Two coins to rub together

Could the Treasury really counter Republican insanity on the debt limit with an idea that sounds completely insane? Two coins is all it would take. Two coins “worth” $1 trillion apiece.

Via Matt Yglesias, I’ll allow Yale Law School professor Jack Balkin explain it:

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.

You know how conservatives say the federal government can always just print money to pay its bills? It turns out that’s not true. There are statutory limits on how much money the Treasury can print. But there is no limit on how many coins, or what value: “(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.”

Yeah, it’s crazy. But then again, so is refusing to increase the debt ceiling. This might be a better way out than the 14th Amendment argument.

Of course, even better would be the Republican Party coming to its senses, taking the extremely conciliatory offer put on the table by Obama and Senate Democrats and avert economic disaster.

Except, of course, for the fact that significant spending cuts right now actually invite economic disaster of a different kind even as we realize that the recession we’re just pulling out of was deeper and longer than even the experts knew.

Come to think of it, maybe it isn’t just the Republican Party that’s gone insane.

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