The Tuesday edition of the Morning Jolt features a look at how Chuck Hagel is the president’s “self-esteem pick” for the Pentagon, how the president compares his performance to that of a major actress, and then this bit of unreal reality…
Fiscal Insanity Is Now the Coin of the Realm
I’ll let Stephen Green get you up to speed:
In case you missed it, yes, there have been calls for the Treasury to mint itself a platinum coin, stamp a one and a dozen zeroes on it, and call it money. Yes, Tim Geithner has the Constitutional authority to do so. Yes, he’d be removing a trillion dollars from productive use by the stealth tax of inflation.
To date, most of the idiots and vile progs (but I repeat myself) hopping on this particular bandwagon have been low-level blogger types. Like me, but viler and even dumber. Now they have Paul Krugman on their side, which will drum up big support in Blue States where political idiocy is what people have with their coffee every morning.
I’ll give you a moment for your head to stop spinning. Now, our Dan Foster lays out a couple reasons why this is a bad idea:
Of course, there’s a hitch or two in the plan to mint The Coin. For one thing, numismatizing the debt by striking trillion-dollar debt discs is not exactly what former representative Mike Castle (R., Del.) had in mind in 1995 when he introduced the legislation that turned into the provision in public law 104-208. Dylan Matthews of theWashington Post tracked down this “unsuspecting godfather” of the platinum gambit, and Castle confirmed as much. “That was never the intent of anything that I drafted or that anyone who worked with me drafted,” Castle told Matthews. Indeed, the legislation was designed to give the Treasury flexibility to create more affordable platinum coins for collectors. To use that authority to backdoor the 17th and 18th trillion dollars of the national debt would be, according to Castle, “so far-fetched and so black helicopter-ish a type of methodology of trying to resolve something like this that I think the public would totally scoff at it.”
Some on the left understand this. Take, for instance, Kevin Drum of Mother Jones, who flatly titles a post on the subject “No, a $1 Trillion Platinum Coin Is Not Legal.” Drum, doubting there is enough of the requisite straitjacket brand of strict constructionism in the U.S. court system to uphold such a tortured reading of the statute, dismisses the ploy as “the kind of thing that Herman Cain would come up with” (the dread reductio ad Hermanum, a conversation-stopper in progressive circles).
They say that because the coin isn’t meant for general circulation – “hey, can anybody make change for a trillion?” – it won’t be inflationary. Yet like a lot of folks with a lot more financial savvy than myself, I’m a bit wary of telling the world financial markets, “hey, don’t worry about the U.S. federal government’s ability to pay for everything that it wants to buy and to pay back the unimaginable sums it has borrowed; we’ve got a magic trillion dollar coin now, so we’ve got a trillion bucks more than we did a little while ago.”
And Dan explains why he thinks this idea is going nowhere: “If the president minted The Coin, it might win him a few cheers from the same folks on the professional left who have called him a wuss for four years. But it would convince just about everybody else that he’s back on the Choom Gang. That’s why it won’t ever happen unless the luck of the GOP is as good in 2013 as it was bad in 2012.”
For what it’s worth, at least one Republican congressman wants to make such a move illegal:
U.S. Rep. Greg Walden (R-Ore.) today announced plans to introduce a bill to stop a proposal to mint high-value platinum coins to pay the federal government’s bills.
“Some people are in denial about the need to reduce spending and balance the budget. 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. I’m introducing a bill to stop it in its tracks,” Rep. Walden said.
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well. 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. We must reduce spending and get our fiscal house in order,” Rep. Walden said.
Frank J.: “If you put a trillion dollar coin into a soda vending machine, you now own all soda manufacturers.”