reserve can mint any non-gold or -silver coin in any denomination, so all you do is you tell the Federal Reserve to make a platinum coin for one trillion dollars, and then you deposit it in the Treasury account, and you pay your bills,” Nadler said in a telephone interview this afternoon.

I asked whether he was serious.

“I’m being absolutely serious,” he said. “It sounds silly but it’s absolutely legal. And it would normally not be proper to consider such a thing, except when you’re faced with blackmail to destroy the country’s economy, you have to consider things.”

By “things,” he means magic coins, not Medicare reform. Over at National Journal, a jittery Matthew Cooper wonders if the optics of all this might not be counterproductive for Democrats:

As bad as the House behavior has been, using a small legal provision meant to please numismatists to leverage the nation’s debts seems, um, risky. The only analogy I can think of is the Court-packing mess of the 1930s when President Roosevelt, faced with a cranky Supreme Court that overturned his social-welfare programs and those in the states, tried to enlarge the size of the Court to fill it with more sympathetic appointees. After an outcry, the president backed down. But FDR at least tried to make the change by proposing a statute and forcing a Senate debate. (The bill never cleared the chamber.)

Minting the coins would seem even more imperious. After all, the Supreme Court in the 1930s was knocking down state minimum-wage laws and other expressions of the popular will. FDR had some momentum behind him. But President Obama would look despotic if he embraced this tactic. (Imagine all the pictures of King Obama on a coin.)

I assume the reason they’re thinking about a coin worth “only” a trillion instead of $10 trillion is because, you see, a $10 trillion coin would be exorbitant and sound crazy.

Via Mediaite, here’s Rick Santelli proving his extremism by wondering why people who refuse to mindlessly extend the nation’s line of credit while we’re on an unsustainable fiscal track are the “lunatics” in this debate. Exit question: Am I giving American voters way, way too much credit in thinking they’d laugh at the trillion-dollar coin idea? At this point, given the results in November, what’s the best result poll-wise we could hope for? 55-45 against?


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Comment pages: 1 2 3 4

Here’s what I don’t understand about this idea: If the point is to mint a “trillion dollar coin” and put it in a Fed vault and never spend the money, why not just print one trillion one dollar bills (which we can do whenever we want) and put them in the Fed vault and not spend them? Why does it have to be a single silly coin?

jdp629 on January 6, 2013 at 11:31 AM

I’m OK with it as long as the coins are in Al Gore’s lock-box and that Sandy Berger is guarding it. Also, let’s make sure that Goldman Sachs monitors the coin making so that nickel isn’t mixed in with the pure platinum. Andy Stern should be in charge of certifying that only union labor was used to mint the coins to the expected government standard.

But, if errors are made in the process, the reject coins, as collectors know, can often be worth much more than face-value, an added bonus for the nation.

I have one teeny concern about the effect on vending machine industry – they may need some time to update their technology, but other than that let’s go for it!

virgo on January 6, 2013 at 10:30 PM

Why does it have to be a single silly coin?

jdp629 on January 6, 2013 at 11:31 AM

To maintain the illusion that it’s different from the paper money, and keep down public panic. John Q. Citizen will (hopefully) think “oh hey, that’s a big fancy coin worth $1 trillion, my money is worth just the same”.

It’s as thin and silly as JohnGalt’s idea that we should keep cowering to the Democrats in order to win somehow, but that’s basically what they’re counting on.

MelonCollie on January 7, 2013 at 11:14 AM

Here’s what I don’t understand about this idea: If the point is to mint a “trillion dollar coin” and put it in a Fed vault and never spend the money, why not just print one trillion one dollar bills (which we can do whenever we want) and put them in the Fed vault and not spend them? Why does it have to be a single silly coin?

jdp629 on January 6, 2013 at 11:31 AM

It is a slight of hand attempt to create “collateral” in the Fed which would obviate the need to actually go out and “borrow” money from anyone — the Fed would still print the trillion dollars but now it would be “collateralized” (i.e. perhaps similar to when dollars were backed by gold). It would be no different than the Weimar Republic printing marks to pay for stuff (or as you wrote, just print the dollars) and the result of the effort could be just as bad.

But the proponents usually don’t really understand what they are doing.

Russ808 on January 7, 2013 at 4:39 PM

Why has no one pointed out the fact that the Simpsons came up with this same plan in 1998?

http://en.wikipedia.org/wiki/The_Trouble_with_Trillions

alan8228 on January 9, 2013 at 11:35 AM

Comment pages: 1 2 3 4