Coining a costly dodge
With apologies to the Bard: While all that glitters is not gold, all that arguing about the debt ceiling could be trumped by platinum.
Strange but true:
The U.S. Treasury has the authority to issue platinum coins for any denomination of money. The Obama administration reportedly might try to stretch that legal provision, written to facilitate the minting of decorative and commemorative coins, to avert the need for congressional approval of yet another debt-ceiling increase.
As PIMCO CEO, Mohamed El-Erian, named last month by President Obama to lead his Global Development Council, wrote Friday on the CNN Money/Fortune website:
“The U.S. Treasury would issue to itself a very large platinum coin — say a single, trillion dollar denomination. The coin would be deposited in the Treasury’s account at the Federal Reserve. Against this ‘credit,’ the Treasury would withdraw from the central bank more conventional forms of money and use them to meet payments obligations that have already been approved by law.”
And: “The key here is that the Treasury would raise money without borrowing. Thus, the increasingly binding debt limit would not apply.”
Hey, if the debt limit is really “increasingly binding,” why is our national debt now a record $16.44 trillion — and still climbing at a rapid rate?
And if the Republican House dares to seek spending cuts as a condition of again raising the debt ceiling next month, should the president really go platinum with a legal clause that wasn’t designed for this profligate purpose?
If he does, he should instruct the Treasury to make just one trillion-dollar coin — and to make it no bigger than one thin dime. That way, he could limit the taxpayers’ direct contribution to this gimmick (platinum was going for $1,625 an ounce Friday afternoon).
And if we must have a face on a trillion-dollar coin, why not make it the first president to preside over a trillion-dollar federal deficit — Mr. Obama, now four-for-four in that dubious category?
But, if not an image of President Obama, please, put anything or anybody on that coin except Ben Franklin. The man who wisely warned that “a penny saved is a penny earned” shouldn’t be associated with our nation’s accelerating retreat from the virtue of thrift.
Better yet, scrap this appalling fiscal dodge before it goes any further.