WaPo
Bad news: Treasury rejects trillion-dollar platinum coin idea
That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.
The inclusion of the Federal Reserve is significant. For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.
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I doubt the final say would be up to them.
sharrukin on January 12, 2013 at 5:01 PM
The debt limit does not have to be raised to pay our…debt.
The Treasury receives more than enough each month in tax receipts to service our debt.
The only thing not raising the debt limit will do is force the government to spend only what it actually brings in.
Why should we continue raising the limit on the national credit card to enable more unfunded spending and debt?
If the Left want to spend more they need to make the case to the public that tax rates need to be raised to meet the expected level sending.
We will never get the public to demand spending cuts until the public is forced to face the bill for their demands.
Charlemagne on January 12, 2013 at 5:02 PM
Paul Krugman hardest hit.
BigGator5 on January 12, 2013 at 5:07 PM
Yes and Santa Claus isn’t real.
CW on January 12, 2013 at 5:07 PM
For the trillion dollar coin to “work” the Fed would have to print the trillion dollars when the Treasury deposits the coin with the Fed, since that is all coins get into circulation (which it would have to do to be used in any way).
Clearly, it’s un-Constitutional for the Executive branch to take control of money printing as that is a power delegated specifically to Congress and Congress couldn’t give that power to the Executive branch even if it wanted to – as the Constitution cannot be violated even with the assent of all government arms involved (in theory, of course, as we have seen the Constitution totally shredded over the past 4 years).
Of course, as per Benedict Roberts, Idiot extraordinaire, the Executive branch could just put a trillion dollar
penaltytax on some inaction (any inaction) and then record that trillion dollars as receivable and write checks against it …ThePrimordialOrderedPair on January 12, 2013 at 5:07 PM
Okay, so why doesn’t the fed just continue to monetize our debt by buying 70% of all treasury bonds sold by the government and printing our money and giving it to us in return? I don’t see how that’s any different that the coin trick.
Timin203 on January 12, 2013 at 5:09 PM
The difference is that the bonds that the Fed prints money up to “buy” cannot only be offered for sale by the Treasury if the debt limit is raised. If the debt limit isn’t raised, then Treasury can’t print new debt to sell to the Fed, which prints money to buy it.
It’s a question of where the power to print money resides. Cureently, it’s with the Fed which was charged by Congress (and given an insane dual mandate to run from). The trillion dollar coin insanity would give the power to print money for circulation to the Executive branch (which would be directing the Fed to print the money to pay for the phoney coins) which is a total abrogation of the Constitutional restrictions. The executive branch is not to have any control over the purse (other than being able to veto Congress’ budgets and other bills) and cannot direct the monetary system (outside of nominating Fed governors that Congress has to confirm.
of course, we have totally left our Constitution in the dust, so all this talk about Constitutional limits and such is fairly meaningless during the Imbecilic Reign of the Indonesian … but this is how things are supposed to work.
ThePrimordialOrderedPair on January 12, 2013 at 5:16 PM
Grrrr … “can only be offered for sale by the Treasury if the debt limit is raised.”
ThePrimordialOrderedPair on January 12, 2013 at 5:18 PM
I’m guessing they are OK with creating a Tin coin for say, oh, $250 T Heck, they they could roll out the $1M (for Michelle) and $1B (for Biden) dollar bills, right?
With the Tin God portrait on it, perhaps?
/sarc
ProfShadow on January 12, 2013 at 5:18 PM
Yeah, I know how it works, but why is a platinum coin any more objectionable to our current system, which is just a crazy? We all know the debt ceiling will be raised / Obama will ignore it, but monetizing our debt is the real issue here.
Timin203 on January 12, 2013 at 5:24 PM
They couldn’t fit Obama’s ego on a small coin.
moonsbreath on January 12, 2013 at 5:30 PM
No. The issue here is who has the power to print money, and the Executive branch most definitely does NOT have that power and cannot be allowed to have it in any way, shape, or form. If the Executive took that power then Congress would no longer have the power of the purse.
The Fed printing money and the Executive branch printing money (by making phoney coins and directing the Fed to print up and give them as much money as Barky thinks he wants) are two very different things.
I’m not saying that monetizing the debt (an increasing debt, at that) is anything but a stupid thing to do in this environment, but the question of who has the power to do it and direct the printed money is a serious one. If the Executive branch were to take that power then Congress wouldn’t have anything to do anymore as the Executive branch could just print up all the money it wants to spend and would never have to worry about Congress appropriating any funds, at all.
ThePrimordialOrderedPair on January 12, 2013 at 5:37 PM