Deep thoughts: Is the platinum coin scheme even legal?
posted at 3:26 pm on January 10, 2013 by Guy Benson
Virtually everyone seems to agree that minting the fiscal equivalent of magic beans is patently insane and embarrassing — excepting a klatch of hard Lefties, which may or may not include the White House, of course — but would the idea amount to a constitutional or statutory violation? Attorney Gabriel Malor doesn’t think so, even though he hates the concept as much as the next guy (via Ace of Spades):
Congress has also set on the Secretary a guiding principle for the minting of all coins: “The Secretary of the Treasury…shall mint and issue coins…in amounts the Secretary decides are necessary to meet the needs of the United States.” Note the word “shall” in the preceding mandate. Congress has also set on the Secretary some discretionary authority, namely he may borrow on the credit of the United States, but not more than the debt ceiling. And he is obligated to transfer to federal agency sub-accounts amounts appropriated by Congress in its occasional appropriations bills. [John] Carney thinks this isn’t enough of an “intelligible principle” to guide the Secretary’s discretion when it comes to the platinum coin. I am here to tell you that if it went to the Supreme Court, the justices would say this was more than enough (with Justice Thomas dissenting). The Supreme Court has upheld broad grants of generalized authority to executive agencies for sixty years now and this is no different. See, for example, the FDA, the IRS, and HHS…Congress very specifically stated in the statute that bullion gold and silvercoins must be valued at the market value of the metal plus costs. That is extensively prescribed by statute. Congress placed no similar restriction on the value of a bullion platinum coin and, in fact, Congress dropped from the proposed statute such a provision when it considered it in 1995. Unlike for gold and silver bullion coins, Congress left the value of a bullion platinum coin up to the Secretary…In short, the platinum coin trick an unnecessary idea and a bad one, but it is not, as some have argued, unconstitutional or illegal.
Malor links to an especially colorful rant from the typically genteel Megan McArdle, a portion of which made the cut for AP’s QOTD post on Tuesday. It’s really worth a full read. On CNBC last night, Larry Kudlow argued that the Super Coin is not only a “third world, banana republic idea,” but illegal on its face. I dissented, making the case “in favor” of the coin, tongue planted firmly in cheek:
Just imagine the investments in our children’s future™ we could make with that surplus, guys. Seventeen special pieces of platinum is all it would take. If we’re going to totally jump the shark, why not go for the
gold platinum, liberals? And before you fill up the comments section with corrections, yes, I realize that the coin(s) under discussion wouldn’t actually go into circulation. They would merely act as a temporary interest-free loan that would further delay the debt limit reckoning. That money would have to be borrowed or otherwise presented eventually. The key point here is that S&P downgraded our AAA credit rating for the first time in US history despite Washington’s compromise and subsequent debt limit increase. The ratings agency’s stated rationale was an indictment of our fundamental unseriousness of purpose and systemic political dysfunction on the matter of genuinely addressing the underlying problem. Minting trillion dollar coins would drag that unseriousness to farcical new lows.