When I first heard this I thought it was a joke, but I guess it’s not.-Lou
Congressman To Introduce Law To Ban The Trillion Dollar Platinum Coin
The campaign to get around the debt ceiling by using a Trillion Dollar Platinum Coin has reached a new level of intensity today.
Earlier today, Paul Krugman hopped on board and said Obama must be ready to mint the coin if the GOP decides to try to force the country into defaulting on its obligations.
To take a step back, the US is about to hit the debt ceiling limit that Congress set in 2011, at which point it will be illegal for the country to issue more debt to pay its bills–unless the Congress agrees to hike the ceiling again.
In the past, hiking the debt ceiling was pretty painless, but some in the GOP are staunchly opposed to doing it, raising the specter that the US will default on its obligations.
It’s because of this that some people are getting more excited about the “Platinum Option,” which refers to a technical loophole in the law that allows the Treasury to create platinum coins in any denomination, theoretically up to a trillion and beyond.
The “Platinum Option” would allow the Treasury to temporarily print money to pay the country’s bills, thus getting around the debt ceiling.
For obvious reasons, the GOP doesn’t like this. And now Congressman Greg Walden of Oregon has introduced a law to prevent the Treasury from creating a platinum coin to pay the debt.
We’ve posted his full press release below, but the key thing here is that the idea is now legitimized, as a GOP Congressman implicitly acknowledges that the coin idea is currently legal.
Note that in his press release, the Congressman uses the flawed analogy of comparing the US government to a small business. Unlike governments, small businesses can’t print money. And small businesses can’t “deficit spend,” the way governments can.