Sorry, everyone: there will be no minting of any trillion-dollar platinum coins. The Washington Post’s Ezra Klein reports that the idea, which has been floating around as a hilarious and serious solution to the upcoming debt-ceiling impasse, was officially nixed today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” said Treasury spokesman Anthony Coley.
As Klein points out, Coley’s mention of the Federal Reserve’s role is something that has been largely overlooked during our nation’s often ill-informed discussion of the proposal (it’s easy to get distracted when there are elaborate heist scenarios to imagine.) “For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.” This is a good time to remember that the creation of the new currency would only be legal based on a few sentences of a 1995 measure aimed at encouraging coin collectors, and that taking advantage of Representative Michael Castle’s poor imagination would certainly not honor the intent of the law. (Though, as has been repeatedly pointed out by DI Jon and others, so is Republican threat to hold the economy hostage.)
This leaves us back at un-fun square one. Despite calls from some Democrats to do so, the Obama administration has repeatedly said that the President will not invoke the 14th Amendment to raise the debt ceiling on his own. (Many worry that that solution, like the platinum coin idea, would completely sink the public’s already very weak faith in the prospect of reasonable cooperation between the legislative and executive branches.) So, Congress will have to deal with the debt ceiling the old-fashioned way — unless they vote to turn responsibility over to the White House (“a resolution the Obama administration would happily accept.”)
What’s next on the Hill? No one seems to know. In an e-mail to Business Insider, coin-supporter Paul Krugman asked, “So, are they planning moral obligation coupons/scrip, are they willing to court disaster, or are they just hopeless negotiators? I guess we’ll find out.” The White House itself certainly isn’t offering up any more creative solutions. “There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default,” said Jay Carney following the Treasury announcement. “When Congressional Republicans played politics with this issue last time putting us at the edge of default, it was a blow to our economic recovery, causing our nation to be downgraded. The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job.”