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The idea of using an obscure provision of a 1996 law about platinum coinage to defang the debt ceiling was aired back in 2011 during the first ceiling crisis, but it never attracted much mainstream attention, much less endorsement.  All that has changed in the past few weeks.  The idea received extensive coverage on CNN a few days ago, and Krugman has come out as intrigued, if not clearly for it.

The idea is that we happen to have this law on the books, which says the administration can mint platinum coins in denominations of its choosing, and add to the Treasury the difference in value between the cost of producing the coins and their face value.  The plan is for the president to order a one trillion, or five trillion, or even a sixty trillion, face-value coin to be minted, and its value credited to the Treasury so that the national debt will be instantly one, or five, or sixty trillion less than it was before.  This drop in the debt will bring it safely under the ceiling, and thus the potential of default if the debt ceiling is breached will be averted.

Would this idea work?  Would it be a good idea even if it did?

Let's turn this notional platinum coin over a few times in our minds, to see what we can conclude about its true worth.  

For starters, the 1996 law concerning platinum coinage was very clearly not intended to allow trillion dollar coins.  That law concerned the trade in coinage, and allowed for the US to make some small profit therefrom.  Why let the Franklin Mint corner that market?  The law was clearly not intended to allow the president to add a trillion to the Treasury entirely at his pleasure, without Congressional approval.

The attempt to use laws in ways that they were not intended to be used can end poorly for any number of reasons.  Even if this doesn't get slapped down by the courts as a disallowed misuse of the law (and the courts may not become involved in this case for reasons of standing), playing fast and loose with the law is likely to appear to public opinion to be -- playing fast and loose with the law.  If the House is misusing the ceiling law to force the US into default, the correct response is to not go along with that misuse, not to come up with some offsetting abuse of some other law.

Much worse than being a distortion of the coin law, having the president mint a trillion dollar coin to add to the Treasury violates one of the fundamental structural principles of the federal govt as set down in the Constitution.  Money goes into the Treasury from taxes and borrowing only by public law, and it goes out of the Treasury as spending only by public law.  While it is true that the president would have to usurp both ends of that equation, and we would need to add to this ability the platinum coin gives him to control revenue without Congress, the power to spend without Congress, before we had a complete presidential dictatorship -- going "only" half-way to dictatorship is still about as monumentlally unacceptable a power play as you could come up with.

Direct legal or political consequences aside, none of us should even consider givng the president even just one end of the power of the purse.  Only think of giving Obama this power if you would be happy to see the next Dubya enjoy the freedom to add trillions to the Treasury at his sole pleasure, for whatever purpose he might have in mind.  

But of course, there would be very prompt and direct consequences, disastrous consequences, to trying the coin gambit.

Slapping down this egregiously unconstitutional power grab is perhaps the only scenario which sees SCOTUS willing to touch this whole debt ceiling mess with a ten foot pole.  They would not want to get involved with the status of the ceiling law itself, and what it entails, but this coin thing could be shot down as a a clearly severable issue that wouldn't drag them into the wider issues of the ceiling law mess.  D-friendly justices on the Court might be inclined to not get involved so as not to hurt our side, but the R-firiendly majority can force the SCOTUS to hear the case.  And once forced to issue an opinion, even the D-friendliest among them will vote the coin down as clearly unconstitutional.  The decision would be 9-0, so we wouldn't even be able to blame it on the Federalist Society, as we can with Citizens United and Bush v Gore.

Caught red-handed trying to usurp half of Congress's power of the purse, and slapped down by a 9-0 decision, our side would then be maximally vulnerable to whatever the other side wanted to demand.  We would only be saved from total public policy disaster insofar as the Rs don't really want any public policy out of this, they really only want to see the Ds humiliated.  They would get plenty of that if we tried this coin gimmick.

Think of it this way.  At the end of the day, whatever our side does has to be made to seem fair and reasonable to the electorate.  That should be doable even if our response to a breach of the ceiling is that Treasury keeps on borrowing enough to pay all of our legal obligations.  

It's common sense that you can't use laws in ways that were not intended.  Our side needs to hammer away at this in respect to what the House is doing with the ceiling law.  Yes, the ceiling law presents the appearance of forbidding Treasury to go on borrowing after the ceiling is reached.  And perhaps when the first such ceiling was passed, when that ceiling was the only Congressional limit on borrowing by the Treasury, the ceiling actually did have the force of law blocking borrowing that exceeded the ceiling.  But we have since started consolidating our revenue and spending into the annual budget process.  The real debt limit now is whatever Treasury has to borrow to meet all US obligations created by the annual budget laws.

What the Rs are doing now is trying to use the outdated, ceremonial, debt limit, a limit since replaced as the real limit by the budget process, to let just one chamber of Congress usurp the power to repeal spending committments that only the full Congress possesses.  This very same House has already voted, when it approved the budget we're working under right now, for all the spending  that they now claim they have the right to unilaterally force the US to renege on.  That's obviously wrong.  The law -- and we have to consider all the statutes together when we talk about the law, because the ceiling statute doesn't make all the statutes obligating spending go away -- doesn't just allow Treasury to borrow beyond this obsolete formal ceiling, it requires Treasury to borrow as much as it has to to meet the true debt limit of the US in 2013, which is whatever borrowing is needed to meet all of our legal obligations.

The administration, understandably, would rather not be put in a position of even seeming lawlessness by having to ignore the ceremonial ceiling.  So they trumpet to the skies that default will happen if the ceiling is breached, they reject all alternatives.  They cannot, until the breach is upon us, relent on that line, that ceiling breach means default, because to do so would allow the House to just go for a no-cost breach.  The Rs would know that there would be no US default arising from a breach, and therefore would have no downside to putting the admnistration into a position of seeming lawlessness when Obama orders Treasury to keep on issuing debt.  And, in all probability, this strategy will work, the House will not follow through and refuse to pass a clean rise in the ceiling.

But our side needs to be ready for war in case deterrence  doesn't work.  And we win that war for public acceptance of the Treasury simply ignoring the ceiling, by educating the public.  It is inherently difficult, under most circumstances, to educate the public about such matters as the annual budget process, much less the history of federal budget practices, because they really could care less about the details of something that, however important, is working well enough without their attention.  Most people could care less about the details of how the sun produces all that heat and light, however much they depend on that bounty continuing, because astrophysical processes seems to manage quite well on their own producing that bounty without any attention from any of us.  But if the House makes the public care by threatening them with the  immediate disastrous real-world consequences of default, that will be one of those rare teachable moments, and I for one trust that the public will rise to the occasion.

Will we rise to the occasion?  Somebody is going to have to be there explaining the budget process to the public if this is to have a happy ending, if the public is to be educated and reject this attempted coup by the House.  Are we going to be busy trying our own pathetic coup with this platinum coin gimmick, or are we going to be clear of mind ourselves about this issue, so that we can help the public get clear on it?

Treasury would go on borrowing under either the muddled platinum coin idea, or the clear-headed way of just ignoring the ceiling, so they're the same plan in that respect, what Treasury does.  But the clear-headed approach will be a lot easier to explain clearly to the public, than some obvious gimmick like the coin, even if SCOTUS doesn't shoot it down.

We're understandably worried right now.  We have an administration that offers as its only plan for dealing with House thuggery on the ceiling the hope that the other side will back down rather than send the US into default.  That might work -- with reasonable people, but that's not what we're up against, is it?  We fear that our leaders wlll once again give in because our side is the more reasable, the less willing to see the hostage killed.

Don't let those fears stampede you into muddled thinking, into placing your faith in miracle cures and legal gimmicks like the platinum coin.  You and I need to remain clear-headed in this crisis.  Let the other side use up all the panic in the room.  In the end, the administration will do the right thing, it will not default, it will have Treasury ignore the ceiling.  We need to be ready to do the right thing, get behind that solution, be ready to explain that outcome.  

Originally posted to gtomkins on Mon Jan 07, 2013 at 10:00 AM PST.

Also republished by Community Spotlight.

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Comment Preferences

  •  it's not giving the Pres the power of the purse (29+ / 0-)

    Congress authorized the expenses.

    Congress authorized the taxes.

    Congress authorized some debt but not enough.

    Congress authorized the platinum coin.

    One alternative, which you didn't make explicit, is requiring the President to cut expenses unilaterally when the debt limit is reached. That would be taking over the power of the purse.

    Another alternative is the President authorizing bonds unilaterally, which he definitely does not have authority to do. That would also be taking over the power of the purse.

    •  One of your steps is wrong (15+ / 0-)

      Congress didn't authorize a trillion dollar coin.

      Size matters.  Congress does not unconstitutionally delegate its power to appropriate public money when it lets me make purchases from a $100  office supply fund at my discretion.  It does create an unaccpetable delegation if it passes a law that delegatse control over how a trillion dollar office supplies fund is spent.

      Don't invent magic loopholes and expect courts to just let you walk away with a cool trillion.

      And yes, I do mention that the reason that the right way to meet a breach in the ceiling is to ignore it, is that the spending authorized in the annual budget bills is all legally required.  Treasury cannot fail to make all the payments required by law, or yes, it would usurp the power of appropriation that is Congress's alone.

      You're not allowed to violate the law to counter an illegitimate act by others, and certainly not if there are lawful ways to counter the threat.  The coin is not lawful.  Ignoring the fake, ceremonial ceiling in order to observe the true one, whatever sum has to be borrowed to meet all spending obligations is lawful, is required by law.

      The statutory scheme in place does indeed require Treasury to borrow whatever sums are needed to pay all obligations.  That is the actual, effective debt limit of the US, and has been the actual debt limit since we started having annual budget reconciliation bills as our means of controlling and reconciling spending and revenue.

      This debt limit we keep voting on, is a vestigial remnant, no longer functional, of an earlier stage in how the US controlled spending and revenue.  We started out with dedicated revenue sourcing, some tax or some fee or some bond issue voted on separately by Congress, for each of our programs voted into existence by Congress.  That sort of stovepiping is obviously a bad idea, and as  govt grew, we needed to have more order and control.  The debt ceiling was the first, crude, limit put in place when Treasury was delegated the authority to issue bonds without having them individually approved in their own individual statutes (a neccessary limit, since Congress can delegate its powers only if the delegatiion is properly limited).  It was a sort of touch-tap method of generating revenue, that would force Treasury to come back for more as the needlel started to get to empty.  But that limit is no longer needed, as now we control revenue and spending by the annual budget process.  Treasury's constitutionally mandated limit, the one it has to follow, is now whatever it has to borrow to meet current obligations.  That's the real limit.  Anything under that limit is not a usurpation of the sole Congressional power to let US debt, it is in fact all required under the current legislative scheme in ordeer that Treasury not usurp the power of appropriation, as it would have to do, if it were forced to prioritize spending in the aftermnath of following the outdated debt limit instead of the current one.  

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 10:53:58 AM PST

      [ Parent ]

      •  US Constitution: Article I Section 8 (6+ / 0-)
        The Congress shall have the power ... to borrow money on the credit of the United States;
        The debt limit is not a fake, ceremonial ceiling. It's a Congressional power. The President can't usurp it by issuing debt on his own authority.
        •  Jack Balkin a prominent constitutional law prof (13+ / 0-)

          has a collection of articles on his blog Balkinization addressing three different options.

          Link

          Briefly,

          Sovereign governments such as the United States can print new money. However, there's a statutory limit to the amount of paper currency that can be in circulation at any one time.

          Ironically, there's no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds.

          The government can also raise money through sales: For example, it could sell the Federal Reserve an option to purchase government property for $2 trillion. The Fed would then credit the proceeds to the government's checking account. Once Congress lifts the debt ceiling, the president could buy back the option for a dollar, or the option could simply expire in 90 days. And there are probably other ways that the Fed could achieve a similar result, by analogy to its actions during the 2008 financial crisis, when it made huge loans and purchases to bail out the financial sector.
          Assume that the platinum coin and exploding option strategies are not available. What else can the president do?

          Like Congress, the president is bound by Section 4 of the 14th Amendment, which states that "(t)he validity of the public debt of the United States, authorized by law . . . shall not be questioned." Section 4 was passed after the Civil War because the framers worried that former Southern rebels returning to Congress would hold the federal debt hostage to extract political concessions on Reconstruction. Section 5 gives Congress the power to enforce the 14th Amendment's provisions. This does not mean, however, that these provisions do not apply to the president; otherwise, he could violate the 14th Amendment at will.

          Section 4 requires the president not to put the validity of the public debt into question. If the debt ceiling is not raised in time, there will not be enough incoming revenues to pay for all of the government's bills as they come due. Therefore he has a constitutional obligation to prioritize incoming revenues to pay the public debt: interest on government bonds and any other "vested" obligations.

          A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

          by No Exit on Mon Jan 07, 2013 at 11:34:32 AM PST

          [ Parent ]

          •  the 14th is the key. I agree with the diarist (6+ / 0-)

            that the coin idea is totally fraught.  Even if it weren't deemed unconstitutional by the SCOTUS, it's very bad PR.  the GOP would be able to point to the coin, an object in the real world with a huge media footprint, and say

            "Obama just singlehandedly increased our debt by x trillion dollars."
            the visuals are devastating since we now have the GOP fully on the hook for trying to kill our economy.

            No, the best thing is to fall back solidly on the 14th amendment whose language is as clear as a bell.  The debt ceiling, even before it is broached, clearly calls the validity of the US's public debt into question.  The Debt Ceiling construct is unconstitutional.  Period.

            "Well, yeah, the Constitution is worth it if you succeed." - Nancy Pelosi // Question: "succeed" at what?

            by nailbender on Mon Jan 07, 2013 at 04:09:28 PM PST

            [ Parent ]

            •  The 14th Amendment is directive to all branches. (4+ / 0-)

              Including Congress. The 14th trumps Congress's third law on the subject - the debt ceiling law Congress passed sometime early in the last century; the other two being Congress's two steps of authorizations and appropriations.

              The 14th does it for all branches. Since the Treasury Department manages and "issues" the debt, it's the one which is responsible for abiding by that directive. (So is Congress, but if it uses one of its own laws to avoid it, it can safely be ignored on Constitutional grounds.)

              To keep Congress's feet to the fire - better said, to keep the House GOP's feet to the fire - Obama & Co. needn't implement this until it has to. It shouldn't do it early, for like the ridiculous Big Coin notion, it will look like it takes the House Crazies off the hook and give them something else to rant about. (They will any way and surely call for impeachment, but let's not let 'em off the hook.)

              For my money (!), it would rile the money markets across the globe far less for the President to step up with the 14th and keep paying the bills Congress has already legislated, than to issue that Big Coin, a cheap, much too easy and utterly unnecessary slick trick.

              2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

              by TRPChicago on Tue Jan 08, 2013 at 05:21:19 AM PST

              [ Parent ]

            •  Err... (1+ / 0-)
              Recommended by:
              MPociask

              ...How does printing a trillion-dollar coin increase our debt?  It's not borrowed, it's money-ex-machina.  

        •  No (12+ / 0-)

          Congress has delegated that power to Treasury, it did so almost a century ago.

          Whenever Congress delegates one of the powers given for its sole use by the Constitution, it has to limit that delegation sufficiently to pass judicial review.

          Historically, the first such limit we used was the debt ceiling.  But more recently, we started limiting Treasury's use of its delgated authority to borrow by means of annual budget bills which consolidated all spending obligations under omnibus bills.  Treasury is now required by statute to borrow as much as is needed to meet all the current spending obligations specified in those bills.

          What would happen if the House refuses to allow a rise in that older limit, the debt ceiling, is that that limitattion would create an apparent contradiction in what Treasury is legally required to do in respect to borrowing.  In the face of an apparent contradiction in what the law requires of you, what you are supposed to do to is make every effort to intepret all these laws so as to resolve the contradiction.  Assuming that the lower debt limit applies, that Treasury has to stay under the old limit because it's lower, does not resolve the contradiction, because Treasury is still required to pay out each and every obligation to spend passed under the last set of budget bills.  The only assumption that allows the contradiction to be resolved is that the old debt limit has been superceded by the new, that the old limit is not in force.

          The president would not be usurping the power to borrow money if he instructs Treasury to ignore the old ceiling, because it is obviously no longer operative, and he still has delegated authority to borrow under the ceiling that is operative, the limit of however much has to be borrowed to meet spending obligations.  Further, the president is not allowed to instruyct Treasury to observe the old limit, because to do that would force Treasury to usurp the Congressional power of appropriatiion.  If Treasury were to fail to borrow the 40% of revenue now coming from borrowing, it would not be able to meet all spending obligations.  It would have to pick and choose which 60% of obligations to meet, and which 40% to fail to meet.  Treasury can't do that.   It's not Congress, it can't appropriate money to my pension and not to your salary.  It can only obey Congress's directions and pay us both, and to do that ti has to make use of its delegatrd authoruity to borrrow up to the new limit.

          It is not at all uncommon to have laws floating around that have no practical effect.  It's the law that it's now Reagan National Airport, but that doesn't mean you have to call it that, or that anyone has to call it that.  And a not uncommon reason for a law to have no actual effect to still be on the books, is that it's been superceded by new law, but nooone got around to repealing the old law.  In this case, the old limit was never done away with because deficit scolds love to use it as a soapbox, and it has seemed all these years harmless enough to indulge them.

          Of course it bothers reasonable people to enter into even the false appearance of lawlessness.  Of course you're reluctant to run up the Jolly Roger and take to a life of piracy.  The administration has the same reluctance.  We all hope that the real pirates in this scenario will cave, and Treasury will not have to actually deal with a breach in the old outdated limit.

          But they might not cave.  They are pirates.  We have to be ready to respond to whatever illegal insanity they throw at us, and that might include Treasury actualy having to ingore the old limit.  We need to be ready to explain that action if it happens.

          The states must be abolished.

          by gtomkins on Mon Jan 07, 2013 at 11:44:19 AM PST

          [ Parent ]

          •  Nice to see a responsible diary on this. (9+ / 0-)

            Minting a shady 'trillion-dollar coin' is not the solution, not now and not for the precedent it would set for the foreseeable future.

            Only think of giving Obama this power if you would be happy to see the next Dubya enjoy the freedom to add trillions to the Treasury at his sole pleasure, for whatever purpose he might have in mind.
            Exactly.  

            Join us at RASA: Repeal or Amend the Second Amendment. (Repeal will not ban guns, just help regulate them.)

            by Sharon Wraight on Mon Jan 07, 2013 at 02:00:05 PM PST

            [ Parent ]

          •  Incomplete (4+ / 0-)

            Congress gave the treasury to print reserve notes, true. But, in 1996 they delegated authority to the President to coin money. If dollar bills are constitutional, then so is the trillion dollar coin.

            Whether it's a good idea is a different issue.

            Show and don't tell. Demonstrate your point rather than explaining your point. -Rachael Maddow

            by galvarn on Mon Jan 07, 2013 at 03:32:21 PM PST

            [ Parent ]

          •  Even moreso..... (4+ / 0-)

            Congress has already clearly authorized the paltinum coin option.  

            So I think a good judge would likely rule not only that it's legal, but that the president is REQUIRED to issue coins in suffient denomination to fund the spending already passed by congress.  

            Not spending money which congress has already ordered spent is not a legal option when he has been already been given by congress the ability to finance that spending through coinage.  So long as he's permitted to issue the coins, there is no contradiction.  

            If the president doesn't issue the coin, someone should sue in order to force him to.

            •  The law was about commemorative coins (2+ / 0-)
              Recommended by:
              RUNDOWN, Nova Land

              It wasn't about giving the executive the power to add as much as he cared to the Treasury, whenever he cared to, without going to Congress.  It wasn't about high finance or the fiscal balance.  It was a law letting the the US get in on a bit of that Franklin Mint action.  Think late night cable telemarketing and you're in the same ballpark as this law

              Even if this law did actually inadvertently delegate to the president this Congressional power to generate revenue, a law that lets him mint trillion dollar coins does not sufficiently limit the delegation of power to pass constitutional muster.

              Take your choice: this law either doesn't let the president mint the trillion dollar coin, or it does and it's unconstitutional.  I really don't see a thrid possibility.

              The states must be abolished.

              by gtomkins on Mon Jan 07, 2013 at 06:01:59 PM PST

              [ Parent ]

              •  It's possible (4+ / 0-)

                that Congress passed an unconstitutional delegation of its own powers.  It has been known to pass unconstitutional laws.  However, until that law has been deemed unconstitutional by the Supreme Court, it would appear that the President is MANDATED by the 14th amendment to attempt to use it if necessary to pay the debts of the United States incurred by legal Congressional appropriations.  And so, he would have to do so, and then somebody would have to challenge the constitutionality in the Court, and it would have to wend its way through SCOTUS, which would take at least two years.  Meanwhile, the debt ceiling would be dead and the bills would be paid and the Republicans wouldn't be able to hold the entire government hostage for their pet cutbacks.

                But . . . just because the law was originally passed for the purpose of authorizing commemorative coins does NOT mean that it can't be used, ummm, "creatively".  Just think how the railroad corporations used the language of the 13th Amendment that was written to assure civil rights for black men, to create "equal rights" for Corporate "Persons".

                A Roosevelt (either one) would jump on this in a heartbeat.  All it takes is the balls to grab a tool that happens to be shaped like the hammer you need.

                •  and don't forget how (2+ / 0-)
                  Recommended by:
                  david78209, MPociask

                  the NRA bastardized the 2nd Amendment.

                  There is nothing new about using the letter of the law for purposes different than its intent.  

                  •  Maybe you shouldn't, but you can. (2+ / 0-)
                    Recommended by:
                    Fair Economist, MPociask
                    It's common sense that you can't use laws in ways that were not intended.
                    It happens all the time, that laws get used in ways that weren't intended when Congress passed them.

                    I think Obama should put this option "on the table," front and center, and dare the Republicans to pass a bill changing the law to limit the total amount of platinum coinage in the same way the amount of paper money is limited.  Such a change in the law might pass the House but not the Senate, and even if it did it could be vetoed.

                    In a perfect world we wouldn't need gimmicks.  In the real world, we shouldn't unilaterally forswear their use.  

                    We're all pretty strange one way or another; some of us just hide it better. "Normal" is a dryer setting.

                    by david78209 on Mon Jan 07, 2013 at 10:42:46 PM PST

                    [ Parent ]

                    •  Using gimmickry in an imperfect world doesn't... (0+ / 0-)

                      ... sound sensible, either.

                      2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

                      by TRPChicago on Tue Jan 08, 2013 at 05:25:38 AM PST

                      [ Parent ]

                      •  The Civil Rights Act of 1964 was upheld (2+ / 0-)
                        Recommended by:
                        MPociask, david78209

                        against a local barbecue using the commerce clause.

                        Ollie's barbecue had only one location and argued that it was not engaged in interstate commerce.  The Supreme Court ruled that the amount of food that crossed interstate lines was sufficient to for the commerce clause.  

                        I seriously doubt that the drafters of the commerce clause had intended for it to be used in this manner.

                •  Dick Cheney ... (0+ / 0-)
                  But . . . just because the law was originally passed for the purpose of authorizing commemorative coins does NOT mean that it can't be used, ummm, "creatively".
                  would umm, be "proud" , of that argument.

                  If not us ... who? If not here ... where? If not now ... when?

                  by RUNDOWN on Tue Jan 08, 2013 at 07:21:14 AM PST

                  [ Parent ]

            •  He isn't required to do that particular thing. (0+ / 0-)

              It's as reasonable to say that the President can read the 14th Amendment, too, and implement it even if Congress passes - or doesn't pass, in the case of a continuing increase in its arbitrary debt ceiling - anything.

              2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

              by TRPChicago on Tue Jan 08, 2013 at 05:24:40 AM PST

              [ Parent ]

              •  I don't see a 14th ammendment issue (0+ / 0-)

                The 14th ammendment only requires the president to honor all debts.  It doesn't authorize him to issue new debts, especially when congress has directly prohibited him from doing so.

                If there were a conflict between competing requirements of congress, maybe you would be able to get a court to overide one of them.  But here there is no conflict, since congress has clearly provided the president a means to finance spending without tax revenues or new debt.  

                Really, it's up to congress.  It's congress which has the power to collect taxes, borrow money, pay debts, and to coin money.  

                In this case though, congress has already authorized the spending and the coinage.  So that's all the president can do, until congress decides something else.  You can't choose whether or not to do what congress has decided.  

        •  They've *already* borrowed the money (6+ / 0-)

          They did that when they authorized the expenditure.

          Obama should issue One Million Dollar bills with Reagan's face on them. Rich Conservatives will buy them and frame them, just to impress their corporate office visitors . Or perhaps they can give them to their grandchildren, who would be told to save them for college.

          Either way, it's a way to get some purchasing power out of the hands of the wealthiest, and into Treasury coffers.

          They say "cut back" - we say "fight back"!

          by Louise on Mon Jan 07, 2013 at 01:15:12 PM PST

          [ Parent ]

        •  this is why I advocate suing Congress when it (0+ / 0-)

          abrogates its constitutional responsibility to hold all U.S. debt inviolate.

          I do not care if SCOTUS doesn't want to be involved -- take them by the collective ear, drag them down to the woodshed, force the switch upon them and tell them to get to work.

          It's clobberin' time.

          It seems curiosity has killed the cat that had my tongue.

          by Murphoney on Tue Jan 08, 2013 at 11:07:15 AM PST

          [ Parent ]

      •  Hate to say it (9+ / 0-)

        But you are wrong when you say;

        "Congress didn't authorize a trillion dollar coin."

        According to the LAW;

        Section 5111, in particular.

        “The Secretary of the Treasury—
        (1) shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States;”

        Ill repeat the important part;

        IN AMOUNTS NECESSARY TO MEET NEEDS OF THE UNITED STATES!!

        It might be 5-6 trillion, depending on whats happening

        The whole point of this exercise is to demonstrate the absurdity of an arbitrary debt ceiling

      •  Platinum coin ain't debt! (4+ / 0-)

        Just three questions for the Platinum coin antis:

        Q1. Who created the dollars that the Federal government borrowed?

        Q2. What is the maximum number of dollars that can be created?

        Now, many may think the answers are "the Federal Reserve" and "what the Federal Reserve Board independently determines."  Those answers are incomplete to the point of being essentially wrong.  The correct answers are:

        A1. The Fed is only part of the story.  Commercial (mostly TBTF) banks themselves created many of the dollars in circulation through loans.

        A2. There are only two limits -- both soft -- to the number of dollars in circulation: the amount of money the Fed issues and the "reserve ratio" that it requires commercial banks to retain.  But Congress does not control the first and extensive quantitative research (see: MMT) shows that banks can obtain low-cost reserves, after the fact, to cover any quantity of dollars they choose to create through loans.

        Thus, for decades, Congress has unquestioningly allowed private actors to determine the number of US dollars in circulation with no Congressional oversight!  Since that is a well-established fact ...

        Q3. How does an administration usurp any Congressional power by carrying out the letter of an extremely clearly-worded statutory delegation of power so as to fulfill their explicit constitutional duty to honor the debts owed on expenditures authorized by Congress?

        In my opinion, it's time for the President to take bold, paragigm-breaking action to break the back of extra-constitutional Republican obstruction of the clearly-expressed will of the people.  

      •  Thank you for shooting down the whole coin idea; (1+ / 0-)
        Recommended by:
        gtomkins

        You can't fight crazy with crazy.

        Even before the Supreme Court shot it down, the bond market and the foreign exchange market would make very clear what a bad idea it is.

        The sleep of reason brings forth monsters. --Goya

        by MadScientist on Tue Jan 08, 2013 at 06:42:53 PM PST

        [ Parent ]

        •  Bend over backwards to be fair ... (0+ / 0-)

          ... to the coiners, that's my approach.

          I didn't have a lot good to say about the coin in my original post, because I was talking about it as a political and constitutional maneuver, at which, yes, it is ++++ crazy.  There's nothing good to say about the politics of the coin.

          But I actually agree with people who defend the idea as an economic maneuver.  I agree with Krugman that the inflation, bond vigilantism and weakened dollar that you fear either won't happen, or would actually be good in the modest effect size the coin would produce.  We're up against the zero bound, and interest rates on US boinds aren't going back up until demand picks up (which would mark success! not failure), and people looking for something to do with their spare cash can find better opportunities than T-bills.  Aside from that effect, anything that averts default, as the coin would (If it wasn't shot down by SCOTUS!), would only work to make T-bills safe and attractive, not dangerous and scary.  Modest inflation would help our debt overhang, and we're not going to get anything beyond that until the economy recovers.  Same for a weakened dollar, it helps our exports.

          I'm all for Keynesian economics.  I'm all for giving the demand side its due.  But I'm even more for democracy.  The best public policy in the world, if executed by presidential decree when the Constitution -- in one of the few things the Constitution gets spot-on right, demands that fiscal policy be determined only by public law -- would be a political and constitutional disaster.

          Let's have Keynesian economics.  Let's go further than stodgy old Krugman, print 10 trillion or so, and drop it from helicopters.  But let's do that only after we convince the Keynesian doubters, such as you seem to be, and win the next election by running on Keynesian stimulus and against R austerity.  Lets's do it as a democracy, not as a presidential autocracy.

          I'm crazier than the coiners -- on economics.  On the power of the purse staying a legislative power -- I'm stodgier than Madison.

          The states must be abolished.

          by gtomkins on Tue Jan 08, 2013 at 08:36:55 PM PST

          [ Parent ]

    •  And Congress can refuse to authorize new spending (5+ / 0-)

      This whole stupid scheme pretends that Congress has no counter measures. They do.

      In March, the current spending continuing resolution runs out.

      The House can simply sit on its hands and flip the President the bird.  They can basically say, "if that's how you want to play the game, we're shutting this government down."

      •  A short term $0 Department of Defense budget? (0+ / 0-)

        A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

        by notrouble on Mon Jan 07, 2013 at 04:10:09 PM PST

        [ Parent ]

      •  That is the real threat (3+ / 0-)
        Recommended by:
        notrouble, Bon Temps, Nova Land

        Treasury can ignore the breach of the debt ceiling, because spending has been authorized and obligated in law by the annual bidget bills.

        But it can't, except as dictated by statute, ignore the lack of regular spending authorization.  That's their real hostage, the annual budget authorizations.

        Ironically, that threat is downplayed by conventional wisdom, because they tried this in 1994 and '95, that's now remembered as "government shutdown" and govt shutdown was so toxically unpopular that most people seem to think they won't be able to trundle it out again.

        The debt ceiling, in contrast is totally toothless, but it has a big hairy rep and hasn't been tried yet, therefore hasn't had a chance to become toxic in public opinion.

        My concern is that the other side will try to confuse and conflate the two, as both lapse at about the same time.  They will use the budget bills to frighten people in the know, while using the debt ceiling to confuse and frighten unsophisticated public opinion.

        We really, really do not need to add to this inherently confusing situation totally gratuitous layers of confusion like this coin thing.  Not only will it not work, it will just confuse where our side needs clarity.  

        The states must be abolished.

        by gtomkins on Mon Jan 07, 2013 at 06:13:56 PM PST

        [ Parent ]

        •  really.. (1+ / 0-)
          Recommended by:
          gtomkins

          clarity? ha!

          The general public most likely thinks this fiscal cliff stuff solved everything..

          They are not gonna be happy when they find out there's a debt ceiling fight followed by a budget fight!

          •  Who to blame (1+ / 0-)
            Recommended by:
            Bon Temps

            Part of our side's job is to make sure the public has the correct explanation for their unhappiness.

            That unhappiness is actually an advantage.  The public will, quite reasonably, have no interest in the workings of govt in general, and the budget process in general, while the machinery seem to be in good working order, producing reasonably good results.  It's exactly when the results start to go bad, the machinery breaks down, and unhappiness builds, that we have our first opportunity to educate them, because they for the first time feel the topic is worthy of their attention.

            The other side knows this as well.  All of these little crises they gin up with their little acts of sabotage, and sometimes, as now, perhaps big acts of sabotage, carry the risk of waking people from their slumber.  Not good for your forces of darkness.  So they have hit upon the best means to minimize the risk that unhappiness will lead to people waking up to their role in creating the unhappiness.  They hinder clarity by mashing the crises together in time, and tangling them up together in impenetrable knots.  Who knows who to blame anymore?

            Of course they're going to try to confuse all of these three things -- the sequester, the ceiling and the budget bills  -- all with each other.  They're the forces of darkness, that's how they roll, what else is new?

            What is new is that we have people on our side wanting to second line in Satan's parade.  We have this coin thing, that at very best, if we're lucky, will do no more damage than muddying further an already muddled situation.  That only helps the other side.  Our side should be trying to avoid unnecessary complications.

            The states must be abolished.

            by gtomkins on Mon Jan 07, 2013 at 09:43:53 PM PST

            [ Parent ]

    •  Nixon did this (0+ / 0-)

      He "impounded" funds for programs he didn't like.

      --United Citizens defeated Citizens United...This time. --

      by chipoliwog on Mon Jan 07, 2013 at 06:58:03 PM PST

      [ Parent ]

  •  How about getting Clinton back as Mr. Explainer? (8+ / 0-)
    •  Nothing clears the mind like the prospect... (3+ / 0-)
      Recommended by:
      Aspe4, Sharon Wraight, Matt Z

      ... of a hanging.  Samuel Johnson said something like that.

      My point is that our most sure and reliable motivator for the public to absorb the edcuation about our budget process is the prospect of what would happen if the Rs manage to force actual default.

      It's still nice to have individuals who know how to explain things in terms people can relate to convey the education.  But even Cliinton couldn't keep people awake past the phrase "annual budget reconciliation process" were it not for the frisson of impending doom provided by our House Rs.  They need to be our great communicators.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 12:12:54 PM PST

      [ Parent ]

  •  I have a feeling that us dems... (11+ / 0-)

    like the platinum coin idea with Obama in the WH.  

    However, we probably would like the idea as much with a Republican trying this type of maneuver.

    This whole idea makes me a bit queasy and I'm much more inclined to avoid this path.  It opens Pandora's box allows a whole bunch of potential executive branch abuses from this one precedent.

    Tipped and Rec'd for a solid counter argument.

    Nothing worth noting at the moment.

    by Bonsai66 on Mon Jan 07, 2013 at 10:20:55 AM PST

    •  There's no problem with the coinage (14+ / 0-)

      Expenditures would still sbe et by Congress. A Republican using coinage to cover expenses Congress refused to fund otherwise would still be following Congress' decrees.

      What would make me very queasy would be a Republican president getting to choose how to make over 500 billion dollars in cuts. It's the idea that we should let the President pick and choose cuts - as he must if we allow the debt ceiling to limit government expenditures - which does violence to the Constitutional system.

    •  Exactly (3+ / 0-)
      Recommended by:
      Sylv, Sharon Wraight, Sparhawk

      Let Obama use the coin to create 60 trillion, and you let the next Dubya create 60 trllion at his pleasure.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 10:55:17 AM PST

      [ Parent ]

      •  That's not the issue at all (14+ / 0-)

        Congress authorizes spending.

        Now, you are right that the platinum coin provision is not intended for this proposed use.

        However, in the face of the 14th Amendment's mandate to honor existing US debt, and in the face of GOP intransigence on raising debt ceiling to at least pay for existing debt and authoirzations, platinum coin is defensible.

        •  Clarify your thinking (3+ / 0-)
          Recommended by:
          Sharon Wraight, Sparhawk, anonevent

          While it is true that the coin, even in R presidential hands, is only half of the power of the purse, and the obvious catastrophic and immediate consequences would only flow from giving the already imperial presidency both ends of that power of the purse, can you really be so casual about giving up "only" half the power of the purse?  You are confident that the mind of man is incapable of finding a way to work great harm with "only" half that power?

          GOP intransigeance only matters if their threatened failure to raise the limit actually would force us into default.  I don't think it would, I think that the ceiling law has clearly been replaced as the current effective limit on Congress's delegation to Treasury of borrowing authority.  The survival of this vestige has only been tolerated as a harmless outlet for the deficit scolds.  That anyone imagines that it is still in force, and could be used by one chamber to unilaterally repeal spending laws, tells us that we should get rid of the thing because it's obviously not harmless.  But it shouldn't prompt us to create a counter coup, platinum coin, plot to face off the House's attempted budgetary coup.

          Look, at the end of the day, whether their side succeeds or our side succeeds here depends on what we can get the electorate to believe about the legitimacy of their attempted coup.  If they're right, if the House really does have the right to repeal spending laws passed by the full Congress (including a majority of the Houses itself!), than anything our side does to deprive them of their right is wrong, whether its this dodgy coin idea, or appeals to the 14th Amendment, or whatever.  Why bring in a dodgy idea, that sure looks like an illegitimate power grab, because it is one, from our side, when the focus should be on the didginess of their power grab?  What does our side gain?  Offsetting penalties?

          Public respect for govt is already low enough, and our side is going to have to rely on the public being willing to pay serious attention and able to distinguish between the only seeming lawlessness of ignoring an superceded debt limit, and the genuine lawlessness (if admittedly not true criminality) of the other side's power grab.  Why confuse everyone, our side not the least, with yet another bit if power-grab legalisitic gimmickry, however bravura the chutzpah involved?  I don't think chutzpah is the right tone to be striking here.

          The states must be abolished.

          by gtomkins on Mon Jan 07, 2013 at 12:44:58 PM PST

          [ Parent ]

          •  Thanks for the diary and the solid reasoning (2+ / 0-)
            Recommended by:
            gtomkins, Jane Lew

            in the comments.

            With that said, you have a very curious sig line.  Is it serious?  Snark?  I've heard calls for abolishing the electoral college or even the Senate but I've never heard of abolishing the states.

            I find your analytical and writing skills to be very high on the dial and it really intrigues me what you mean by it.  (Sorry for the far OT comment)

            We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

            by theotherside on Mon Jan 07, 2013 at 04:11:46 PM PST

            [ Parent ]

            •  Absolutely, get rid of the states (2+ / 0-)
              Recommended by:
              WB Reeves, dorkenergy

              I don't mean that the US can or should do without administrative divisions of about the size of our current states.  We can even call these "states" if you want, and they can even keep the current boundaries for all I care.

              We just need to definitively and finally take away state sovereignty, and their right to an independent existence.  We need to reduce the states to only being administrative divisions of the one country we all live in, the USA, with only such powers (and boy, setting voting qualifications will not be one of those powers) as the nation thinks wise to let them have.

              Until we do this, states' rights will continue to rear its ugly head again a generatiion after every crisis in which the other side forces us to beat it down yet again.  And we may not win the next time.

              Not having an actual union, as England and Scotland did in 1707, where the formerly independent states dissolve their separate legislatures (and militias!) into one national legislature, was the biggest mistake the Founders made.  Presumably they didn't have a choice, presumably the states would not have formed a true union, but we clearly are and have been one nation for centuries now,  The lag in formal structure may yet change that under our feet, so we should update the formal structure to the current reality and end the states as sovereign entities as soon as possible.

              The states must be abolished.

              by gtomkins on Mon Jan 07, 2013 at 06:57:38 PM PST

              [ Parent ]

              •  Excellent point (1+ / 0-)
                Recommended by:
                dorkenergy

                Not sure if I agree with your suggestions but you're quite right to take note of the unique challenges posed by the federated character of the current system. Far too few, even of those who are politically active, fully appreciate the constraints and conflicts that are inherent in the structure that we've inherited.

                Nothing human is alien to me.

                by WB Reeves on Tue Jan 08, 2013 at 10:43:04 AM PST

                [ Parent ]

              •  Have you diaried this? (0+ / 0-)

                I am (and have long been) of similar mind.

                Very well-stated.

                ambiguity is okay ... if you know what I mean

                by dorkenergy on Tue Jan 08, 2013 at 11:01:32 AM PST

                [ Parent ]

          •  One thing you might not know (6+ / 0-)

            is that in both non-profit organization and governments, money cannot be spent unless it is properly authorized to be spent by the appropriate authority, in this case Congress.

            It doesn't matter how much money we have in the treasury or how it got there, not a nickel gets spent without Congressional authorization.  Reagan didn't understand that (or didn't want to understand that) in Iran-Contra, the intent of which was to secure the administration funding for off-budget projects like funding the Contras.  The illegal part wasn't obtaining the money, it was spending money on things not authorized. It didn't matter where the money came from. That was encroaching on Congress's "power of the purse".

            You really have to be careful about using terms like "power of the purse" too broadly, because it confuses things that aren't at all the same thing.  The only reasonable interpretation of "power of the purse" is the power to control spending. The American Heritage Cultural Dictionary agrees with me on this, that it is the "power to vote money for public purposes".  Treasury functions are a different animal.

            The coin gambit does not encroach on Congress's "power of the purse", because it has nothing to do with spending. That sounds funny because us ordinary mortals associate "spending" with cash changing hands, but that's not how a large organization like the federal government spends. You have to learn to think like an accountant and separate cash from income and expenses. An expense occurs when an obligation to pay is incurred, not when cash changes hands. If you eat a $5 dollar sandwich at a shop, you've just spent $5.  When you fork over the money you're just discharging your obligation.

            What the coin gambit does is avoid calling upon Congress's exclusive constitutional power to borrow money. That's an oversight in our Constitution because the framers didn't anticipate needing a treasury department. There is no legitimate purpose to restraining the executive's power to securitize debts already incurred by authorized spending, it's just a bug in the system.

            The problem with the coin gambit isn't related to encroachment of executive powers, it's economic.  It'd be a bad thing to get into the habit of conjuring money out of nowhere.  A treasury security doesn't do that; it takes a dollar out of the economy and puts it right back out into the economy.  Therefore it does not have the same potential to create hyperinflation that the habit of coining money and sending it out into the economy would.

            I've lost my faith in nihilism

            by grumpynerd on Mon Jan 07, 2013 at 05:03:17 PM PST

            [ Parent ]

            •  Power of the purse (0+ / 0-)

              I'm just going with Madison's concept of power of the purse, which is very wide indeed and includes revenue and spending.  Federalist #48, if memory serves, is the usual reference for Madison's take on the power of the purse.

              The states must be abolished.

              by gtomkins on Mon Jan 07, 2013 at 07:09:55 PM PST

              [ Parent ]

            •  It's counterintuitive (2+ / 0-)
              Recommended by:
              Remillard, Fair Economist

              given all our training, but it might not be inflationary at all.

              Under the current system, the government doesn't create money, despite having the authority to do so.  The BANKS create money, by lending on a "fractional reserve" system which the real estate credit/default swap mess proved was  utterly out of control.  However the banks get the initial "seed" that they multiply by excessive lending and untenable commitments, from FEDERAL DEBT.  What happens is that the Federal Reserve prints money, but to put it in circulation, it first "borrows" by selling US debt to the banks.  It then credits the US government with the proceeds from the sale, which the government goes on to spend.  Meanwhile, the banks put the "debt", in the form of Federal Reserve Notes, on deposit at the Fed (!), where they become "reserve capital" that the banks can lend against.  Typically, they will loan out between three and five times the amount that they have in reserve.  Presto!  Instant money supply expansion!  Of course, that's not the end of it either, as insurance companies and other financial firms can take those loans and use THEM as fractional reserves, etc.  This is where inflation comes from these days, except of course for the inflation due to the gradual decrease in the supply of oil, which raises prices by the simple mechanism of commodity shortage.

              Because the platinum coin wouldn't become a Federal Reserve Note that the banks could use as "capital reserve", it wouldn't form the basis for that expansion by fractional reserve lending.  So paying the government's bills directly, instead of by creating "debt", could actually be deflationary, providing it was kept within reasonable bounds.

              As someone else pointed out on one of these discussions in the last few days, the currency-creating power of government can cause serious problems if abused.  However, that's the nature of all government powers.  Government IS power, and power is dangerous if used corruptly or unwisely.  The question really is, do you want such power in the hands of government, which is at least theoretically under the control of the people, or in the hands of the banks, which are under the control of no one but their insider-owners?

            •  Except that no form of inflation is anywhere on (3+ / 0-)
              Recommended by:
              Fair Economist, dorkenergy, katiec

              our horizon. Capacity utilization rates are still very, very low and any money infused into the economy at this point, and for the next couple of years, will be entirely absorbed by the other end of the equation, which is unemployment.

              "When in doubt, do the brave thing." - Jan Smuts

              by bunnygirl60 on Tue Jan 08, 2013 at 01:05:32 AM PST

              [ Parent ]

            •  That's mostly right. (0+ / 0-)

              A treasury security may take a dollar out of the economy, but it replaces it with something equivalent. As such it is an asset swap. If you like, the creation and sale of a treasury security is an act of "money" creation. Thus borrowing does not reduce the net financial assets of the private sector. In total, deficit spending creates net financial assets, which borrowing does not remove.

              •  Sure (0+ / 0-)

                Thus borrowing does not reduce the net financial assets of the private sector.

                Absolutely, but it does reduce liquidity in the private sector while increasing liquidity in the public sector by the same amount. For that reason I would not count creating a treasury security as "creating money" unless it is bought by the Fed, which can conjure money out of thin air. In fact that's the primary way the Fed adds to the money supply. But if the security is purchased by the private sector, it is always with dollars that have already been created.  The Fed can also buy private securities.

                In total, deficit spending creates net financial assets, which borrowing does not remove.

                I don't believe this to be the case.  Simple accounting means that both the borrower (Uncle Sam) and the lender (whoever buys the debt) create an equal amount of assets and liabilities at the time of the transaction. For example, if you take out 100K loan to buy a 200K house and pay the balance in cash, you have a new 200K asset (the house), but have reduced another asset (cash on hand) by 100K and have created a 100K liability. Of course the liability grows in time with interest, and the asset hopefully appreciates or generates income, but the act of borrowing doesn't create anything net asset-wise for either party.

                The coin is something fundamentally different. It is conjuring assets out of thin air, something normally only the Fed can do.

                I've lost my faith in nihilism

                by grumpynerd on Tue Jan 08, 2013 at 05:02:31 PM PST

                [ Parent ]

                •  Treasury securities are almost equivalent to cash (1+ / 0-)
                  Recommended by:
                  katiec

                  Anybody that is presently holding one can easily sell it, it's almost as liquid. I agree that's how the Fed changes the money supply; in fact that is how it maintains interest rates, by adding or draining reserves from the banking system. But whether it's as liquid or not, a Treasury security does create a net financial asset, which is more accurate than what I originally wrote, and why I put "money" in quotes.

                  By net financial asset, I mean the private sector (really private plus foreign) receives net financial assets when the government deficit spends. It doesn't make much sense to talk about the government's net position when it (the Federal Reserve is considered part of the government) can always create as much money as it needs (it is not revenue constrained). Thus, whenever the government spends it creates financial assets for the private sector, when it taxes it removes them, but borrowing is merely an asset swap.

                  Naturally, the government also ends up with a real asset, whatever goods and services it purchased, but these are real assets, not financial assets. In your example I end up with 200K less financial assets, but also 200K worth of real assets, the house.

            •  We have fiat money, money out of nowhere, no (0+ / 0-)

              matter the complicated procedures we have to hide the fact.

              Doesn't matter if it's paper or coin.

              However, the Platinum Coin wouldn't be put into circulation as I understand it.

          •  Remember Iran-Contra? (0+ / 0-)

            My point is the GOP is not hemmed in by us playing by the rules.

            The Iran-Contra "mint" involved a lot more than a couple of grams of platinum.

            And what was the penalty?

        •  No, it is not defensible (2+ / 0-)
          Recommended by:
          Sparhawk, gtomkins

          Because once you do this the first time you are not going to be able to get lenders nor suppliers to accept your dollars in payment for anything. If I agree to purchase a billion dollars of steel for the defense program, and when I get around to paying you 30 days later that same amount of money buys a loaf of bread that is going to be the last order that supplier takes from me for a very long time.

          •  The cautious, responsible version (0+ / 0-)

            To be fair to the platinum coin idea, there are some people who support it who have come up with answers to your objection.

            Krugman, for example, talks of using the coin to get the crisis resolved, and then, when the ceiling is safely raised, we retire the coin with money we borrow undere the new ceiling.  The coin is just a temporary accounting trick.

            Others take this further, and envision some sort of mutual disarmament after the crisis is resolved and ceiling raised.  At that point, we retire the coin, and then our side agrees to vote to close the coin loophole, and the Rs vote to get rid of the vestigial debt ceiling.

            I don't think either vision is realistic.  If we use the coin, or just ignore the ceiling, the Rs simply leave the ceiling where it is, in breach, in order to have an ongoing "Kenyan Usurpation" to rail and scream about.  This is why the administration is adamant that they will do neither, and that if the Rs actually do let the ceiling breach, we go into default, period.  But they will, in the end, ignore the ceiling, if it comes to that.  We need to work on discediting the wailing and cryiing about Kenyan Usurpation, because that's wherte we're headed, unloess, of course, this ends conventionally and the Rs or our side swerves before the crash.

            Oh, and they'll never give up the old vestigial debt ceiling.  Even if it does become discredited and unusable as a result of this crisis, as govt shutdown has become (somewhat) unusable since 1994-5, their ideology still puts symbolic value on it.  It's the old reliable soapbox for deficit scolds, and they love them some deficit scolds.  The old ceiling only goes if Ds have the trifecta, and we don't forget that this is no longer a harmless sop to deficit scolds.  Nor do I see them wanting to get rid of the platinum coin gambit.  They might find it useful some day.  Tehy would use it more ruthlessly than our side ever would.

            It goes without saying that if we get the trifecta, we should add language to the platinum coin law clearly disallowing its use to add significant revenue.

            The states must be abolished.

            by gtomkins on Mon Jan 07, 2013 at 06:38:32 PM PST

            [ Parent ]

            •  Krugman's an economist (0+ / 0-)
              Krugman, for example, talks of using the coin to get the crisis resolved, and then, when the ceiling is safely raised, we retire the coin with money we borrow undere the new ceiling.  The coin is just a temporary accounting trick.

              The problem is that Krugman is an economist and not a lawyer or law professor.  He thinks this is okay, but I wouldn't put too much faith in the legality and constitutionality of this based on his expertise.  There's a decent chance this would get shot down by the supreme court causing this to blow up in Obama's face.

              •  Yale Constitutional Law Professor Jack Balkin (1+ / 0-)
                Recommended by:
                katiec

                has been making the legal argument for the coin for some time in many, many places (including at his own blog).  I have also heard that there is thinking that SCOTUS would approve it in relationship to the 14th Amendment but I have not been able to find the specifics on that.

                "When in doubt, do the brave thing." - Jan Smuts

                by bunnygirl60 on Tue Jan 08, 2013 at 01:13:07 AM PST

                [ Parent ]

          •  Relax. (4+ / 0-)

            The dollar is already fiat currency and has been for thirty years.  The defense program bought from you in dollars yesterday and will pay you in dollars tomorrow.  Although I wouldn't advise loaning money for thirty years, bills due within a year or so really shouldn't suffer so much from inflation as to cause any realistic problem.

            The hyperinflation in post-WWI Germany that is so well-known was a single extreme example resulting from a multitude of causes, including deliberate decisions by the German government and internal enemies of the then-German government.  What tends to get lost is the overwhelming preponderance of nations that exited the gold standard and other forms of currency-pegs with relatively short and easy periods of readjustment.  If you are over forty, you might remember the inflation of the 1970's that occurred from the combination of the US quitting the gold standard at the same time as the Arab Oil Embargo.  This wouldn't be NEARLY as bad, and we got through that.

            •  Got through? (0+ / 0-)

              Aren't we still living with the consequences of that inflation today? In fact, isn't it true that the country's rightward political trajectory over the past 30 plus years is traceable to that economic sea change?

              Nothing human is alien to me.

              by WB Reeves on Tue Jan 08, 2013 at 10:50:32 AM PST

              [ Parent ]

              •  Weimar Germany was NOT a monetary (1+ / 0-)
                Recommended by:
                cynndara

                sovereign of a fiat currency with a floating exchange rate.

                Among other things, Germany owed debts in currencies other than it's own.

                Big difference.

              •  Lots of other factors (2+ / 0-)
                Recommended by:
                WB Reeves, katiec

                involved in that "rightward trajectory".  The inflation possibly provided an opening.  But remember, it was Nixon, the originator of the "Southern Strategy" that eventually led the Republicans to dominance for thirty years, who floated the dollar.  And he did it because he had no other choice.  Inflation had ALREADY eaten away the value of the dollar to the point where calls on the putative gold reserve backing it could not be met.  To a certain degree, the post-float inflation was just the catch-up for two decades worth of monetary expansion which had been held back from natural adjustments by the fixed $35/ounce equivalence.

                •  Interesting points (0+ / 0-)

                  Admittedly I was a High Schooler at the time and wasn't aware of the short fall in gold reserves, though I was aware that Nixon had made the decision to let the dollar "float". I do recall that prices immediately shot upward and really haven't looked back since.

                  The house my father bought on a single income in 1958 for $25,000 was valued at close to a million before the housing bubble burst. In 1960 an annual income of $25,000 would have put you in the category of high affluence. It's a very different world today. The old saw that a dollar isn't a dollar anymore was never more appropriate.

                  Economics isn't my strong point, so I don't really have the proper frame for assessing this trend. Is their any historical parallel for this rate of inflation over time? While we're at it, what defines a "natural" as opposed to an unnatural adjustment?

                  Nothing human is alien to me.

                  by WB Reeves on Wed Jan 09, 2013 at 12:05:14 AM PST

                  [ Parent ]

                  •  LOL. (0+ / 0-)

                    I'm no economist.  And I'm not sure economists really understand economics, as they're too narrowly trained to take into account the wide range of human solutions to economic problems provided by history and anthropology, or the "non-economic" concomitants of "externalities" which are recognized by sociologists, or the moral and ethical parameters of their assumptions.

                    I can't therefore answer your question as to what a "natural" adjustment is, except to say that "natural" is what a market large enough for statistical norming produces barring deliberate governmental barriers like a declared fixed rate of exchange.  However deliberate government actions are more the rule than the exception, at least when governments have any idea what's going on.  "Natural" market adjustments tend to happen when the big picture is too big or segmented for any  government existing at the time to effectively manipulate.  Outside of western civilization in the last thirty years, governments have tended to take a dim view of the kind of misallocations, arbitrage, and profiteering that "naturally" take place in an unmanaged currency market.

                    •  Thanks for response (1+ / 0-)
                      Recommended by:
                      cynndara

                      So when economists refer to "natural" adjustments what they actually mean is "unregulated" or "private", as opposed to public, actions in the market.

                      Rather like talking about "self regulating market corrections" when referring to crashes and bubble collapses.

                      Nothing human is alien to me.

                      by WB Reeves on Thu Jan 10, 2013 at 10:37:34 AM PST

                      [ Parent ]

                      •  Some other things (1+ / 0-)
                        Recommended by:
                        WB Reeves

                        that are natural . . .

                        --  barring a change of conditions, the rich will get richer and the poor will get poorer; just like the plant that starts growing one hour sooner than its neighbor will eventually be a foot taller.

                        --  a stable and fully competitive market will consolidate until it is dominated by first a handful, and then a single player

                        --  a stable market with a limited number of large competitors maintained by regulation will lead to all of those competitors negotiating to offer customers similar prices and conditions.

                        -- once market control is established through either monopoly or regulation/collusion, providers will seek to maximize profits by minimizing the quantity and quality of goods and services delivered to captive consumers.

        •  except, i'm betting it isn't. (0+ / 0-)
          However, in the face of the 14th Amendment's mandate to honor existing US debt, and in the face of GOP intransigence on raising debt ceiling to at least pay for existing debt and authoirzations, platinum coin is defensible.
          when congress writes a law deemed ambiguous, courts look to the committee reports, in an effort to determine exactly what they were thinking. my guess, without actually having looked at the report on the platinim coin law, is that it would clearly show that congress intended it to be solely for actual commerorative coins, to be held for sale to the general public.

          conceivably, obama's attorneys could convince a court that there is a huge potential public market, for trillion dollar commerorative platinum coins. i would not take points on their odds of prevailing. i would, however, put money on the likelyhood that these attorneys have already researched this issue, and that's why you haven't heard anything about it from the white house. yes, prof. krugman found it intriguing. prof. krugman isn't a constitutional attorney.

          the 14th amendment gives obama all the legal authority necessary, to override the house republican's intrasigence on the debt ceiling issue, if it's absolutely, positively required, to keep the federal gov't from defaulting. the white house and the democratic caucuses need to keep pounding away, very publicly, on the potential damage, at both the macro & micro level, that republican's refusal to raise the debt ceiling can cause. long enough & loud enough, and all those old, angry, fundie christian white people will start getting very nervous, about their social security checks and medicare payments. fear of really angry constituents will move even the staunchest tea partier.

      •  So what? (1+ / 0-)
        Recommended by:
        Remillard

        Dubya was already president, and could have created $60 trillion if he wanted.

        And what if he did?  

        It wouldn't have changed anything, would it?

    •  I don't like it with any president (1+ / 0-)
      Recommended by:
      Marko the Werelynx

      I still fail to see how people don't view this as introducing massive inflation/devaluation of the dollar.

      It is clearly the case that inflation helps borrowers, who repay in nominal amounts, and hurts lenders, who are expecting to get a real return on their loan. If you are going to consider a $1T coin, why not a $1Q coin and have so much money laying around that you can both have free health-care for all AND invade every other country on earth simultaneously? The reason, obviously, is that putting zeros on the end of a number does not increase wealth any more than putting zeros on the face of a platinum disk increases wealth.

      We need to stop having this conversation as though using massive inflation to get out of our problem is a winner. Frankly, of all the things that would scare the 1% this is pretty much right at the top, as all of their accumulated wealth would be devalued.

    •  Why? (1+ / 0-)
      Recommended by:
      BlackClouds

      Democrats have NEVER refused to increase the debt ceiling.

      In fact, Republicans used to do the same all the way up until a black man was elected president.

    •  I disagree (4+ / 0-)

      When Bush was in the White House, Democrats voted always with the president to expand the debt ceiling and increase expenditures with deficit spending.  They also did it with Reagan.  There is no reason to believe that this is a two-sided sword.  The problem remains one of power, and the issuance of coins to repay debt obligations really doesn't result in any change in the balance of power either.  Just an escape valve from an attempt byu a deranged party to hijack the national financial system for its own ends of discrediting a President it refuses to accept, even now.

  •  My real concern (6+ / 0-)

    The major Republican objective with their debt ceiling antics isn't to balance the budget or even to cut spending, but to impose what is essentially a culturally driven agenda.  This is a tactic for the Rs to seize power.

    So if Obama were to go with the platinum coin option, it would wind up in the courts.  It's irrelevant how the court rules.  Until that ruling comes down, Treasury debt is going to be riskier than at any time since the mid 1800s.  This plays into the hands of the apocalyptic cultural values that drive most modern conservatism.  Even if Obama wins, it is a long term victory for the theocratic right wing.

    By contrast, if the debt limit is reached, Obama has a lot of discretion about what not to spend -- and that discretion includes continuing to service outstanding debt.  In the mean time, the Republicans are in an untenable position since the spending cuts will be immediately visible.  At that point, they will fold like the cheap suits they are.

    This is a subtle variant of the "14th amendment" approach.  The Treasury Department has a lot of discretion about accounting, and there are ways to work around the law short of a direct confrontation with the thugs.

    Most of the R's are too crazy to care about this, but we only need 20 of them to fold.

    •  discretion to spend (7+ / 0-)

      Speaking purely from memory, with all of its hazards, and without any specialized knowledge of law or economics, I seem to recall that in Nixon's presidency, a situation arose in which Nixon attempted to use a sort of backdoor line-item veto. Facing a Democratic majority in both houses of Congress, he tried to "sequester" certain items from the appropriations Congress had passed. As I recall, the courts rejected Nixon's contention that while lacking the constitutional authority to spend more than Congress appropriated, he had the power to spend less. The Congress then passed legislation to require the President to spend all monies appropriated by Congress.
           Now if my memory is correct, an unlikely event, President Obama could not legally pick and choose which bills to pay and which to ignore but would have to pay as long as money remained in the Treasury and then default on new bills presented for payment. Perhaps someone with expertise could weigh in here?

      "Something has gone very wrong with America, not just its economy, but its ability to function as a democratic nation. And it’s hard to see when or how that wrongness will get fixed." Paul Krugman and Robin Wells

      by Reston history guy on Mon Jan 07, 2013 at 10:44:05 AM PST

      [ Parent ]

    •  No usurpation of the power to appropriate (9+ / 0-)

      "Obama has a lot of discretion about what not to spend"

      I have to disagree with you.  While it is true that a law has been passed creating a prioritization for spending in the event that annual budget bills aren't passed, and we therefore lack normal authorization to spend, that's a very different animal than what happens if the ceiling is breached.  In a ceiling breach, the authorizations, which are also obligations, legal requirements to spend, still exist.  Those appropirations are the only possible legal basis for spending public money.  Treasury would absolutely not be able, legally, to prioritize spending.

      Sure, there is some leeway in the budget, funds tucked away here and there that oculkd, conceivably, be squeezed out to give us some leeway under the limit.  But at the current burn rate, about 40% of obligated spending is not covered by taxes and other non-borrowed revenue.  We don't have anything like 40% of spending under sofa cushions.  We can't evade this dilemma by looking under the govt's sofa cushions.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 11:05:14 AM PST

      [ Parent ]

  •  Not to menton that everybody and their brother (4+ / 0-)
    Recommended by:
    AoT, Aspe4, BentLiberal, kyril

    would be trying to counterfeit these damn things in the basement.

    Can anybody break a trillion?

  •  Coining money is in the Constitution (7+ / 0-)

    Coining and printing money, and thereby gaining money to spend, is an absolutely normal and necessary function of government, done by virtually all governments. The only problem with coining and printing is that if done to excess, the economy will suffer from inflation. However, since we're currently in a liquidity trap, there will be no inflation now. Actually, in a liquidity trap, the government should print or coin money. Eventually we'll get out of the trap (although not for many years if the Republicans succeed in budget cuts) but even then the Federal Reserve has about 3 trillion in bonds to sell to soak up any excess. We could probably cover deficits for about 10 years by coining before we started to have trouble.

    A trillion dollar coin is mildly ridiculous; a more reasonable face value would be the 100,000 dollar bill (which was used for interbank transactions), adjusted for inflation, which would come out to a million dollars. But coining money is as constitutional and *un*ridiculous as it gets.

    •  Moreover, money doesn't really impact inflation (3+ / 0-)
      Recommended by:
      Fair Economist, ferg, dorkenergy

      You can as easily cause a currecy crisis by excessive borrowing as by printing money.  What causes inflation is the ecoonomy overall (not just the government) spending more than it is capable of producing.  Whether money or debt is used to finance spending doesn't really matter.

      Governments only lose control of such an overspending economy when they lose the authority and credibility needed to increase taxes when necessary to reduce private demand.

      Massive money printing even as a currecy collapses is just a side effect of a government which has already lost control.

  •  Sounds like you're saying that the House (2+ / 0-)
    Recommended by:
    gtomkins, Aspe4

    couldn't really send us into default just by refusing to raise the debt ceiling, that there would have to be some other action by them, am I getting that right?

    In other words, the money was appropriated so the executive branch can take whatever steps it needs to to make the payments.

    The House would have to "unappropriate" the money somehow to actually default on a payment?

    Moderation in most things.

    by billmosby on Mon Jan 07, 2013 at 10:30:20 AM PST

    •  Yes (4+ / 0-)

      The laws obligating spending can only be unmade by laws repealing that spending.  Until and unless that happens, they remain the law of the land, whatever the House alone does or fails to do.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 11:50:43 AM PST

      [ Parent ]

      •  Seems like such a simple concept that even (0+ / 0-)

        those clowns on CNN would be able to understand it.

        But they need the ratings, and that drives their confusion and their profusion of talking head dog and pony shows, I guess.

        Moderation in most things.

        by billmosby on Mon Jan 07, 2013 at 12:54:38 PM PST

        [ Parent ]

      •  But Doesn't Hitting the Debt Ceiling Also Keep the (1+ / 0-)
        Recommended by:
        gtomkins

        federal government from issuing new debt, i.e. treasury bonds? Do you know how much revenue the federal government collects per month in taxes?

        "The problem with posting quotes off the Internet is you never know if they're genuine."--Gen. George Washington at the Battle of Gettysburg, February 30, 1908

        by Aspe4 on Mon Jan 07, 2013 at 01:53:52 PM PST

        [ Parent ]

        •  What the ceiling does (1+ / 0-)
          Recommended by:
          Aspe4

          Back in 2011, when we had this pseudo-crisis before, the burn rate on spending could only be covered up to 60% by non-borrowiong revenue, with a 40% shortfall needing to be covered by borrowing.  I don't think it's much different now (borrowing will decline dramatically if and when the economy picks up and we start collecting more in taxes, but the economy is not much different than in 2011.

          As for what this numerical debt ceiling actually does and doesn't do, that's the 64 thousand dollar question.  You can see my argument at several places above that it is now merely a vestige, and that we actually have a new effective debt ceiling, however much Treasury has to borrow to meet all legal spending obligations.  If I'm right, breaching this numerical ceiling means nothing except a PR event.  Treasury would continue to borrow as before, because the effective debt limit rises every time Congress obligate new spending, it doesn't wait on a vote to raise the old vestigial limit.

          There is not, to say the least, universal agreement that I am right, therefore much wailing and gnashing of teeth and mad scrambling after miracle cures like this platinum coin thing.

          The states must be abolished.

          by gtomkins on Mon Jan 07, 2013 at 07:24:00 PM PST

          [ Parent ]

          •  It's a Conflict of Laws Then (0+ / 0-)

            Interesting argument. The Congress and Prez enacted a budget and enacted appropriations that exceed the debt limit. So it's legal to continue to spend the money and issue new debt, if necessary, even if it exceeds the debt ceiling. We can't blame the executive branch for doing that when two laws conflict. The solution would be for Congress to enact a budgets and appropriations that don't exceed the debt ceiling or to just repeal the debt ceiling law.

            "The problem with posting quotes off the Internet is you never know if they're genuine."--Gen. George Washington at the Battle of Gettysburg, February 30, 1908

            by Aspe4 on Tue Jan 08, 2013 at 05:38:33 AM PST

            [ Parent ]

  •  Two issues with this (1+ / 0-)
    Recommended by:
    AmericanAnt

    First, a previous commenter spoke about 'coining money'.  Unless I'm really mistaken about this, the coin in question wouldn't be legal tender, just a commemorative medallion.  The law still allows profit to be banked, but it seems you'd never find a buyer for this thing, so how could you recognize a profit?  Anyway, this is just a side show to my more serious objection...

    I thought we were a reality based community?  How do we advance our agenda of rational legislation by another fiscal game that kicks the can down the road?  To my mind this type of action is exactly what we should NEVER advocate and should CONDEMN if proposed by others.

    Let's deal with the issues, not games to hide them.

    •  US mint says they are legal tender (7+ / 0-)

      here

      Note also

      As well as commemorating important aspects of American history and culture, these coins help raise money for important causes.
      I'd call preserving the Constitutional system of government when the President follows the laws of Congress and saving the economy from a likely depression an "important cause".  Wouldn't you?
      •  No (1+ / 0-)
        Recommended by:
        Sparhawk

        Playing games with financial instruments borders on fraud.  Just because it's legal doesn't mean it's ethical, moral, or even a good idea.

        •  Of course not (2+ / 0-)
          Recommended by:
          Fair Economist, Capt Morgan

          But the president still has to follow the law even if he thinks it's not ethical moral or a good idea.  So he still has to issue the coins.

          In this case, since it has virtually no impact other than an accounting entry, it's hard to see where the ethical or moral objection would lie anyway.  

          •  Late reply, but no (0+ / 0-)

            We completely disagree about this and neither of us is going to change our minds so I understand this is a wasted effort.

            This isn't about the president 'having to' follow the law.  He may choose to use this legal action, but he doesn't 'have to.'

            The impact is absolutely more than an 'accounting entry.'  It is the national and international perception that both parties are descending into irrational actions.

        •  Tell that to Goldman-Sachs. (1+ / 0-)
          Recommended by:
          Fair Economist

          Citibank, Morgan-Stanley, and BOA.  Heall, tell it to any corporate lawyer in any city in this country.  See where it gets you.  We don't live in an ethical, moral, or particularly smart country any more.  We live in a "competitive" race to the bottom in all of the above.  Those who refuse to stoop, perish.  And that will continue to be the situation until we stop being nice to those who habitually and repeatedly lie, cheat, steal, and bully everyone around them.  Which will require doing some downright uncivilized things.

          The most effective strategy is tit-for-tat.  That doesn't mean you ever, ever hit, lie, cheat, or break the rules FIRST.  It does mean, that you don't make yourself a patsy when dealing with psychopaths.

    •  On this point (0+ / 0-)
      you'd never find a buyer
      it might help to think of it as "Treasury mints, Fed buys."

      ambiguity is okay ... if you know what I mean

      by dorkenergy on Tue Jan 08, 2013 at 11:16:21 AM PST

      [ Parent ]

    •  Third issue is how would the America people feel (0+ / 0-)

      about it.  

      They are on our side about hating the republicans for obstructing but if this happened....would they really be ok with it?  We never really know how the fickle voter pop will take things.

  •  The most interesting point about the (5+ / 0-)

    platinum coin discussion is that it shows that MMT, with or without the coin, is the way to go.

    Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

    by hestal on Mon Jan 07, 2013 at 11:00:06 AM PST

    •  Spot On! Top Comment. (3+ / 0-)
      Recommended by:
      brillig, katiec, Puddytat

      The coin is just a mechanism.

      The larger point -- for educating the public, from non-rich Repubs, Obama (whererever you place him in this list), Dems, and (most) Progressives -- is that their understanding of money and government comes from a backwards lie promoted by a few self-serving, short-sighted billionaires.

      All hail the modern monetary reality (aka Modern Monetary Theory).

      ambiguity is okay ... if you know what I mean

      by dorkenergy on Tue Jan 08, 2013 at 11:27:56 AM PST

      [ Parent ]

  •  Excellent and much needed diary. nt (1+ / 0-)
    Recommended by:
    Aspe4
  •  Um... (9+ / 0-)
    While it is true that the president would have to usurp both ends of that equation, and we would need to add to this ability the platinum coin gives him to control revenue without Congress, the power to spend without Congress, before we had a complete presidential dictatorship -- going "only" half-way to dictatorship is still about as monumentlally unacceptable a power play as you could come up with.
    How does minting a trillion dollar coin allow the president to 'spend without authorization from Congress'?  The Congress already enacted a budget.  The President is not spending beyond the budget - he would be spending beyond the revenue.

    'Goodwill' between the GOP and the President is as abundant as unicorn farts - Me'

    by RichM on Mon Jan 07, 2013 at 11:28:20 AM PST

    •  It doesn't (12+ / 0-)

      This diary is missing the point.

      Coin is to pay existing debt and authorizations of Congress.

      •  That's what our coin is intended to do (4+ / 0-)

        But if Obama has this power, so does the next Dubya.  Who knows what the next Dubya's trillion dollar coin would be for.  I'ld prefer not to find out.

        And even if there were no concern at all that even a future Dubya could effectively misuse this half of the power of the purse, this is still a clear usurpation of that half of a power that the Constitution clearly gives to Congress, not the president.  What we gonna do when they come for us, what we gonna do when the SCOTUS shoots this down?  I think it would be 9-0.  Any bets?

        The states must be abolished.

        by gtomkins on Mon Jan 07, 2013 at 01:01:14 PM PST

        [ Parent ]

        •  Yeah, I can't imagine a SC Justice actually (0+ / 0-)

          voting that this coin is legal.

        •  Your question (2+ / 0-)
          Recommended by:
          acerimusdux, gtomkins

          "Who knows what the next Dubya's trillion dollar coin would be for."

          Is answered "It's to sidestep Democrats who refused to increase the debt ceiling.

          Except that, to my knowledge, that's never happened (although they HAVE played political games with it in recent years; just not to the extent the Republicans have.)

          America, we can do better than this...

          by Randomfactor on Mon Jan 07, 2013 at 03:27:53 PM PST

          [ Parent ]

          •  And frankly, (3+ / 0-)

            I the Democrats refused to increase the debt ceiling I'd want Bush III to be able to circumvent it. If Congress has authorized expenditures they should be paid. Partial government shutdown and massive spending discretion by the President are very bad things regardless of who is in power.

          •  They have more options (0+ / 0-)

            First a disclaimer; bad outcomes or not from other presidents misusing this power we're talking about giving Obama, my main oblection is still that this thing won't work because it's wildly unconstitutional -- dangerous or not -- so will be struck down.

            That said and answering your objection purely as a hypothetical, you can't limit your imagined uses of this coin to just carbon copies of what we see Obama using it for.  Those uses may be benign, but there is nothing at all in this platinum coin law that limits the minting of these coins to times when we face a debt ceiling crisis, or to use to address a ceiling crisis.  This is mainly because the coin law has nothing to do with the fiscal state of the US, and so puts no limits on this imagined use of coin seigniorage.  That lack of limits is exactly what makes this idea obviously unconstitutional.  But if it's no limits you want,and you think you can get away with no limits, then no limits it shall be.

            A president who wanted to force a debt ceiling crisis even though we were far below the ceiling could issue a coin of negative face value of large enough magnitude to bring us to the edge of the ceiling.  This president could do this as often as he pleased, presumably to extort concessions by blackmailing a D Congress.

            A demagogue could propose ending the income tax and replacing it with platinum coinage that, bypassing Congress, he would undertake to mint in sufficient value to pay for all our spending.  What's not to like?  Such a deal!

            Those are just the first two "opprtunities" that crossed my mind in a space of five minutes, and I'm not even low level devious or evil.  Get a real pro on the job, a smarter Rove, a Dubya with a better work ethic, ask then what wild schemes they might finagle with the leverage supplied by an infinite amount of money they can add or subtract to the Treasury, and Katy bar the door.  That's the stuff that nighmares are made of.

            The states must be abolished.

            by gtomkins on Mon Jan 07, 2013 at 07:47:19 PM PST

            [ Parent ]

        •  What are you talking about? (2+ / 0-)
          Recommended by:
          ferg, Fair Economist

          There is NO discussion about presidential spending any funds not authorized by congress

          •  Sure there is (1+ / 0-)
            Recommended by:
            nextstep

            By the plain reading of the law, the authorized spending is the lower of the debt ceiling and the budget passed by Congress. That's the obvious interpretation here.

            Also, if you play that game, in 60 days the Repubs might just not send Obama a budget at all. Then this ridiculous shell game would come to a close really quick.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Mon Jan 07, 2013 at 06:18:53 PM PST

            [ Parent ]

      •  on diarist's other point, re SCOTUS (2+ / 0-)
        Recommended by:
        Randomfactor, Fair Economist

        If the Federal Reserve Board treats the Platinum Coin as legal tender, I can't see anyone having standing to challenge their decision. What do you think?

    •  Sorry for the unneccessarily long sentence (2+ / 0-)
      Recommended by:
      Sharon Wraight, Sparhawk

      And, as sometimes happens with my prose, the sheer  length ended up conveying the opposite of what I meant to say.

      My point is that, yes, presidential control of only one end of the power of the purse is not immediately threatening of presidential tyranny.  You would need to give the president control of both ends, revenue  input and spending output, to get obvious, immediate presidential autocracy.  But even usurping "only half" of such a fundamental power seems pretty breathtaking to me.  The presidency would be half-way down a path that no reasonable person should want it to even start down.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 12:54:48 PM PST

      [ Parent ]

      •  It usurps neither. (3+ / 0-)
        Recommended by:
        Fair Economist, gtomkins, ferg

        Congressional law still holds over taxation.
        Congressional law still holds over spending.

        All that minting a $60 trillion platinum coin and depositing with the Fed does is detach tax and spending decisions from decisions as to whether it is better for the public to hold government bonds or reserves.

        Even that has been delegated to the Fed by Congress.  Current Fed policy is that reserves are better so it is buying bonds to the tune of $85 billion a month.  So, still no usurpation of any Congressional authority whatsoever.  If the Fed decided the public needed more bonds it could start by selling off its holdings.  And, if it ever ran out could ask the Treasury to start selling bonds.  Just because the Treasuries line in the Fed Spreadsheet says $60 trillion, does not mean that the Treasury cannot sell bonds if that is the desired policy.

        •  Not sure I'm following you (0+ / 0-)

          So a future, presumably R, because I'm going to have him do something irresponsible, president decides to inject 60 terabucks into Treasury, then next day unleashes the rightwing noise machine on a campaign to convince the electorate that we need to end the income tax and all payroll taxes and live off the 60 trillion, and there's more where that came from.

          This is not possible with the platinum coin?  This is not control of the revenue?  Who cares about taxation, that's so yesterday.  We've gotten rid of taxation as a source of revenue, because we have platinum coins now.

          Or we have a president, another R, because he's trying to drown govt in a bathtub, and he decides to mint a coin with negative value, a negative value of such magnitude that it brings us right to the debt ceiling.  He announces that he will only retire the coin if and when Congress agrees to serious deficit reduction.  He's not going to kick the can down the road, we are headed towards exceeding the debt limit anyway, at some time in the future, but this hero is not going to leave the problem for future presidents.  He's going to deficit reduce, then reduce again next month with a new negative value coin, and keep at it and at it until the govt really is small enough to drown in a bathtub.

          These are only extreme cases, so extreme that they would actually mostly be restrained by lack of will to go this far.  But that's all that would restrain presidents allowed access to this coin gimmick, lack of a pure enough will to do things this extreme.  Sooner or later, though, the office would meet with someone capable of exploiting it to its newly unlimited potential, as surely as the Roman imperiate found its Nero, and we would see great wonders come to pass.  But even before that day, lesser wills would find ways to use this power to work lesser evils.

          The states must be abolished.

          by gtomkins on Mon Jan 07, 2013 at 08:12:03 PM PST

          [ Parent ]

  •  Here's how to solve this (5+ / 0-)

    First of all, you know this idea is gaining traction when the opposition to it starts getting active.  

    Thus, the fact that Rep. Greg Walden (R-Ore.) is introducing legislation that would bar the U.S. Treasury from creating the currency. illustrates that at least some Republicans are starting to take the platinum coin idea seriously or are, at least, starting to try to deprive the President of the idea's legitimacy.

    “This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution,” Walden said in a statement Monday.
    So, I think, fine, agree to sign Walden's bill into law, but only with an amendment that also repeals the stupid debt ceiling so we never have to go through this again.

    As for the idea of minting a trillion dollar coin itself, it's not nearly as laughable as failing to raise the debt ceiling.

    "Why do we see the same old Republicans all over the news all the time when they were kicked out for screwing everything up?" - socratic's grandma

    by Michael James on Mon Jan 07, 2013 at 12:34:35 PM PST

    •  Only one objection (3+ / 0-)

      I don't think that "laughable" is the quality we're looking for at this juncture, not even "less laughable" than the other side's gimmick.  We've had too much laughable from our govt lately.  Only their side, the side of heedless pseudo-libertarianism, gains when govt is reduced to a pathetic object of ridicule.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 01:35:46 PM PST

      [ Parent ]

      •  I fully agree that (0+ / 0-)

        if we ever get to a place where a platinum coin has to be minted in order to get around the debt limit, that would be a bad thing.

        I don't think many people really would want to go that route.  It could lead to all sorts of thinking about how absurd our current financial system is and who knows what might happen after that.

        "Why do we see the same old Republicans all over the news all the time when they were kicked out for screwing everything up?" - socratic's grandma

        by Michael James on Mon Jan 07, 2013 at 04:10:49 PM PST

        [ Parent ]

  •  Republicans are going to cave (4+ / 0-)

    We'll see a clean debt ceiling bill and it will pass the house on a straight up or down vote, just like the fiscal cliff bill.

    Oh, yeah, they'll be shrieking and howling and plenty of Oh Noes! We're doomed! before we get to that point. Media loves the drama.  But that's what's going to happen.

    And you can take that to the bank, unlike this platinum coin gimmick.

    •  You're probably right (1+ / 0-)
      Recommended by:
      Sharon Wraight

      But the internal dynamics of the other party right now create at least the possibility that they won'd end this confrontation conventionally.  They may force a crisis, if only because their leadership, or lack thereof, doesn't knw how to avoid one, is already too committed to a certain path to draw back without being accused of a weakness that would get it primaried.

      I often try to present the admittedly less likely case, but the case we really need to be giving the most thought because it is the most treacherous.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 01:22:38 PM PST

      [ Parent ]

    •  You Think The Repugs Will Do it Without Any (0+ / 0-)

      concessions from Obama/Dems?

      "The problem with posting quotes off the Internet is you never know if they're genuine."--Gen. George Washington at the Battle of Gettysburg, February 30, 1908

      by Aspe4 on Mon Jan 07, 2013 at 01:59:29 PM PST

      [ Parent ]

      •  Yes (0+ / 0-)

        I do.

        They're already planning to make their stand over the continuing resolution to fund the government. They'll try to force a showdown over that, because shutting down the government is a lot less unpopular than tanking the economy.

  •  I just hope no-one drops that coin on their foot- (2+ / 0-)
    Recommended by:
    gtomkins, Bob Duck

    a trillion dollar coin would be big enough to Really hurt!

    Yes, I know that it would only be about the size of a silver dollar or a bit larger- I just love the image of this huge shiny thing rolling down the halls of Congress, faster and faster, the head of President Truman (you know, "the buck stops here"?) whirling round and round as it rolls, crushing all in its path, crashing through the doors and bouncing down the steps into Washington D.C., flashing in the sun with evil intent,  ...

    Irresistible.

    •  One coin to rule them all (6+ / 0-)

      This platinum coin is indeed acquiring a mythic dimension.  Perhaps one way to keep future, less worthy, presidents from minting their own coins, would be to require that the one true coin be such that it can forged only in the fires of Mount Doom, or perhaps only by a president pure of heart.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 01:30:36 PM PST

      [ Parent ]

      •  Who cares... (5+ / 0-)

        All future presidents can mint as many coins as they want.  Or, just screw it and have this president mint a $60 trillion coin, so we can move on from the incredibly stupid discussion that the government cannot "afford" something, and move to important discussions like JOBS.  Money is not the limit to government spending the only limit is what it should spend on, and the consequences of said spending.  Potentially inflation is the productive ability of the nation is near capacity.

        What it does is change the government discussion to the real instead of money.

    •  That was Lycurgus' solution (0+ / 0-)

      in ancient Sparta. Link

      ...he commanded that all gold and silver coin should be called in, and that only a sort of money of iron should be current, a great weight and quantity of which was very little worth.

      So that to lay up twenty or thirty pounds, there was required a pretty large closet, and to remove it, nothing less than a yoke of oxen. With the diffusion of this money, at once a number of vices were banished from Lacedaemon for who would rob another of such coin? Who would unjustly detain or take by force or accept as a bribe, a thing which was not easy to hide or a credit to have, or indeed of any use to cut in pieces.

      •  Iron, eh? Fun! But why not Plutonium instead of (0+ / 0-)

        platinum?  

        For truly outstanding grandstanding fun with a spine tingling thrill, mint about 25 lbs of plutonium coins and 25 lbs of lead coins (face value of $100 Billion a piece) and offer to bring them sandwiched in Oreo cookie style and rolled up in paper rolls and brought before Congress?  Polonium and Cesium might be other options.  Something with the half-life of our national deficit seems sort of poetic.

        Okay, I'm just tickled the coin idea is getting serious enough play that the GOP hyeanas are getting knocked back onto their haunches and worried they may have fallen for some 11th dimensional chess trap after all and Obama will pull a Trillion dollar Tiddly-Winks game on them.  Cesium coins with 2nd Amendment text imprinted upon them...yeah, that's it. Really mess with their minds!

        Seriously, my real vote is for coins made of transparent aluminum, with humpback whales on the face and back, with small holes drilled into their edges that work as whistles underwater. Then the president can give Congress a Cetacean and Desist order to get back to work?

        When life gives you wingnuts, make wingnut butter!

        by antirove on Mon Jan 07, 2013 at 10:15:31 PM PST

        [ Parent ]

    •  The law is broad (0+ / 0-)

      It could be smaller than a dime and still be worth $1 trillion under the law:

      31 USC § 5112 - Denominations, specifications, and design of coins

      (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

      The law gives the Secretary of the Treasury BROAD DISCRETION in all aspects of platinum coins and all coins struck by the mint are legal tender for all debts both public and private.
      •  Right, right, but the image of a huge wheel of Pt (1+ / 0-)
        Recommended by:
        acerimusdux

        is irresistible.

        On a serious note, I would think a trillion dollars is about as high as would be sensible to go. It needs to be big enough to carry 4 or 5 more years of debt, but not so big as to make one think that it's some sort of mad scheme by Dr. Evil, and thus to unnerve the international community.

        •  And the idea is as soon as the debt ceiling is (1+ / 0-)
          Recommended by:
          gtomkins

          increased, you take out the debt, buy back the coin, and place it into Fort Knox for the next time Congress goes stark raving insane.

          •  NO (2+ / 0-)
            Recommended by:
            Remillard, Fair Economist

            You mint a $60 trillion coin, and never buy it back.
            Thus, detaching the tax and spending decisions from whether it is better for the public to have bonds or reserves.

            •  There's a danger in that...... (0+ / 0-)

              You don't want to detatch spending decisions though from the question of whether the economy can actually afford the spending.

              Right now, this isn't an issue, as the economy is still underspending some.  But in normal economic times, when you need to have control of spending, it's better to have government have to borrow or tax in order to finance it's spending.

              What you don't want is to create a situation where the money supply gets out of control of the central bank.  Right now, with $2.9T in assets on the Fed's balance sheet, that's not a worry, as they can easily offset a trillion or more in Treasury money creation.  But It's probably best not to go over $2T untill absolutely needed.  

              •  Yes (0+ / 0-)

                Because central banks have done such a FABULOUS job.  

              •  Why the hell not? (1+ / 0-)
                Recommended by:
                Fair Economist

                Why is an unaccountable central bank SOOOO much better at managing the money supply than democratically elected officials?

                Why is it better that the government have artificial constraints placed on spending rather than dealing with real constraints like what the economy's  available productive capacity is or whether their is inflation or not?  Then deciding whether to siphon off that demand via taxes or spending?

                Why is it better that the public hold bonds instead of currency?

                How is the government supposed to get government issued money to spend if it can only get the government issued money from the public via taxes or borrowing, when the public can only get government issued money from the government that can only get government issued money from the public?

                •  currency vs. debt (1+ / 0-)
                  Recommended by:
                  Fair Economist

                  Right now, there is no difference, but that's because we are in or just coming out of liquidity trap conditions.

                  Normally though, when there is no deficiency in demand, overspending by borrowing money will cause interest rates to rise, and will cause crowding out of private investment.  Overspending by printing money will cause inflation first (private spending would have to be curtailed through a rise in the price level, rather than a rise in interest rates).  

                  This is why $60T worries me.  I see no reason to worry about inflation or a currency crisis right now.  I do see reasons why those might be problems 15 or 20 years from now, given the unwillingness of both parties in congress to raise taxes.

                  •  Neoliberal dogma. (0+ / 0-)

                    Sorry, crowding out is neoliberal dogma with no support in the real world.   Japan has been running much larger deficits for 2 decades without an increase in interest rates.  Plus, if you are worried about crowding out, then that is an argument to just spend currency into existence rather than issue bonds.

                    Spending beyond the productive capacity of the country will cause inflation whether the spending is via creation of interest bearing IOUs or non-interest bearing IOUs.  Inflation is probably worse for interest bearing IOUs since they pay interest.

                    If inflation is a worry then the government should raise taxes or reduce spending in order to bring demand in line with capacity.  Very simple.  Doesn't matter whether the Treasury has $60 trillion in the Fed spreadsheet or $0 and has to borrow.  The budgeting decisions are exactly the same.

                    Whether it is better for the public to have bonds or reserves is a different policy decision.  Maybe it is a good idea to give people an ultra safe way to save for the future.

                    A good thing to do is to focus on implementing additional automatic stabilizers.  Income tax and the social safety net are automatic stabilizers.  When the economy slows income taxes receipts go down, spending on unemployment insurance, food stamps, etc... goes up thus increasing the deficit and having the government automatically add some extra demand to the economy.

                    Some way to automatically provide funds to states and localities during a recession to keep teachers and other public sector workers on the job would be a good addition.  This one is tricky because Republican states would just use the money to lower taxes limiting the improvement in the job situation.  But, I am sure there are other automatic stabilizers that can be implemented.

                    But, none of these policy decisions should be constrained by the value of some number in a computer.  They should be constrained by the actual productive capacity available (and by extension inflation) and whether it is good policy and whether it is appropriate for government to purchase that good or service.  Let's have that argument because the argument of whether the government has enough bits in a computer for something is stupid.

                    •  Japan (0+ / 0-)

                      Japan doesn't have an excess of demand.  

                      And crowding out when there is a positive output gap is not neoliberal dogma, it's a standard result of IS-LM type models, and seems well supported empirically (there are studies for example which show that fiscal multipliers are higher when there is a negative output gap - exactly what one would expect when crowding out occurs with a positive output gap).  

                      As for the rest, I agree with automatic stabilizers, and have been arguing in favor of spending currency into existence, and in favor of higher inflation as well.  I'm also saying congress should cut spending or raise taxes when inflation does become a problem. Which I don't think it will for a very long time.

                      The truth is it really doesn't matter the denomination of the coin; the treasury can always issue new coins as needed.  As long as current operations are funded, any additional dollars sitting on deposit with the Fed have no impact whatsoever.  

                      That being the case though, it just seems to me to make more sense to issue the coins on an as needed basis.  There is no practial difference, any difference is entirely symbolic.  I just think a really large number like $60T seems to suggest the idea that spending should never be limited, and might politcally send the wrong message.

          •  Why do the Rs ever increase the debt ceiling? (0+ / 0-)

            Of course they are going to scream bloody murder and "Kenyan Usurpation" over the coin.  They will never accept it as legitimate, but will instead use it as a constant reminder of D foul play and constitutional hardball justifying any scheme they might ever hatch.

            In fact, if the R majority on SCOTUS thinks that this use of the coin is more valuable to the Rs than it would be to strike down the coin as unconstitutional, they could hold back on taking the case.  They could take this case or not at their choice, and then have their choice of time to do the deed of declaring the coin unconsitutional, when that would do the Ds most harm.

            In any case, even if the administration actually does plan to do the coin thing, they are absolutely not going to own up to it ahead of time, any more than they will own up to the simpler plan of just ignoring the ceiling.  Either plan prevents default, therfore either plan takes away any incentive for the Rs to vote to raise the ceiling.  The administration wants the Rs to fear that not raising the ceiling means default, so that they will raise the ceiling and not gain this advantage of putting the administration under the cloud of apparent lawlessness.

            At any rate, minting the coin will not result in a peaceful resolution of the ceiling pseudo-crisis, but instead to its indefinite prolongation.

            The states must be abolished.

            by gtomkins on Mon Jan 07, 2013 at 08:29:02 PM PST

            [ Parent ]

  •  Here's what we do (3+ / 0-)
    Recommended by:
    Aspe4, bill warnick, betelgeux

    ...mint the trillion-dollar coin, and put Ronald Reagan's picture on it, in honor of the first American president to triple the national debt.  (Unless Jefferson did that...can't recall.)

    America, we can do better than this...

    by Randomfactor on Mon Jan 07, 2013 at 01:33:57 PM PST

  •  Tipped and Recc'd for a thoughtful analysis (2+ / 0-)
    Recommended by:
    Sharon Wraight, jan4insight

    Whether you agree or not, this argument deserves attention.

  •  Congress delegates its powers to the Executive (0+ / 0-)

    all the time.

    The AUMF was a delegation of Legislative power to the Executive. Nobody screamed about that.

    The Platinum coin law is really very clear:

    31 USC § 5112 - Denominations, specifications, and design of coins

    (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

    The law is clear and the Legislative branch has delegated BROAD AUTHORITY to the Executive branch in regards to the elgislative power to coin money, but only with regards to platinum coins. Congress maintains full power on the minting of all other coins, INCLUDING GOLD COINS, which serves to demonstrate that this is not simply about minting coins for the coinage trade.

    This was clearly a very broad delegation of power by the Legislative Branch to the Executive Branch.

    •  Broad authority to mint coins (0+ / 0-)

      Is not the same as broad authority to control revenue.  In this law that dealt with commemorative coinage, it really is very clear that there was zero legislative intent to allow the president to add or subtract trillions to or from the Treasury.

      And, if I'm wrong, and there was such intent, then the delegation of power was unallowably broad, it wasn't limited enough, and the law is unconstitutional.

      Take your pick, illegal distortion of the law, or unconstitutional law -- either way, that's a big no go on minting trillion doallr coins.

      I agree with you about AUMFs, but the fact is that SCOTUS only polices what it polices, and it does police delegation of powers with respect to spending, but not with respect to declarations of war.  You're not going to get them to lay off policing spending just because they're asleep at the wheel over war powers.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 08:40:11 PM PST

      [ Parent ]

    •  The AUMF vote wasn't even necessary. (0+ / 0-)

      It was window dressing and thus was never subjected to review because review would be meaningless.  The executive serves as the Commander-in-Chief and can use the military in any lawful fashion.

      Unfortunately, I don't think that the framers anticipated a world in which widespread war would be levied without declaration although, with the constant frontier skirmishes, they perhaps should have.

      "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

      by auron renouille on Tue Jan 08, 2013 at 01:26:19 PM PST

      [ Parent ]

  •  Again, IF you were to do this, then 16 Coins? (1+ / 0-)
    Recommended by:
    bill warnick

    Why wouldn't you just pay off the entire debt this way?

    Either it is real, so why not OR it is bullshit and lets stop with the bullshit.

    I'm willing to take the "hit" on potential inflation with the technical increase in the money supply... because....

    The idiots assessing the money supply have for decades completely IGNORED the affect on the money supply with the illegal drug trade moving $100's of Billions per year for decades out of the country in cold hard cash.... $10's. $20's, $50's, $100's... into the 3rd world un-official economy of the other 5 Billion people on earth who are outside the developed nation's economy's.

    The core ERROR in the right wing's love affair with Uncle Milty Friedman was the lack of accounting on this aspect of the REAL world and actual supply of MONEY on earth.

    I can't see even $20 Trillion of additional world money supply even being noticed, if you added it over night.

    •  Yes, you should (2+ / 0-)
      Recommended by:
      Capt Morgan, The Jester

      The only reason two trillion is suggested is that it is hard enough getting people to buy the idea that even just paying the deficit is doable by simply printing money.  If people really understood the simplicity of this, we should just replace all debt with currency and be done with it.  There is no economic cost to do doing so and no economic theory suggesting it should not be done.

      Debt, in economics, is just a commitment to do something for someone else.  Currency is just a means of compelling someone to do something for someone else voluntarily. They are two sides of the same relationship so exchanging one for the other can be done with no economic side effects.  As long as you still have to pay your taxes in US dollars, the dollar will retain its same value throughout and Congress will still have the same problem with how to control or unleash, government spending and executive power as before.  It changes nothing but the arbitrary, and stupid, debt ceiling goalposts.

  •  The whole idea is absurd (3+ / 0-)

    I'm flabbergasted that reasonable people are even considering it.

    •  Absurdity? (7+ / 0-)

      It is absurd that a sovereign government that is the sole issuer of money for some reason is limited in spending that money by how much of the money, it can only issue via spending, it can get in taxes or borrow via bonds.

      It is absurd that people think that printing currency is more inflationary than bonds.  Best case they are equivalent.  Worst case bonds are more inflationary (they pay interest).

      It is absurd that our government has tied its hands behind its back and tied its shoelaces together by requiring the issuing of bonds or collection of taxes in order to spend.

      It is absurd that we are having a discussion about not having enough numbers in a computer rather than trying to put the 25 million underemployed to work full time.

      Issuing a platinum coin is the least absurd thing going on.

      •  ABSURD (1+ / 0-)
        Recommended by:
        soros

        Completely ridiculous in all possible senses. Almost literally the worst thing that could be possible in this situation. Shocking and dismaying the number of people here that think this is a good idea.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Mon Jan 07, 2013 at 06:15:34 PM PST

        [ Parent ]

  •  You're both right and wrong (1+ / 0-)
    Recommended by:
    gtomkins

    You're right the real issue at stake is a power struggle between the institutional branches of power, and there are real problems with essentially allowing the President to have full spending authority instead of Congress.

    But you're wrong that this has anything to do with debt.  When the US government, whether it is the Federal Reserve or if the US Treasury minted coins, issues currency there is no debt entry in any balance sheet.  Instead, debt is simply retired and the the total Federal debt is reduced as it gets repaid by notes issued by the government.

    That is why the coins are so popular among Keynesian economists such as Krugman.  It allows spending without debt accumulation exactly when you want such spending -- during a second great depression.    Congress can close that loophole later after the crisis is over, as it does with everything else.

    •  Not the point (0+ / 0-)

      I'm all for demand side economics informing public policy.  But I am even more all for democracy.

      We don't decide as a nation to go ahead with whatever beneft there might be to just printing a lot of money, or minting a platinum coin, or dropping either of the above from helicopters -- by presidential decree.  We take all such major steps by public law, and public law only.  This is quite clear both in the Constitution, and by the common sense of how any democracy must operate, that if nothing else, if we let things slide in any other department, when it comes to what goes into the Treasury as revenue, and what comes out as spending, there if nowhere else we allow no variance from the principle that none of this happens except by public law.

      We have already violated this principle quite enough, perhaps fatally so, with black money for black ops, as we allow an unaccountable security apparatus to grow and grow to who knows what extent.  We don't know because we can't follow the money, because the money is allowed to flow in violation of the fundamental axiom of a republic, that government be the "public thing", conducted in public, by public law, with public money.

      Krugman is normally pretty sensible, but in this case, perhaps he has let his enthusiasm for the public policy advantages of printing and minting in our current economy get the better of his political judgment.  He sees the coin we use to address the ceiling being retired after we reach an agreement to raise the debt ceiling, but that's not happening because the Rs will never raise the ceiling once the pressure of perhaps triggering default is off.  They will prefer to keep the coin in place covering an unraised ceiling indefinitely, because they will use it as a rallying cry over Kenyan Usurpation and D fiscal profligacy indefinitely.  And ,long term, D presidents will never use the coin for demand-side good half as aggressively as Rs will use it for everything but demand side interventions.

      The states must be abolished.

      by gtomkins on Mon Jan 07, 2013 at 09:02:59 PM PST

      [ Parent ]

      •  There just isn't the violations you see here (1+ / 0-)
        Recommended by:
        gtomkins

        Congress has already authorized the spending. It has contradicted itself by also capping debt.  So, what's the only legal solution?  Just mint platinum coins to allow Congressional-authorized spending -- nothing more -- while not increasing the debt.  I think you're reading to much into what the coin solution really does.

        •  Yes (0+ / 0-)

          Congress has already authorized the spending.  Therefore Treasury is required to ignore the dollar amount cap in favor of following the effective debt ceiling, however much has to be borrowed to meet all obligations the US has incurred by law.

          Why do we need a platinum coin to do this?  You either believe the dollar amount ceiling is no longer effective as the ceiling on what Treasury can borrow, that is has been replaced as the effective cap by the annual budget bills, or you don't.  If you don't believe the vestigial, dollar amount cap is still in effect, Treasury can ignore it, and has to ignore it to avoid usurping the power of appropriation that only Congress enjoys.  You don't need the coin to get there, there's no funciton served by the coin if the dollar amount ceiling isn't the effective ceiling.  Treasury just keeps borrowing as much as it needs to in order to meet all obligations.

          If you do believe that the dollar amount ceiling has to be observed -- and you have to believe that in order to see any need at all for the coin -- then you believe that the House does indeed get to contradict itself, it gets to repudiate debt that it itself voted for in the last set of budget bills by not alowing the ceiling ot rise.  But if you believe that the House has that right, how dare you try to take it away with your coin gimmick?  This gimmick has to be illegal or unconstitutional, if only from the fact that it subverts what you are telling me is the House's right.

          A lot of people are for the coin only because they have bought into the false impression encouraged by some of its proponents, that it is the ony alternative to default if the House refuses to raise the ceiling. That just isn't so.  Just having Treasury ignore the superceded ceiling in favor of observing the effective ceiling is the much preferable alternative way of not having the US default if the ceiling is breached.

          The coin requires the same pre-supposition as just ignoring the ceiling, namely that the ceiling law does not give the House the prerogative of repudiating the obligations for the US to spend everything authorized by law.  But if you make that supposition, you don't need the coin, it's overkill.  

          And it's overkill that also happens to be illegal or unconstitutional.  It's illegal because trillion dollar coins are clearly not intended by the law.  If they were, the law would be an unconstitutionally broad delegation of Congress's sole power to authorize revenue.

          The minimum consideration raised by the illegality/unconstitutionality of the coin, is that this feature of this little gimmick is likely to get the administratioin slapped down by SCOTUS if it mints the coin.  That would be game, set, and match.  Obama would become the lamest of lame ducks overnight.

          But, in this case, the worst of it isn't getting caught breaking the law.  The worst of it is that Congress having the sole power to authorize revenue is so basic to any democratic, republican form of government, that getting away with this would be even worse than getting caught.

          But that's just a hypothetical, because no way is SCOTUS going to let the administration get away with the coin.  I predict a 9-0 vote if our side is dumb enough to try it.

          The states must be abolished.

          by gtomkins on Wed Jan 09, 2013 at 09:53:01 PM PST

          [ Parent ]

          •  The coin in no way supercedes congress's (0+ / 0-)

            authority to control the budget.  

            Congress contradicts itself all the time, and implementers of Congress's acts deal with such ambiguities all the time, often by implementing something different than what was originally legislated. Political scientists have been writing about this for decades -- most laws do not get implemented they way they were intended because reality is different than expected and ambiguities are intentionally put in legislation to allow for power struggles during implementation of them to continue.  That's our system.  It's a feature, not a bug.

            If and when Congress decides to take a stronger stand on specifying spending, nothing in the coin solution prevents it from doing so, and nothing in the coin solution allows anyone to spend more than congress authorized.  The correct interpretation of the contradictions in the laws is that such contradictions were intended by congress so that the executive could figure out the right solution, just like it does with every other law that gets passed.

            I think where you're having trouble with this is that you're vision of how our government functions is based on very idealistic, civics class version of the separation of powers which supposes very strict and easy to identify distinctions between the governance functions of each branch of government.  Reality has proven much different, and ambiguities between responsibilities for each branch have existed and overlapped since the beginning of the republic.  The way you appear to think our government works is neither the way it really does, nor the way it should.

            •  Realism and Nihilism (0+ / 0-)

              Sure, realism tells us that no matter how much care is taken in writing laws, ambiguities and contradictions will arise between them and already existing law.  That's why we have courts, and that's why we have legislatures in continuing and ongoing existence, rather than pretend that there is any man-made law that can be immutable because it got it right the first time.  We progressively clarify the ambiguities and resolve the contradictions based on experience of the consequences of the real-world operation of laws that didn't get it right the first time.

              None of that creates even the slightest excuse to pretend that there is ambiguity in the law where there is no ambiguity, or to invent from such a pretended ambiguity some new procedure that contradicts existing law.

              The platinum coin law passed in 1996 was unambiguously not intended to allow the president control over monetary policy outside of legislative supervision, much less to allow him to monetize the debt.  And if you believe (incorrectly) that the House has the right given to it by the ceiling law to unilaterally repudiate US spending obligations, then you believe that the coin law could not possibly have been intended to allow the president to frustrate the House in its exercise of that rght.

              The nihilism that lets you do that, invent an ambiguity in a law to use that as your fulcrum to take a legitimate power away from the House, would let you get away with anything.  Tell the world that you believe this reasoning is sound, and you're telling the world that you don't feel at all bound by law, that the law is a joke and a fable we tell children in civics class to frighten them into good behavior.  That's bad PR, if nothing else; look for a better rationalization, if nothing else.  That reasoning will lose in the courts; if nothing else, look for better legal arguments, as the argument "The law is a joke, so spot us this one. The law has all sorts of ambiguities and contradictions, so let us get away with inventing this one." doesn't seem to impress judges much.

              Now, if such a naked power grab were actually necessary to keep the US out of default, then maybe the undoubted disaster of default would justify running up the jolly roger and taking to a nihilistic life of political crime.  But that's what frustrates me the most in this debate, that nihilism from our side to counter Teahadist nihilism is completely unnecessary.  We don't have to abandon law to avoid default.

              The exact same analysis I applied to having the president use the coin law to monetize US debt despite the absence of any delegation of power to him to do that, applies to the House Rs in their notion that the ceiling law gives them the right to unilaterally repudiate US obligations.  There is no such right.

              If it comes to it, if the House isn't frightened off and lets the ceiling be breached, the president will have to tell Treaury to ignore the ceiling.  Our side is going to have enough trouble in the court of public opinion (as well as in non-metaphorical courts) avoiding the appearance of lawlessness.  I can't imagine a worse move by our side than for the president to add to this picture a completely gratuitous gimmick like the coin that actually is lawless.

              The states must be abolished.

              by gtomkins on Sat Jan 12, 2013 at 11:11:56 AM PST

              [ Parent ]

    •  THis has nothing to do with spending (1+ / 0-)
      Recommended by:
      eastsidedemocrat

      money not authorized by law via Congress. IN fact, that is exactly the point. The treasury could mint an eleventy gazillion dollar coin and bank it, and Presidnet Obama could not legally spend a dime more than what was authorized by law in legislation that both chambers of Congress and the POTUS sign into law.

      cheers,

      Mitch Gore

      Want to end too big to fail banks? Then move your money and they will no longer be too big.

      by Lestatdelc on Tue Jan 08, 2013 at 03:47:17 PM PST

      [ Parent ]

      •  Exactly (0+ / 0-)

        Congress has already authorized such spending.  It has also capped the debt. These two congressional acts contradict each other, and the only currently legal solution is for the government to mint platinum coins which would allows both already authorized spending to continue and the debt to remain capped.  That we don't shut down government spending altogether during a recession like the present is of critical importance for the economy is a benefit to such a solution.

  •  1/4 the argument seems to be (1+ / 0-)
    Recommended by:
    Yamara

    please dont misuse the the law, as than the new 'W' will be able to do the same..

    Problem with that is that the next 'W' will not care about precedence and will now care about flying in the face of the intention of the law.

    This is how the GOP gets away with "murder" they simply do whatever the hell they want and democrats are too afraid to stand in their way.

    •  That's an important point (0+ / 0-)

      The Next Dubya could just abuse the law as it stands with or without a precedent. Roll out whatever coin he needed against a similar attempt to rein him in.

      And he wouldn't even be breaking the law.

    •  Even if the Treasury minted an eleventy billion (0+ / 0-)

      dollar coin, it could still on spend the dollars authorized by Congress. There is no usurpation of any powers this diarist claims.

      There is no "there" there in the basic premise of this diary other than possible "optics" about how it would play out in the media and with the public.

      cheers,

      Mitch Gore

      Want to end too big to fail banks? Then move your money and they will no longer be too big.

      by Lestatdelc on Tue Jan 08, 2013 at 03:45:06 PM PST

      [ Parent ]

  •  Plenty of people might need a million dollar coin (1+ / 0-)
    Recommended by:
    Fair Economist

    or a $10,000,000 coin. Really.... just who do you think you are to say they don't?

    Who says this was never intended? Ever hear of a $100,000 bill? How different is this?

    Get with the times, 99%! This diarist is filled with the small thoughts of the little people. Don't ask this person for any grey poupon!

    This is a question that should be left to our betters.

  •  Fundamental misunderstanding of money (8+ / 0-)
    Money goes into the Treasury from taxes and borrowing only by public law, and it goes out of the Treasury as spending only by public law.  While it is true that the president would have to usurp both ends of that equation, and we would need to add to this ability the platinum coin gives him to control revenue without Congress, the power to spend without Congress, before we had a complete presidential dictatorship -- going "only" half-way to dictatorship is still about as monumentlally unacceptable a power play as you could come up with.
    Money does NOT go into the Treasury from taxes.  Money is destroyed by the government via taxes and created by the government via spending.  Only the government can create money and the government only accepts the government created money in payment of taxes.  So, if the government has to collect taxes or borrow money before it can spend where do the people who pay the taxes or lend the money get money from?

    That paradox demonstrates the falsehood of the above statement.

    Congress has already delegated money creation to the Treasury and the Fed.  A Platinum coin of any denomination is duly authorized by Congress.  The court only gets involved in Congressional intent when the plain language of a statute is not clear.  This statute is absolutely clear that the Treasury can mint a platinum coin in any denomination. So, there is no constitutional question as to whether a coin in any denomination can be minted.

    Depositing a $60 trillion coin with the Fed and crediting that amount the Treasuries account at the Fed, does not authorize any additional spending beyond current Congressional appropriations.  It just means there is no need to issue additional bonds in order to make Congressionally authorized expenditures, thus making the debt limit irrelevant.  It also in no way changes the collection of taxes as duly authorized by Congress.

    If the platinum coin solution were used, our Congress might get the hint when the world does not end that they should be following the rules of functional finance instead of neo-liberal bulls#!t dogma.

    1) The government shall maintain a reasonable level of demand at all times. If there is too little spending and, thus, excessive unemployment, the government shall reduce taxes or increase its own spending. If there is too much spending, the government shall prevent inflation by reducing its own expenditures or by increasing taxes.

    2) By borrowing money when it wishes to raise the rate of interest and by lending money or repaying debt when it wishes to lower the rate of interest, the government shall maintain that rate of interest that induces the optimum amount of investment.

    3) If either of the first two rules conflicts with principles of 'sound finance' or of balancing the budget, or of limiting the national debt, so much the worse for these principles. The government press shall print any money that may be needed to carry out rules 1 and 2

    Apparently, we have decided that our government should have its hands tied behind its back and it shoelaces tied together.
  •  I personally prefer 1,000 billion dollar coins (1+ / 0-)
    Recommended by:
    acerimusdux

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)!

    by dopper0189 on Mon Jan 07, 2013 at 02:54:05 PM PST

    •  We can do better ~300 $33 B coins with visages (0+ / 0-)

      of all the obstructing members of Congress upon them. Put Grover Norquist's pledge on the back.  It'd be the perfect storm of narcissism versus political tantrums.

      When life gives you wingnuts, make wingnut butter!

      by antirove on Mon Jan 07, 2013 at 09:51:40 PM PST

      [ Parent ]

  •  For a more serious discussion of the PCS go (0+ / 0-)

    Warren is neither a Clintonesque triangulator nor an Obamaesque conciliator. She is a throwback to a more combative progressive tradition, and her candidacy is a test of whether that approach can still appeal to voters.-J. Toobin "New Yorker"

    by chuck utzman on Mon Jan 07, 2013 at 03:19:01 PM PST

    •  I disagree.. It is not more serious (2+ / 0-)
      Recommended by:
      Remillard, dorkenergy

      Still, more neo-liberal economic dogma BS.

      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.
      There is only difference between bonds and reserves is that bonds pay more interest and you cannot use bonds to pay taxes.  So, there is no difference in terms of inflation between bonds and currency.  This fundamental misunderstanding of the nature of money shows that this is not a more serious discussion.

      Consider this way of thinking of money.  If you were to do something for the government the government gives you an IOU that pays no interest.  In addition the government imposes taxes on you and everyone else on pain of imprisonment.  But, luckily for you the government will accept back its IOU as payment for taxes.  Since, everyone pays taxes everyone wants government IOUs to some extent so they don't go to prison.  In this context, a government bond is an IOU that pays interest, but can't be used to pay taxes and is otherwise no different than currency.  If anything, the bond is more inflationary than currency since it pays interest.

  •  We should mint The Coin (4+ / 0-)
    Recommended by:
    Bob Duck, betelgeux, ferg, antirove

    and it should look like this:

    just to show how far we have come as a species.

  •  Baloney (0+ / 0-)

    It's not the power of the purse.  That is hyperbole.  The real argument is would cause artificial inflation in the value of metals.  But you argue that it's the coinage vale and not the medal per se.

    I don' t like this way of running a government but not raising the debt ceiling is unacceptable.  This does give us a way out.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Mon Jan 07, 2013 at 04:47:56 PM PST

  •  While I really love all this information (0+ / 0-)

    (no, really, thank you, this is excellent!), the only thing I'd question is if anyone should have to worry about spinning a specifically-enumerated Constitutional power granted to the Executive Branch.

    I mean, that power is what it is. And--among other things--it is stated very clearly and unambiguously.

    It is time to #Occupy Media.

    by lunachickie on Mon Jan 07, 2013 at 05:23:37 PM PST

  •  The trillion dollar coin... (1+ / 0-)
    Recommended by:
    auron renouille

    ...is the dumbest idea I've ever heard. I cannot believe that so many "serious" people think that it's a good idea. It makes me fearful for the banana-republic future we will find ourselves in, with Democrats cheering it on every step of the way.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Mon Jan 07, 2013 at 05:55:03 PM PST

    •  Just two questions ... (1+ / 0-)
      Recommended by:
      dorkenergy

      So where do the dollars in your wallet come from?  And how is a trillion-dollar coin (or the 60-trillion-dollar suggestin that I prefer) different?

      Despite the initial shock they engender, these are serious questions.  

      If you find them puzzling, (or interesting) take a few hours and peruse articles at http://neweconomicperspectives.org.  The answers that can restore inflation-free prosperity to the entire austerity-beset world are there ... well-researched over several decades.  They are being ignored by the powers-that-be simply because they don't serve the kleptocracy as well as the fairy-tale "the federal debt is like a family's debt."

    •  It ought to be deeply embarrassing for us. (0+ / 0-)

      I thought that we were about responsible, lawful government and the rule of law.  People throwing out these ideas and fantasizing about whose face should be on the coin (seriously?!)  or willfully misreading the 14th Amendment (come on, people, English isn't hard) really need to take a look around and realize how far down the rabbit hole they are.

      And the people here whose only answers to these concerns are either "yes but they're even worse so let's DO IT!" or "Banksters!!!!!111!" do not even deserve to have their ideas be heard.

      This place has gone off the m-f'in deep end.  I used to think that DKos has something relevant to contribute to Progressive politics, but this isn't relevant, it's just fantasy.

      "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

      by auron renouille on Tue Jan 08, 2013 at 01:36:21 PM PST

      [ Parent ]

  •  So essentially, your argument boils down... (1+ / 0-)
    Recommended by:
    dorkenergy

    to you think some future President might find some way to use the coin for nefarious purposes. Frankly, I'm far more concerned about the imminent real threat posed by Teabaggers holding the entire world economy hostage for their nefarious purposes! You seem rather blase about the real risk of the President just ignoring Congress and issuing the debt anyway. IMHO, that's far more a power grab than the minting of the coin, which act is specifically authorized by unambiguous law.

    When Paul Krugman is warming to the coin idea, it ought to make you wonder if the coin is such a "dumb" idea as some have put it.

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Mon Jan 07, 2013 at 06:57:39 PM PST

  •  I respectfully disagree. (3+ / 0-)
    Recommended by:
    Remillard, dorkenergy, Fair Economist

    When government grinds itself into a locked-down crisis by following the old, conventional thinking, it has two choices.  It can remain in "stasis" -- an ancient Greek term for gridlock which proves just how long this problem has been known -- until outside forces crack its brittle framework and wreak havoc with the society it encompasses.  Or somebody in leadership can jump out of The Box and do something completely, totally unconventional that breaks the logjam.  Sometimes that works brilliantly; sometimes it creates so much resistance that it utterly fails; sometimes it just creates new and more interesting problems down the line.  There's a reason why true creativity is frowned upon in a stable, FUNCTIONAL society.  But we don't have that any more.

    Your choice.  Do you want to take a chance on an imaginative solution, or keep on doing same old, same old until a  major nuclear reactor in this country explodes, or the New Madrid goes, or another Sandy hits Washington DC instead of New York, or the North Koreans land a nuke on Seattle?  Sure enough, if we persist in going hammer and tongs around the same conflicts again and again without significant change, then a significant change will catch us all encumbered with our pants around our ankles.  If you doubt that, read the history of Sulla's conquest of ancient Greece, or Josephus on The Jewish War (which started with the Jewish intercine rivalries).

    Our current monetary system is a lie plastered over a tissue-paper of misdirection.  The issuer of an unbacked fiat currency refuses to print its own money, but delegates that to an agent controlled by the private banking business, which then "borrows" the money it prints from those banks at interest (funny how THAT works) and the bankers all jump up and down yelling in chorus that WE OWE THEM so much they're terrified, yes TERRIFIED that we won't be able to repay them.  So in order to calm their fears, our democratically-elected representatives hold a massive propaganda battle over how they can starve old ladies and small children in order to be ABSOLUTELY CERTAIN that the bankers will get paid.  Money that the government itself creates, and which requires no security other than the printed paper itself.

    The trillion-dollar coin is one way to start cleaning up this obsolete, obfuscated, misdirected and fraudulent mess.  Based on the experiences of Europe during the FIRST depression, when nation after nation was forced to abandon the Gold Standard, the results would a) involve some inflation, but given the current deflationary environment, would not be drastic, and b) would rapidly evaporate the long-term structural government deficit.  If handled intelligently it would, by all precedent (and similar revaluations have occurred at least a hundred times in the last century), stimulate the economy and lead to substantial growth and prosperity for the poor and working classes, with significant but not shattering losses for the ultra-wealthy.  Similarly extreme actions with regard to currency have been taken before, and were actually quite beneficial to the majority of the populace.  But not to the bankers.  Bankers, of course, REALLY dislike the idea of governments actually being in charge of money (as they were for a thousand years before the modern era of national currencies dominated and controlled by commercial banks).

    So, whose side are you on?

    •  Great points -- kudos for the history, inc. (1+ / 0-)
      Recommended by:
      cynndara
      Bankers, of course, REALLY dislike the idea of governments actually being in charge of money (as they were for a thousand years before the modern era of national currencies dominated and controlled by commercial banks)

      So, whose side are you on?

      Aside: When I reddit'ed Glenn's comment at NEP, I considered trying to fold in "Whose side are you on?" to the title. It's a great catchphrase. (Unfortunately, the Repub-editers are down-voting it. :-( )

      ambiguity is okay ... if you know what I mean

      by dorkenergy on Tue Jan 08, 2013 at 12:11:00 PM PST

      [ Parent ]

  •  "Common sense" (2+ / 0-)
    Recommended by:
    Fair Economist, dorkenergy

    in quote.

    It's common sense that you can't use laws in ways that were not intended.
    See, what you could call a law that was used in a way unintended would be called by a shifty lawyer "a loophole in the law."

    When my dad died, he left all his money to his wife (not my mom).  When I got a call from the executor that some little t wasn't crossed, and I and my brothers were going to get X amount of dollars divvied up N ways, I was like, wow, the will is not being used the way it was INTENDED to be but I'm going to get to pay off some bills.  Yay.  (And my step mom got a bundle, so no real skin off her nose, no lawsuits.)

    I'm sure people here can give you plenty of examples of this.

    Your whole diary is based on an unreliable premise: that the president can just continue borrowing from the fed in violation of the debt ceiling based on executive powers.  We have had this debate many times on here with much brighter people than me weighing in.  I'm fine with it, but it might not be constitutional.  If it is unconstitutional, too, it's unconstitutional in a way that is an impeachable offense, a clear defiant encroachment on the powers of the Congress to control the purse strings.

    However, the platinum coin idea, if done at the very last minute and without warning, lets the president sweat out the Republicans in hope that they'll come to their senses at the last minute, and it still retains the option of -- at the very least -- BUYING MORE TIME.  Some Republican would file a suit, of course.  The coin would be the butt of enormous late night jokes while this is going on, probably to the detriment of Republicans.  Both sides could still try to negotiate a debt-ceiling deal while this is going on.

    When the Supreme Court hears the case, if they find the coin to not be legal under the platinum coin law, the president can STILL then resort to the executive powers approach, IF YOU GET TO THAT POINT WITHOUT REASON SEEPING INTO THE BRAINS OF THE REPUBLICANS.

    Of course, the Supreme Court might find it perfectly legal (I have no idea how they would come down on this; I'm sure they don't want to see the US become instantaneously insolvent, either) in which case presidents of both parties are henceforth toothless on debt ceilings until the law is changed.

    As for the idea that we would not want a Republican president to pull any coin tricks...  Do you think our wanting or not wanting would ever stop them from doing it anyway if it was that or insolvency?  Before you say, "Oh, Democrats would never put a Republican president in that position," I'll just point out, it's your own hypothetical argument.

  •  When it gets to that we're past the point.. (0+ / 0-)

    ..of no return, imv.

    The problems the nation faces today are going to require a cooperative, smart, effective, effort from all involved. And even then the odds are against us.

    What chance do we have with the fringe trying to sabotage anything and everything?

    What is so unnerving about the candidacy of Sarah Palin is the degree to which she represents—and her supporters celebrate—the joyful marriage of confidence and ignorance. SAM HARRIS

    by Cpqemp on Mon Jan 07, 2013 at 09:49:25 PM PST

  •  aw, it'd be OK (0+ / 0-)

    the prez is already judge, jury and executioner via the drone war.
    Corporations already write our laws via ALEC & the senators and representatives they own via campaign contributions.
    What's one more step toward dictatorial fascism?
    Really, what's it gonna hurt?

    We kidnap. We torture. It's our policy. Embrace it or end it!

    by Mosquito Pilot on Tue Jan 08, 2013 at 04:06:31 AM PST

  •  But why does everybody say it has to be (0+ / 0-)

    platinum?

    Wouldn't making it out of something like plutonium reduce the chances that it will be stolen?

    •  That's the only thing allowed by law (1+ / 0-)
      Recommended by:
      dorkenergy

      Congress has effectively surrendered the government's power to create money to the Federal Reserve. In writing this law, they left a loophole that returns the power to where the Founding Fathers intended, the Federal Government - but only for pure platinum coins. It's unfortunate the loophole is so narrow because there's not enough platinum for a publicly circulating coin.

  •  The coin must have a President pictured, right? (0+ / 0-)

    How about Ronald Reagan?  Irony at its best.

    Would the Repubs stop the coinage of their secular god?

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