Some are taking the trillion dollar coin trick as policy very seriously. Here is Bloomberg.
[W]e need to compare the platinum coin option against others on the table. For example, we could hit the debt ceiling and the government could start leaving about 40 percent of its bills unpaid.
The president could accede to Republican demands for near-term spending cuts (of an as-yet-unspecified nature) in addition to the amounts from the Budget Control Act sequesters, which would cause another recession.
Or he could assert authority under the 14th Amendment to continue issuing debt, notwithstanding the debt ceiling, which would lead to court battles and probably impeachment. (The 14th Amendment play sounds less “silly” than the platinum coin, but it’s actually on much shakier legal ground.)
Minting the platinum coin would be less economically damaging than any of the above options, which is why Obama should announce he will pursue it if the debt ceiling is not raised. Hopefully, inflation hawks will be so alarmed by the president’s intention to use his direct monetary authority that they will choose to cut a deal and we’ll never actually get to the minting stage.
But if Republicans call Obama’s bluff, he should be ready to mint that coin – - and to save the economy by doing so.
That this creates money out of thin air isn’t really the problem in and of itself. As is seen in the post below this one, all American money is created out of thin air. This method of conjuring dollars is just more obvious than the others. It isn’t really any different, however.
The problem is that juvenile delinquents think they have found a way to transfer all budget making from the legislative to decrees from the executive branch. They seem to like the idea of all power vested in a king. They should recall that Obama is a mortal god/king and will someday be gone but the power they put in the hands of the executive will remain.Share