SALON

Sunday, Jan 6, 2013 4:00 PM UTC

Why not mint a trillion-dollar platinum coin?

It may be silly, but the idea of lurching from one manufactured economic crisis to the next is a lot sillier

By

Topics: AlterNet, Mint the Coin, Platinum, Debt ceiling, Fiscal cliff, Business, ,

Why not mint a trillion-dollar platinum coin?
This article originally appeared on AlterNet.

AlterNet It’s bizarre how people distinguish between serious and unserious proposals.

With another debt-ceiling show-down looming, talk of the ‘platinum coin option’ – declared deeply unserious in 2011 – is once again gaining some traction. Here’sJosh Barro over at Bloomberg:

I’m glad to see Representative Jerrold Nadler lending his support to the idea that PresidentBarack Obama should avert a debt-limit crisis by issuing large-denomination platinum coins, as permitted by 31 USC § 5112.

In case you’re not familiar with this idea: In general, the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve’s control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination.

This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government’s bills, in lieu of issuing debt.

Most argue that we should just issue a $2-trillion dollar coin and be done with it. Barro’s suggestion is a little more elaborate:

If Republicans start issuing a list of demands that must be met before they will raise the debt ceiling, Obama should simply say that he will issue platinum coins as necessary to pay government bills if he cannot borrow. But, to avoid causing long-term inflation expectations to skyrocket, he should pledge that he will have the Treasury issue enough bonds to buy back all the newly issued currency as soon as it is allowed to do so.

And then he should offer to sign a bill revoking his authority to issue platinum coins — so long as that bill also abolishes the debt ceiling. The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations.

At Mother Jones, Kevin Drum acknowledges that the law permits the treasury to issue such a coin and then scoffs at the notion:

I would just like to point out, once again, that this is ridiculous. During the very short floor debate on this amendment it was repeatedly referred to as a “technical correction,” and that’s obviously what was intended. Oklahoma Rep. Frank Lucas described it this way:

Also contained in the bill is a clarifying section inserting the word ‘‘platinum’’ inadvertently dropped when Congress authorized production of platinum and platinum bullion coins a few years ago….This is a small bill, but important to the mint and important to coin collectors. It has no cost implications whatsoever.No particular restrictions were placed on the design or issuance of platinum coins, but this paragraph was plainly intended to apply to bullion and commemorative issues for coin collectors. That’s all.

There is, apparently, a widespread belief that courts will uphold a literal, hypertechnical reading of legislative language regardless of its obvious intent, but I’m quite certain this isn’t true. Courts are expected to rule based on the most sensible interpretation of a law, not its most tortured possible construction. I don’t think there’s even a remote chance that any court in the country would uphold a Treasury reading of this law that used it as a pretense for minting a $1 trillion coin. [Emphasis: mine]

I say: do it, and let the chips fall where they may. Who knows where the courts land, or even if the GOP has the chutzpah to take the case to court at that point in the game? Courts certainly can and do rule on narrow technicalities, and the threat of a global economic meltdown is a pretty strong incentive.

But it should also be on the table because there is nothing more ridiculous than a congressional minority threatening the economy by trying to extract unpopular concessions in exchange for paying the bills that Congress itself already ran up. Let’s not pretend this is normal behavior we’re dealing with.

In fact, let’s not pretend it’s Constitutional. Section 4 of the 14th Amendment says, “The validity of the public debt of the United States…shall not be questioned.” That’s not terribly ambiguous.

And here’s the oath of office every member of Congress pledges to uphold:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.

More Joshua Holland.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 46 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

Salon is proud to feature content from AlterNet, an award-winning news magazine and online community that creates original journalism and amplifies the best of hundreds of other independent media sources.

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Brad Pitt keeps breaking his silence on how boring marriage to Jennifer Aniston was
18 points19 points | 26 comments
vote
GOP opposes right to vote - Iraq's new constitution has something America's doesn't: The right to vote. Republicans want to keep it that way
19 points20 points | 5 comments
vote
Marijuana opponents’ new plan: Kill First Amendment After failing to stop Colorado from legalizing it, pot foes now want to criminalize drug images and media content
14 points15 points | 1 comment
vote
The right to vote is the foundation of any democracy. Yet most Americans do not realize that we do not have a constitutionally protected right to vote.
12 points13 points | 5 comments
vote
Report: Nearly a quarter of all Americans struggle to afford food
17 points18 points | 5 comments

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations