In all the dramatic talk about minting Platinum coins or invoking the 14th Amendment if House Republicans make good on their threat to sabotage America by not raising the debt ceiling, how come no one thought of this:
... there is a plausible course of action, one that the president should publicly adopt in the coming weeks as his contingency plan should debt-ceiling negotiations falter. He should threaten to issue scrip - "registered warrants" - to existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.'s could include federal employees, defense contractors, Medicare service providers, Social Security recipients and others.
More on this ingenious, non-dramatic, totally workable solution below the jump::
The scrip would not violate the debt ceiling because it wouldn't constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay. The president could therefore establish a scrip program by executive order without piling a constitutional crisis on top of a fiscal one.
To avoid any confusion with actual Treasury debt, and to be consistent with the law governing claims against the United States more generally, the scrip would not pay interest in most cases. And unlike debt, it would have no fixed maturity date but rather would become redeemable in cash only when the secretary of the Treasury was able to certify that there's enough money available in the Treasury's general fund to cover it.
Finally, the scrip would be transferable, allowing financial institutions to buy it at a high percentage of its face value, knowing that the political crisis would almost certainly be resolved before long.
The federal Anti-Assignment Act generally prohibits the transfer of claims against the United States from one private actor to another, but the government could waive the act's application, which is what the president would do here.
Courtesy:
http://www.nytimes.com/...
I honestly don't know how this hasn't been discussed in the mainstream media. How could this very obvious but totally workable solution fly under the radar? I guess we are more interested in the drama.