Skip to comments.It's Come to This: GOP Rep Introduces Bill to Block Trillion Dollar Coin Scheme
Posted on 01/08/2013 4:42:05 PM PST by Kaslin
I humbly proffer the ultimate companion piece to this morning's item, which quoted the President Obama expressing his irritation over John Boehner's incessant carping about some "government spending problem" the president is convinced doesn't really exist. Ladies and gentlemen, it has indeed come to this:
Lawmakers are still positioning themselves for a debt ceiling fight in a few months, but one Republican congressman wants to snuff out a particular idea immediately: the U.S. Treasury minting $1 trillion platinum coins to avert a debt ceiling showdown. Rep. Greg Walden (R-Ore.) has introduced a bill to specifically ban President Barack Obama from minting the coins. “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. “My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt.”
When we first drew this nonsense to your attention early last month, it was merely a theoretical proposal being tossed about by fringe liberals and debated by academics. It's gained momentum ever since, attracting support from a veteran Congressional Democrat, as well as respected-economist-turned-lefty-polemicist, Paul Krugman. Here's a brief refresher on how this lunacy would work, including a special bonus quote from an economic "expert:"
Under this scenario, the U.S. Mint would produce (say) a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed then moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue. “I like it,” says Joseph Gagnon of the Peterson Institute for International Economics. “There’s nothing that’s obviously economically problematic about it.” In theory, this is much like having the central bank print money. But, says Gagnon, the U.S. government would simply be using the money to keep spending at existing levels, so it wouldn’t create any extra inflation. And if it did cause problems, the Fed could always counteract the effects by winding down some of its other programs to inject money into the economy. Is the platinum coin option really legal? Apparently so. It was discussed* during the 2011 debt-ceiling crisis by Jack Balkin, a law professor at Yale Law School. Under law, he noted, there’s a limit to how much paper money the United States can circulate at any one time, and there are rules that limit how many gold, silver and copper coins the Treasury can mint. But there’s no such limit when it comes to platinum coins.
Good news! It's perfectly legal and not "economically problematic" in any conceivable way. Thank God for that handy platinum loophole, am I right? Although I must say I prefer Allahpundit's cheeky suggestion that the Treasury "mint" magic beans to accomplish the same farcical trick. And as I've asked previously, if engaging in monetary mysticism to avoid issuing new debt isn't a devastating economic risk (see: acute devaluation, a collapse of confidence in the bond market and Zimbabwe-style inflation), why not churn out 17 of these puppies and retire the entire debt in one fell swoop? Hell, we'd have a surplus. Imagine the "investments" we could make with with that surplus. For the children. Back to reality: Our official national debt is hurtling toward the $17 trillion mark. Our more realistic national debt is closer to $90 trillion. We've run trillion dollar deficits for four consecutive years, and next year won't be much better -- despite policies to tax "the rich" more and substantially wind down both wars. Our spending and future obligations are unsustainable.
Unlike during the fiscal cliff battle, Republicans will have some real leverage to attempt to force Democrats to begin to deal with these facts over the next few months. Rather than advancing solutions to curb short-term spending and corral long-term liabilities, liberals are talking about trillion dollar coins. (Their other big idea is having Obama unilaterally declare the debt ceiling unconstitutional, then go on his merry way, forcing Republicans to sue. This won't work, but it would create a new temporary crisis, wherein the US treasury would be split into two tranches: Pre-lawsuit real money, and post-lawsuit fake money. Good times). As a political matter, I'm all for Democrats talking up these two options. In fact, I hope they speak louder. The public is willing to tolerate a lot of Lefty silliness, obviously, but they do have a breaking point. Americans recognize that we have a major debt problem, and numerous polls throughout the election cycle demonstrated that they trust Republicans more than Democrats to deal with it. Democrats disqualify themselves as serious actors with this super-coin voodoo rubbish, and the concept of abolishing the debt limit was one of the least popular elements of Obama's surreal initial fiscal cliff proposal. Republicans should maintain a united front about the revenue component being settled and turn the focus back to spending restraint -- then allow Democrats to pound the table about their various non-solutions, and stand firm. Parting thought: If we descend into full madness and these coins are minted, what should they look like? It's just has to be Obama's face, right?
UPDATE - Republicans tee off:
UPDATE II - Here's a more serious pressure point worth pursuing:
Tuesday marks the 1,350th day since the Senate passed a budget. The law requires Congress to pass a budget every year, on the grounds that Americans deserve to know how the government plans to spend the trillions of taxpayer dollars it collects, along with dollars it borrows at the taxpayers' expense. But Majority Leader Harry Reid, who last allowed a budget through the Senate in April 2009, has ignored the law since then. There's no mystery why. The budget passed by large Democratic majorities in the first months of the Obama administration had hugely elevated levels of spending in it. By not passing a new spending plan since, Reid has in effect made those levels the new budgetary baseline...The situation is deeply frustrating for many Republicans. Sen. Jeff Sessions, ranking Republican on the Senate Budget Committee, has conducted a virtual crusade on the issue, loudly and consistently and unsuccessfully demanding that Reid obey the law and pass a budget. Now, with a fight over the debt ceiling approaching, Sessions wants to try something new. "I think it should be a firm principle that we should not raise the debt ceiling until we have a plan on how the new borrowed money will be spent," Sessions told me Monday in a phone conversation from his home in Alabama. "If the government wants to borrow money so it can spend more, then the government ought to tell the Congress and the American people how they will spend it."
That would be a BIG COIN!
I propose the image on the tail side of this coin be a turtle on a stump displayed proudly in front of the US Capitol. Could be the new national symbol. All in favor say aye. /S
Let’s take it to its logical but absurd conclusion. Please sign and promote the White House Petition-
“Produce a Trillion Dollar Coin for Every U.S. Citizen for the Purpose of Paying Taxes”
“Activities and services pledged by the U.S. government exceed the ability to pay based on current tax revenue. The budget deficit is added to the national debt, and federal taxes are used in part to pay for the debt and interest.
“Trillion dollar” coins are being considered to pay the national debt, however, we petition the U.S. Government to mint an adequate quantity of “trillion dollar” coins to pay off the national debt, and enough additional coins to provide one for each citizen of the United States.
These coins can only be used to pay federal, state, and miscellaneous taxes for the lifetime of the recipient. Residual funds from each coin will be available to heirs of the recipients, and will be exempt from inheritance tax.”
DO IT!!! Something needs to crash us before all the middle aged and older folk pass and leave generations of government product consumer units...
As Platinum is going for $1573.50 an ounce I am wondering how big these coins will have to be?From what I can find ...
(1 trillion / 1,573.50 dollars per oz) / 16 oz per lb / 2000 lbs per ton = 19,860 tons
They could take care of a huge part of our deficit and debt with it. Just take it to Herberger’s, buy a toaster for the treasury department, pay for it with the coin and get change. What could be better?
Sounds like a plan! I can retire and live rich!
After jack-hole has finished up his second and final term — and yes, it will be his final term, and will be the final term and office for anyone who votes to repeal POTUS term limits — job one isn’t to repeal Obamacare, job one is to send troops if necessary to pry open the Hawaiian records to see what’s in there. If there’s no record of Zero’s birth, EVERYTHING he “signed into law” (unless passed by veto-proof majorities) will become null and void. Uh-oh, gotta ping null and void now, before someone else does.
How stupid are people that they think that because someone "says" this is a trillion dollar coin, that it "happens" to be worth that?
Anyone who takes this seriously should be bopped on the head with a 2x4.
Too bad there are not enough planks on earth.
A TWO Trillion Dollar Coin!
Excellent observation, Maceman
They should use paper money - like this
****** “As Platinum is going for $1573.50 an ounce I am wondering how big these coins will have to be?”
“(1 trillion / 1,573.50 dollars per oz) / 16 oz per lb / 2000 lbs per ton = 19,860 tons”
Since we have only mined / collected 16 Tons of Platinum in the history of mankind lets continue the Math lesson 19,860 tons of Platinum at current market Value is about 317,760 times per coin than we now have... so if our debt is let’s say 20 Trillion (20 Coins) 317,760 x 20 = 6,355,200 times more Platinum that we have ever mined or ever had ... I’m all for calling the Aliens to bail us out on this one.
Now I wish I knew how to post the Alien Guy picture
Sorry plus or minus 16 Tons ...
(Math was never my thing)
So the coins would be huge. Like those Yap “stone coins”.
“As Platinum is going for $1573.50 an ounce I am wondering how big these coins will have to be?”
1 ounce (or less). No one is saying the coin will be WORTH a trillion, just that its face value will be a trillion.
This is money printing, not minting a coin that’s really worth a trillion in today’s dollars. Effectively that lying skidmark Paul Krugman is advising that we add about nine zeros onto our currency in order to settle our debts, following the lead of other failed nations like the Weimar Republic and modern-day Zimbabwe.
This is effectively the same as changing the face value of the penny to about $6,500,000.
*****”So the coins would be huge. Like those Yap stone coins*****
Yap “Stone Coins” about the size of a Formation of Aircraft Carriers
(Imaginary Coins because there wouldn’t be enough Platinum on Earth to even paint them with)