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A Quick Debt Ceiling Fix

Posted at 2:15 p.m. on Dec. 5, 2012

James Pethokoukis at the American Enterprise Institute highlights a debt ceiling solution that doesn’t require any spending cuts, tax increases, or even congressional action: Mint a few trillion dollar platinum coins.

“There are limits on how much paper money the U.S. can circulate and rules that govern coinage on gold, silver, and copper.  BUT, the Treasury has broad discretion on coins made from platinum.  The theory goes that the U.S. Mint would create a handful of trillion dollar (or more) platinum coins.  The President would then order the coins deposited at the Fed, who would then put the coin (s) in the Treasury who now can pay all their bills and a default is removed from the equation.”

Cullen Roche: “It sounds rather silly of course.  But it highlights how ridiculous the whole debt ceiling debate is to begin with.  After all, the debt ceiling is only reached because Congress ALREADY voted to spend the money that would cause us to get there.”

10comments
Budget & Taxes, Economy, Financial Markets

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  • MarcTGFG

    Oh please, do it Mr. President. It will be so much fun watching all those Republicans heads explode. And send one of these coins to me! What I don’t understand is why many people don’t understand that it is and was Congress who appropriated (=spend) that money and now they don’t wanna pay the credit card bills. Pretty simple, no? Money spend, is money due. And I don’t wanna start with the full faith and credit clause in Article IV of that pesky document called the United States Constitition.

    • Lorehead

      Paying the bills through seigniorage would not be a good precedent, but it would sure be better than a default, and I’m not at all inclined to give in to debt-ceiling blackmail.

    • ThusBloggedAnderson

      “And send one of these coins to me!”

      Hm. “Hey, uh, can you break a trillion? Small bills, please.”

  • Chredon

    This is the stupidest thing I’ve ever heard. Apparently, Mr. Pethokukis has never read the Constitution, which gives Congress the power “To coin Money, regulate the Value thereof, and of foreign Coin.” The President does not have the POWER to establish a new type of coin and to determine its value. Neither the President, nor the Secretary of the Treasury, has the Constitutional authority to start printing a new type of coin.

    • Shma

      First, this is not Pethokukis’ idea, he is quoting someone else, and does not seem supportive of it.

      Second, the ability of the treasury to mint platinum coins of any value was granted to the treasury in a law by congress, so it is perfectly constitutional. See subsection (k) here

      http://www.law.cornell.edu/uscode/text/31/5112

    • Golbez

      Stupidest thing you’ve ever heard? Even if your argument were true, that still doesn’t trump the entirety of the GOP’s previous statements, positions, platforms, protesters, Sarah Palins, etc. Please try again.

  • Gambler2

    Do it, Mr. President! That will take the wind out of their sails.

  • adastraperapathy

    Do it! Do it! Do it! Do it!

    The debt ceiling, so much as there is one, should be tied to the budgeting process, as it was when Democrats were in power of Congress for forty years.

    To have a stupid show vote every year or two that undermines the credibility of the US government is something so counterproductive to our national strength that only the modern Republican Party could think of it.

  • http://mediajunkie.com/ xian

    If Congress doesn’t raise the debt ceiling then Congress will have passed two contradictory laws. One was a budget bill that made spending commitment with the full faith and credit of the united states. The other is a debt ceiling bill that prohibits the executive from meeting the treasury’s financial obligations.

    What is the executive to do when asked to execute two mutually self-contradictory laws?

  • http://www.facebook.com/BaronSieggy Siegfried Heydrich

    Nah, a trillion is a bit much. Make them only a billion, and put Boehner’s face on it (after all, it’s only right), and forever after, a billion dollars would be referred to as a ‘Boner’. As in “the new aircraft carrier is expected to cost around seven Boners”.

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