Wednesday, January 9, 2013

Platinum Coin Mania and Why I'm not a Fan

     Many Democrats are putting their voices behind it. Nancy Pelosi spoke for the constitutional amendment on Sunday:

     “If I were president, I’d use the 14th Amendment, which says that the debt of the United States will always be paid,” House Minority Leader Nancy Pelosi said Sunday on “Face the Nation.” “I would just go do it. But the Congress has incurred much of this debt. And so what are you saying,

    ‘We incurred it, but we’re not going to pay it?’

     "Pelosi has declined to comment on the proposal to mint a $1 trillion coin, which would create more funds instead of requiring Congress to authorize more borrowing."

     "So far, the White House hasn’t weighed in on the $1 trillion coin. During the last debt ceiling debate, Obama dismissed evoking the 14th Amendment as an option."

    “I have talked to my lawyers,” Obama said at the time. “They are not persuaded that that is a winning argument.”

    Read more:

    I've become convinced that all this speculation is unnecessary. What it does is give the illusion that the GOP has leverage.

   "Obama has said he won’t negotiate with Republicans over the debt ceiling, but some Republicans who felt they got little out of the negotiations over the fiscal cliff are gearing up for a fight. House conservatives want to see deeper cuts in government spending and some are already discussing shutting down government to achieve their goals."
   To be honest I think maybe talking about the platinum coin is a waste of time. Not because I agree with Kevin Drum that any judge would throw it out as the intent was clearly just about sales of commemorative coins and judges think about intent.

   As someone else pointed out-whose name escapes me!-if intent matters, is a judge going to give a ruling when the clear effect of it will be to blow up the economy against the wishes of the President of the United States?

  Krugman, Greg Sargent, and others are certainly right that the platinum coin is less ridiculous than the GOP's debt ceiling chicken.

  "New York Times columnist and economist Paul Krugman in a Monday column endorsed Obama considering the coin as an option."

   “He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous,” Krugman wrote. “The decision should be obvious.”

    Agreed, but I think the important point is that the GOP has made a totally idle threat and we should treat it as such. That's how Obama is treating it. Don't even say pass the debt ceiling or I'll mint a coin!  just say you know you have to raise it. I'm calling your bluff. If you really want to force a government default then you can explain that to the voters. However I'm not going to negotiate with you on it at all. There will be no offers in exchange for raising it. At some point a bill will be put forward to raise the debt ceiling witn no amendments or attachments. If you don't vote for it you will have a lot to answer to with the American people.

    There is no "showdown" or anything to negotiate with. The debt ceiling will be voted on cleanly. At the end of the day, the GOP will vote for it. Boehner already suggested this by admitting that the debt ceiling is not "the main leverage" and that maybe they'll pass the debt ceiling on a monthly basis.

    Having said all this, there may be some fun to be had from this-provided Democrats don't really drink the koolaid and think that it's really going to come down to a platinum coin-again, we won't need it.

     "Rep. Greg Walden (R-Ore.) plans to file legislation to stop the $1 trillion coin or any other similar move by the Treasury Department to avoid the fiscal cliff."

    “Some people are in denial about the need to reduce spending and balance the budget,” Walden said in a statement. “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.”

    If Republicans are worrying about the platinum coin, that's not such a bad thing. However, Democrats need to get it that the platinum coin is nothing but a red herring as the debt ceiling is a paper elephant. If Republicans are triked into worrying about the red herring, great. Democrats though should understand this.

   Overall, then I think the President's strategy is working. I don't know why he had to divulge that comment about his lawyers advising him against the constitutional option. However, I don't think he needs it as an added stick. It's an idle threat and he's right to treat it as idle.

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