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President Obama delivers his 2011 State of the Union address
Whether he likes the idea or not, President Obama might be legally required to mint a trillion dollar coin if Congress fails to raise debt limit and he has no other way to meet Congressional spending mandates
Matt Yglesias argues that President Obama appears to be legally required to pursue the trillion dollar coin option in the event that Republicans refuse to raise the debt limit:
  1. Under the Congressional Budget and Impoundment Act of 1974 it's illegal for the president to spend less money than congress has appropriated—the Nixon administration had this idea that it could enact unilateral spending cuts, but it can't.
  2. Under the terms of the statutory debt ceiling, the president can't borrow extra money without congressional authorization.
  3. I don't believe there's a specific statutory prohibition on collecting taxes that congress hasn't authorized, but this principle is pretty literally the foundation of the entire fabric of common law.
  4. The Treasury Secretary can instruct the mint to create platinum coins of any denomination.
Given those facts, Yglesias concludes, the coin must be minted if Republicans refuse to raise the debt limit.

Keep in mind that under this theory, the coin would only be required if we bump up against the debt ceiling and there are no other options available for continuing spending money previously authorized by Congress. For example, we're already up against the debt limit, but the coin hasn't been necessary because we have been able to continue normal functions thanks to "extraordinary" measures. If Congress hasn't raised the debt limit by the time those measures cease to be effective, the coin would only be necessary if there weren't another way to to continue operating government.

Also keep in mind that this theory wouldn't in any way constrain Obama from negotiating over the debt limit, nor would it absolve Congress of the responsibility to eventually raise it (unless they want to embrace seignorage as as a long-term fiscal policy). But according to this theory, in the absence of an increase in the debt limit or some other way of continuing to meet Congressional mandated obligations, the president seems to have no other choice but to mint the coin.

Please sign the petition asking President Obama to mint the trillion dollar coin if Republicans attempt to force the nation into default.

Originally posted to The Jed Report on Wed Jan 09, 2013 at 09:31 AM PST.

Also republished by Daily Kos.

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Comment Preferences

    •  Probably not but the fact that it "could" (10+ / 0-)

      gives us a lot of leverage.  :)

    •  Shush. (6+ / 0-)

      You're not allowed to say around here that a legislative proposal is unworkable, impractical, goes too far, or can never happen.
      Even if it's true.
      Didn't you know that?

      "Everything I do is blown out of proportion. It really hurts my feelings." - Paris Hilton

      by kestrel9000 on Wed Jan 09, 2013 at 09:42:47 AM PST

      [ Parent ]

      •  If the past 13 years have taught me anything (4+ / 0-)
        Recommended by:
        TomP, Egalitare, Kay Observer2, dean033

        it's "never say never".

      •  I just think the focus on the trillion dollar coin (10+ / 0-)

        is silly, and I don't think President Obama would go for that. I'd rather have the front page focus on what spending cuts should be made instead of SS and Medicare, and push for those instead.

        •  Of course it's silly ... (15+ / 0-)

          But as Krugman wrote yesterday:

          Here’s how to think about that: we have a situation in which a terrorist may be about to walk into a crowded room and threaten to blow up a bomb he’s holding. It turns out, however, that the Secret Service has figured out a way to disarm this maniac — a way that for some reason will require that the Secretary of the Treasury briefly wear a clown suit. (My fictional plotting skills have let me down, but there has to be some way to work this in). And the response of the nervous Nellies is, “My god, we can’t dress the secretary up as a clown!” Even when it will make him a hero who saves the day?
          Sure it's undignified to engage in such a ploy, but is it really more important that the administration retain its dignity than it is to prevent economic terrorism from succeeding?

          “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

          by jrooth on Wed Jan 09, 2013 at 09:55:11 AM PST

          [ Parent ]

          •  Krugman thinks it's silly only because he (6+ / 0-)

            has only recently begun thinking through the logic of fiat currency -- he's only begun admitting that bond vigilante's role is different with fiat, that the gov makes money out of thin air, and he wiggles about some other stuff.

            In other words, he is slowly moving more towards MMT.

            The Coin idea isn't silly for MMT, because MMT realizes that all money is like the Coin -- simply produced out of thin air.

            •  Well, independent of how theoretically sound (5+ / 0-)

              it may be, there is something basically undignified about twisting a law intended to allow the striking of commemorative coins of nominal denomination to this far more consequential purpose.  But as I said we ought not let that stop us if momentary indignity can save us from disaster.

              As for MMT - I am studying up on it but it but I'm not ready to embrace it totally.  I've seen too many other theories of elegance and simplicity founder on the stormy lee shores of reality.

              “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

              by jrooth on Wed Jan 09, 2013 at 10:35:38 AM PST

              [ Parent ]

              •  At it's most basic, MMT is simply a description (1+ / 0-)
                Recommended by:
                joanneleon

                of how a fiat money works.

                •  Yes I understand that. (2+ / 0-)
                  Recommended by:
                  pdx kirk, Kay Observer2

                  But there is no edict from the omnipotent power of your choice decreeing that even such a lovely and useful concept as fiat money will always work as we would like it to in every real-world circumstance.

                  Models are wonderful things and I use them all the time professionally and in personal life (as do all thinking beings.)  That doesn't mean they're always right.  And when we're trying to model anything as messy as human behavior, even in aggregate, there's a lot of potential for the appearance of previously unanticipated complications.

                  So I'll ask you to excuse my caution with regards to this (and any) wonderful new idea.

                  “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

                  by jrooth on Wed Jan 09, 2013 at 10:55:13 AM PST

                  [ Parent ]

                  •  Got ya. I'm not an economist, so I just go (5+ / 0-)
                    Recommended by:
                    jrooth, Garrett, pdx kirk, Remillard, mbguenth

                    for the big picture:

                    Fiat money is created out of thin air.

                    The Fed Gov can never go broke.

                    Taxes don't pay for Fed Gov spending.

                    The deficit hawks are either lying or ignorant when they compare the Fed Gov budget to a household's, and same with most Dems.

                    And some other pretty simple facts.

                    •  But we have a set of leaders (2+ / 0-)
                      Recommended by:
                      jrooth, slinkerwink

                      that no matter how valid those facts are, have been pushing the idea that the federal budget is like a family budget which requires a concept that the money in the system is finite (even though we know it is not).

                      We have a ruling class that is hyperparanoid of inflation.

                      And basically, if the president decided to do the trillion dollar coin and start talking about MMT, would that not completely contradict everything he has been lecturing the country about for the last four years?


                      "Justice is a commodity"

                      by joanneleon on Wed Jan 09, 2013 at 01:18:12 PM PST

                      [ Parent ]

                    •  Actually, in MMT (1+ / 0-)
                      Recommended by:
                      jrooth

                      fiat money has value because the government demands it be used to pay taxes and because the government demands a vendor accept it as having value (for government purchases as well as purchases by any person presenting that currency).  That's why your dollars have a statement on the front saying the note is legal tender for all debts public and private.  Government can never go broke as long as it can make or persuade citizens and other countries it has the power to compel tax collection in the currency it specifies, and as long as it has the power to compel vendors to accept its currency.  Weaken government enough, cut taxes enough, and you can find yourself in a world of hurt.  That's the world Republicans and the idiot Grover Norquist want to bring to pass, though they clearly haven't imagined the impact their policies will have on defense expenditures.  The Euro is a currency under joint governments control, and no one government issues it.  If we turned the Fed into a currency that required all 50 states to agree to change the volume of issuance (and made votes by states roughly proportional to their economies), then we might have problems like those in Europe.  I would hate to live in Mississippi or the other Red states that get more from the Federal government than they contribute (it would make them get the same treatment Europeans are giving Greece).  Currency board systems like Hong Kong's peg their currency to the "value" of other currencies as determined by trade in that currency.  Since international trade is conducted in currencies of account as negotiated by the trade partners, there is a lot more limitation on value imposition by government action in the trade sphere.  The  Hong Kong system is not a fiat system, even though it is based on the fiat currency of the US, because of that intervening market/trade function.  MMT has a lot of complex implications and ramifications that need a great deal of work yet to understand.  But the fact is, MMT explains a lot of phenomena standard economics fails to explain and more importantly, fails to predict.

                      America needs a UNION NEWS channel. We (unions) have the money, we have the talent. Don't buy 30 second time slots on corporate media, union leaders; fund your own cable news channel and tell the real story 24/7/365

                      by monkeybrainpolitics on Wed Jan 09, 2013 at 01:30:18 PM PST

                      [ Parent ]

              •  Like Shutting Down the world economy in a hostage (5+ / 0-)
                Recommended by:
                DRo, pdx kirk, Kay Observer2, aaalb, cazcee

                crisis is dignified?

                /Pshaw

                Happy little moron, Lucky little man.
                I wish I was a moron, MY GOD, Perhaps I am!
                —Spike Milligan

                by polecat on Wed Jan 09, 2013 at 11:03:08 AM PST

                [ Parent ]

            •  Right you are, katiec. And... (3+ / 0-)
              Recommended by:
              katiec, Remillard, joanneleon

              there is more. A couple of times in his blog he has written about the times he was wrong on some issue. He proudly said that new facts and new understanding led him to do the right thing and change his mind. And he is right, and he has lived up to his words.

              So, he has a tough problem right now. He built his career as an economist of some variety. I can't name it but I'm sure that he knows what label applies. But whatever it is, those old labels are over now, and new ones need to be developed. So, he doesn't know what to do about becoming a new kind of economist.

              I think he should become an expert in the macro view of democrato-Capitalism.

              But whatever the label, he will have to abandon much of what he built his career on.

              Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

              by hestal on Wed Jan 09, 2013 at 10:56:59 AM PST

              [ Parent ]

            •  The bond markets will go ape. But they're already (0+ / 0-)

              in funky shape with the yields on the T-bill being so low, so I say go for it.

              It would be nice to fully fund things that Congress hasn't gotten around to as well, but that may not be legal.

              Happy little moron, Lucky little man.
              I wish I was a moron, MY GOD, Perhaps I am!
              —Spike Milligan

              by polecat on Wed Jan 09, 2013 at 11:02:34 AM PST

              [ Parent ]

        •  Cutting SS and Medicare is the goal. (13+ / 0-)

          The idea is to create an crisis in which, in order to get the debt ceiling raised, the President must agree to big cuts in SS and medicare. The idea of the trillion dollar coin is to avoid having to accept these cuts as the price for borrowing money we have already spent.

        •  Write as many diaries as you want on (2+ / 0-)
          Recommended by:
          katiec, Kay Observer2

          those subjects.

          But let others discuss what they want to discuss. It is silly for you to suggest that everybody else should shut up and follow your lead. But different strokes for different folks.

          Easy does it.

          Live and let live.

          The land of the free.

          etc.

          Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

          by hestal on Wed Jan 09, 2013 at 10:44:52 AM PST

          [ Parent ]

          •  Uh, I'd greatly prefer that she continue to say (1+ / 0-)
            Recommended by:
            slinkerwink

            her thoughts here and that other continue to do so also. Not sure what you're aiming for.

            “liberals are the people who think that cruelty is the worst thing that we do” --Richard Rorty Also, I moved from NYC, so my username is inaccurate.

            by jeff in nyc on Wed Jan 09, 2013 at 01:17:13 PM PST

            [ Parent ]

          •  Discussion of it is not a problem (1+ / 0-)
            Recommended by:
            slinkerwink

            but raising expectations that this president would even consider trying it is, imho, kind of misleading.  Now maybe I'm wrong and maybe he would step forward with a move like this and become a populist leader for the people.  But has he ever given even the slightest indication that he would consider this?


            "Justice is a commodity"

            by joanneleon on Wed Jan 09, 2013 at 01:20:57 PM PST

            [ Parent ]

            •  Correction (0+ / 0-)

              The second part of the comment above was meant for Donner in this comment below.

              http://www.dailykos.com/...


              "Justice is a commodity"

              by joanneleon on Wed Jan 09, 2013 at 01:25:38 PM PST

              [ Parent ]

            •  The point of having discussions like this (1+ / 0-)
              Recommended by:
              joanneleon

              or any discussion of ideas outside the conventional window of acceptable ideas is to move that window.

              If enough people shift (as I have done over time) from "that's crazy" to "it sounds crazy but damned if it isn't actually a legal and rational answer to the mess we're in" then who knows what the president might do?

              “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

              by jrooth on Wed Jan 09, 2013 at 01:29:20 PM PST

              [ Parent ]

              •  No, it's not crazy (1+ / 0-)
                Recommended by:
                slinkerwink

                and this kind of discussion is good and healthy, innovative and I strongly agree that we need to do these things.  

                But it can also be argued that to do this right now with any expectation that it will happen is silly.  We're up against the wall now.  It will only be a matter of weeks before votes will be held. Deals are being made right now.  

                So the argument that it makes a hell of a lot more sense to use our energy to organize push back and protests makes a lot of sense.  

                Discussions that will end up being largely theoretical don't help us fight back against cuts to our earned benefits/entitlements, most likely.

                Again, if I'm wrong here and there is any reasonable chance that Obama would consider this, I retract what I've said and I would consider joining whatever movement you put together for this.  But right now it looks nearly impossible that he would do it and we are wasting time by not agitating as much as we possibly can.  I even think that those who would like to distract and divert energies away from organized protest would actually love to see the activist wing of the party huddled down in discussions like these while they march forward making deals.


                "Justice is a commodity"

                by joanneleon on Wed Jan 09, 2013 at 01:36:20 PM PST

                [ Parent ]

                •  Blah, blah, blah, blah, nt (0+ / 0-)

                  Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

                  by hestal on Wed Jan 09, 2013 at 01:37:55 PM PST

                  [ Parent ]

                •  But what policy are we to protest for? (1+ / 0-)
                  Recommended by:
                  joanneleon

                  Yes, we're up against an artificial cliff yet again.  But the only proper answer to this particular crisis is to eliminate the debt ceiling entirely.  It's a stupid concept - as President Obama has articulated quite effectively.  But that depends entirely on the Republicans abandoning their insane position - something no amount of protest by the left is likely to accomplish.

                  And if our aim is to convince the president and the Democratic leadership that there should be no cuts offered in exchange for the Republicans doing what's right then having wide public discussion of a legal (if somewhat unconventional) way out should the Republicans refuse to act responsibly is only helpful.

                  “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

                  by jrooth on Wed Jan 09, 2013 at 01:48:29 PM PST

                  [ Parent ]

                  •  At this late stage of the game (1+ / 0-)
                    Recommended by:
                    slinkerwink

                    I think the only option is to protest against -- against cutting social programs and paying for the military machine and the tax cuts for the wealthy and the corps on the backs of the poor and the middle class, because that is what they would be doing.

                    If we were to protest for something it would be the fact that the income inequality gap is larger now than ever, corporate profits are at record highs, the war budget has doubled since Bush took office and this party is reluctant to even cut it back to 2006 levels, protest against the expansion of the war machine (covert or overt), protest for a tiny transaction tax on high speed trading on Wall Street, protest for using the power of the economies of scale in negotiating for better prices on health care and drugs.  

                    We should be protesting against endless war and obscene levels of war spending, against corporate welfare, etc.  We should be shining a big light on this farce and on the fact that the productivity $ gains in the past 30 years have gone almost entirely to the 1%.  And a whole lot of other things.  We should take up a lot of the causes that Occupy Wall Street was fighting for.


                    "Justice is a commodity"

                    by joanneleon on Wed Jan 09, 2013 at 01:59:28 PM PST

                    [ Parent ]

                    •  I'm for all of that ... (0+ / 0-)

                      but I really don't see how we can expect that to be effective in the face of Republican economic terrorism.  How many times have we heard the the president was forced to make concessions in the face of Republican willingness to wreck everything if they don't get their way?

                      Seems to me having the fact that they don't really have the power to do that out there and widely recognized is valuable.

                      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

                      by jrooth on Wed Jan 09, 2013 at 02:07:48 PM PST

                      [ Parent ]

          •  if she had actually suggested that (1+ / 0-)
            Recommended by:
            allenjo
            It is silly for you to suggest that everybody else should shut up and follow your lead.
            you might have a point. She didn't.

            Get out there and get peace, think peace, live peace, and breathe peace, and you'll get it as soon as you like.” ~ John Lennon

            by Lady Libertine on Wed Jan 09, 2013 at 02:04:24 PM PST

            [ Parent ]

        •  F--- that (2+ / 0-)
          Recommended by:
          Ian S, trevzb

          I would rather have the front page focus on the idiocy of austerity in the face of 25 million unemployed.  And, not have the front page of a so-called progressive blog carrying water for conservative austerity mongering which will drive the country into recession causing more unemployment and greater suffering and higher deficits.

          Maybe you should head over to Red State.

          Yes, the above sentence is hyperbole.  I have read your other diaries. But, any spending cuts without corresponding spending increases are dumb.  Basically, the status quo on spending and taxes is better than austerity.,

          •  Telling me to head over to Red State is (3+ / 0-)
            Recommended by:
            joanneleon, jrooth, Lady Libertine

            stupid.

          •  The issue is (2+ / 0-)
            Recommended by:
            slinkerwink, allenjo

            What is the probability that this president would even consider such a move?

            Theorizing and innovating is a great thing.  I don't think that anybody has an issue with that.  But most of the people at dkos claim to be pragmatists.  

            And you know, the Red State BS you're throwing around?  F--- that.  The people that BS is being thrown at are so far from anyone at Red State that it makes this whole ploy laughable.


            "Justice is a commodity"

            by joanneleon on Wed Jan 09, 2013 at 01:24:40 PM PST

            [ Parent ]

            •  And the Red State BS (3+ / 0-)
              Recommended by:
              slinkerwink, Lady Libertine, allenjo

              is a personal insult.  Insults are HRable and I'm sick of this particular one about Red State which has been happening a lot, ridiculously, for a week or so now.  I use my HRs very sparingly around here.  Maybe a handful a month or not even that.  But I am going to HR it every time I see it thrown at members in good standing here from now on.  I've already had it thrown at me today in a different diary.  

              I ask that others consider using community moderation to try to discourage this bullshit insult that is now widespread around here and the most ironic thing is that it is usually thrown at people who are the least centrist members here and who tend to be more progressive and also more critical of this administration.  So the context that the Red State insult is being used in is that if you criticize the president or the party, even though they are considering undermining the New Deal, the most fundamental, strongest and most successful programs this party has implemented and is known for, that somehow this makes you more like a right-wing ideologue.  So not only is it an insult, it doesn't even make the first bit of f'ing sense.


              "Justice is a commodity"

              by joanneleon on Wed Jan 09, 2013 at 01:30:59 PM PST

              [ Parent ]

          •  are you being sarcastic? (2+ / 0-)
            Recommended by:
            allenjo, joanneleon

            Hyperbole?

            Maybe you should head over to Red State.
            Because Ive been seeing this insult flung at progressive critics around here recently, more than once, and its ridiculous.

            Ill pull my HR if you retract it.

            Get out there and get peace, think peace, live peace, and breathe peace, and you'll get it as soon as you like.” ~ John Lennon

            by Lady Libertine on Wed Jan 09, 2013 at 02:12:51 PM PST

            [ Parent ]

          •  Crossed the line with that one (0+ / 0-)

            Goal - disagree, don't be disagreeable.

            The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

            by ozsea1 on Wed Jan 09, 2013 at 03:24:23 PM PST

            [ Parent ]

          •  Not intended as insult... (2+ / 0-)
            Recommended by:
            Lady Libertine, joanneleon

            It was intended as an exaggeration of the opposite of reality for effect.  I have read lots of slinkerwink and she is one of the few where the ludicrousness of the Red State statement could work because anyone who familiar with her work would realize it was the opposite of reality.

            I have not noticed the other uses of it, probably due to hide recs, so did not realize I was wading into something others have been using as a serious insults.

            I apologize for my clumsiness in the use of the medium, and did not intend any insult to slinkerwink.

            The goal was to show the dissonance of progressives buying into conservative austerity. I failed and apologize.

        •  Id prefer talk of the 14th amendment & (0+ / 0-)

          how modern repubs are like the confederate south

    •  Probably not. (9+ / 0-)

      But it's interesting, nevertheless.  I think having the discussion at least keeps the issue of the actual problem - Republican willingness to destroy the nation's economy if they don't get their way - front and center.

    •  It might happen (1+ / 0-)
      Recommended by:
      TRPChicago

      As silly as it seems now, think about after the Republicans have shut everything down, checks are being delayed and the public is screaming.

      Doesn't seem so silly in those circumstances and silly or not would be a huge PR win for Obama.

      Our reason is quite satisfied ... if we can find a few arguments that will do to recite in case our credulity is criticized... Our faith is faith in someone else's faith, and in the greatest matters this is most the case. - William James

      by radical empiricist on Wed Jan 09, 2013 at 12:47:23 PM PST

      [ Parent ]

    •  True, it won't happen (3+ / 0-)
      Recommended by:
      DRo, mightymouse, Lady Libertine

      but continuing to talk about it emphasizes how absurd the "debt ceiling crisis" is.

      The thing about quotes on the internet is you cannot confirm their validity. ~Abraham Lincoln

      by raboof on Wed Jan 09, 2013 at 12:50:46 PM PST

      [ Parent ]

      •  exactly - the debt ceiling makes no sense (0+ / 0-)

        Congress tells the prez what to spend

        Congress tells the prez pretty much what revenues he can take in.

        the difference betw. those two Congressionally-derived numbers has to be covered by borrowing.

        If Congress is truly concerned about our national debt it should come forward with alternative spending & revenue directives.

        An ambulance can only go so fast - Neil Young

        by mightymouse on Wed Jan 09, 2013 at 01:02:02 PM PST

        [ Parent ]

    •  It probably won't - but the reason is, (2+ / 0-)
      Recommended by:
      mightymouse, indie17

      that it could happen.  The Republicans will start negotiating seriously rather than have the coin be minted.

    •  We should push seignorage as a way to end (1+ / 0-)
      Recommended by:
      trevzb

      private banks' (ie Wall Street) monopoly over creating money. This is what the whole issue really comes down to: can we, as a sovereign nation, create our own money that is dedicated to the general welfare, or must we rely on bankers to create money only for private gain?

      I've watched this develop over the past few months, with incredible work done by Joe Firestone (letsgetitdone) at CorrenteWire and now FireDogLake. I've written before that the Republicans are playing a dangerous game, because once people are forced to begin looking at options outside the current monetary status quo, people will (hopefully) begin to realize what a farce they've been sold. Seignorage strikes at the very hart of the bankers' power, and now that talk of seignorage is breaking out into the open, I expect that there will be some mighty rumblings emanating from lower Manhattan and The City of London.

      Indeed,  there is already reported a move in Congress to squash the whole idea, quietly initiated by Republican Rep. Greg Walden, from Oregon.

      My view is that there will be a little of behind the scenes maneuvering to head this off, and whenever the idea of seignorage seems to be gaining currency (hah hah) we'll see some fireworks from the banksters.

      A conservative is a scab for the oligarchy.

      by NBBooks on Wed Jan 09, 2013 at 02:24:43 PM PST

      [ Parent ]

  •  mint the coin, force the GOP's hand (6+ / 0-)
    Also keep in mind that this theory wouldn't in any way constrain Obama from negotiating over the debt limit, nor would it absolve Congress of the responsibility to eventually raise it (unless they want to embrace seignorage as as a long-term fiscal policy). But according to this theory, in the absence of an increase in the debt limit or some other way of continuing to meet Congressional mandated obligations, the president seems to have no other choice but to mint the coin.

    “If someone has a gun and is trying to kill you, it would be reasonable to shoot back with your own gun.” - Dalai Lama XIV (-9.50; -7.03)‽ Warning - some snark above‽

    by annieli on Wed Jan 09, 2013 at 09:40:15 AM PST

  •  One trillion dollar coin? (13+ / 0-)

    One trillion dollars

    I like it more every day.

    And my idol Krugman loves it more every day;

    Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. 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. The decision should be obvious.
    And Rushbo likes it less and less every day;
    If you could do two coins, it would be two trillion, and so on.  And that coin would then be given to the Federal Reserve, and that would free up a trillion dollars of additional borrowing.  It would not be used to pay down the debt.  No, no, no!  It would be used for additional spending.  So Paul Krugman wrote, "Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default?"

    And Krugman said, "Yep, absolutely," and people are serious about this.  People on the left think that this is a brilliant idea, including Paul Krugman.  So, because of this, the Republicans have introduced a bill that would ban the creation of a trillion-dollar platinum coin.  Now, folks, you have to admit that this is the kind of stuff that banana republics do.

    I say let's do it!

    Obama coin

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Wed Jan 09, 2013 at 09:41:36 AM PST

    •  That shit seems so out there at first blush (8+ / 0-)

      but, like you, I'm beginning to warm to the idea.

      "Everything I do is blown out of proportion. It really hurts my feelings." - Paris Hilton

      by kestrel9000 on Wed Jan 09, 2013 at 09:43:30 AM PST

      [ Parent ]

      •  And it's absolutely legal (9+ / 0-)

        Legendary Harvard Law Professor Gives The Ultimate Verdict On Whether The Trillion Dollar Platinum Coin Is Legal

        I don’t think it makes sense to think about this as some sort of “loophole” issue. Using the statute this way doesn’t entail exploiting a loophole; it entails just reading the plain language that Congress used. The statute clearly does authorize the issuance of trillion-dollar coins. First, the statute itself doesn’t set any limit on coin value. Second, other clauses of 31 USC §5112 do set such limits, but §5112(k)—dealing with platinum coins—does not. So expressio unius strengthens the inference that there isn’t any limit here.
        Of course, Congress probably didn’t have trillion-dollar coins in mind, but there’s no textual or other legal basis for importing this probable intention into the statute. What 535 people might have had in their collective “mind” just can’t control the meaning of a law this clear.

        Daily Kos an oasis of truth. Truth that leads to action.

        by Shockwave on Wed Jan 09, 2013 at 09:51:18 AM PST

        [ Parent ]

        •  A ludicrous construction. (0+ / 0-)

          Seignorage was approved so that like the private for-collectors coinage makers, the US mint could get the difference between the cost of the coin and its sale value.

          No sentient person - on any given day, Harvard law professors can be either in or out of that category, or both! - can truly believe (as opposed to "argue", for a law professor can "argue" anything) that Congress intended the Executive branch to be able to trump its debt ceiling authority with its coin minting legislation.

          Prof. Tribe is right in that it's not a loophole. It's a gimmick, a sham, an artifice ... and the creditors of the United States will unquestionably see it that way. Using the coin as an out will embarrass a President who's taught Constitutional law even if it doesn't trouble Laurence Tribe.

          Tribe's response might be, as the article went on to quote him: "... there’s no textual or other legal basis for importing this probable intention into the statute. What 535 people might have had in their collective “mind” just can’t control the meaning of a law this clear." That is an incredible construction of legislative history, blind to the way acts of Congress typically are construed in the courts.

          A direct confrontation of Congress, based on Constitutional grounds, is preferable to using a Monte game gimmick any day.

          2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

          by TRPChicago on Wed Jan 09, 2013 at 01:51:56 PM PST

          [ Parent ]

          •  Can you point me to a precedent (2+ / 0-)
            Recommended by:
            trevzb, mbguenth

            where the courts rejected the plain language of a statute in favor of the presumed intent of congress in writing it?  Since you say "That is an incredible construction of legislative history, blind to the way acts of Congress typically are construed in the courts." this should be easy for you.

            “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

            by jrooth on Wed Jan 09, 2013 at 01:57:27 PM PST

            [ Parent ]

            •  Yes. To construe a statute, you take (0+ / 0-)

              ... into consideration legislative history.

              You may ignore it, or construe your way out of it, but you consider it.

              2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

              by TRPChicago on Wed Jan 09, 2013 at 04:11:27 PM PST

              [ Parent ]

              •  Two things about that: (0+ / 0-)

                First, there are judges (like Antonin Scalia) who reject that practice.

                Second, I read a lot of opinions and I cannot recall seeing one where legislative history was used to over-rule the plain meaning of the statutory text.  In every case I can recall where legislative history was considered, it was used in order to resolve some ambiguity in the statutory text.

                That's why I asked you for some precedent where legislative history was used as you claim.  If that practice is as common as you say, it shouldn't be hard for you to find some.

                “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

                by jrooth on Thu Jan 10, 2013 at 06:30:13 AM PST

                [ Parent ]

                •  Let's get back on track. (0+ / 0-)

                  1. My initial comment referred to Prof. Tribe's view - that the seignorage statute was clear, so clear that we can't import any intent to it other than a reading that authorizes the President to mint a Giant Coin that would evade Congress's law imposing the debt ceiling.

                  [Take issue with my summary, if you like, but I believe that's what Larry Tribe's argument amounts to.]

                  I suggested that the legislative history would show Congress's intent to be quite different from Prof. Tribe's application of the text itself, and that it would be strange if a court construing an Act of Congress were to be "blind" and completely ignore legislative history.

                  2. I did not say courts "courts rejected the plain language of a statute in favor of the presumed intent of congress in writing it." That's what you said in challenging the use of legislative history. What I said was that courts usually don't ignore it. I would add that they particularly don't ignore it if it will run counter to the court's ultimate decision. Judges are, after all, supposed to deal with intellectual integrity, even some deference, to the acts of a co-equal branch.

                  Why, as a practical matter? Well, one party to that lawsuit will argue what Congress's intent was, and that party in this kind of case may indeed be Congress itself! A congress who will not want to see its relatively recent commemorative coin law trump a debt ceiling law that goes back to the early 1900's.

                  [Note: I believe the Constitution trumps Congress best. That's why I think the Magic Coin notion is a very weak reed and the 14th Amendment argument is better. Even better is the patent irresponsibility of Congress in third-guessing its own appropriations and authorization decisions as if spending were the President's fault and not theirs. I'd find the debt ceiling law - as applied - an unreasonable and unconstitutional use of Congressional power.]

                  3. The origin of the statutory provision at issue - I readily admit I am not a scholar on this subject; I am relying on the writings of others - is in proposals and laws dealing with commemorative coins, most recently the United States Mint Numismatic Coin Clarification Act of 2000. Does that history necessarily control? Ah, No. Is it relevant to construing the application of a statute, irrespective of the statutory language? Definitely Yes. Would a court taking on such a case likely reference the history - such as the committee reports and floor debates, if any? Of course, if for no other reason than to dispatch it as limiting the statute. So ...

                  ... to answer one of your questions, I have little doubt that J. Scalia would ignore legislative history. Given his penchant for scholarship and parsing, I think he'd revel in it, whichever way he might decide. (I think he'd cling to the legislative history, but that's just my view. I hate to think I'd agree with him!)

                  4. Now as for your broader question to me, inviting me to show you some precedent for the proposition that when courts construe statutes, they don't go "blind" about legislative history. I retired a dozen years ago after 35 years of practicing law, so I don't go fetch research except for pro bono causes.

                  So if you are genuinely interested in the uses of legislative history - beyond just challenging me - ask a First Year law student.

                  2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

                  by TRPChicago on Thu Jan 10, 2013 at 01:08:37 PM PST

                  [ Parent ]

                  •  So, in other words ... (0+ / 0-)

                    it's up to me to do the research to support your claims because you're too busy and important to bother.

                    Instead, I'll refer you to Caminetti v. United States, 242 U.S. 470 (1917):

                    When the language of a statute is plain and does not lead to absurd or impracticable results, there is no occasion or excuse for judicial construction; the language must then be accepted by the courts as the sole evidence of the ultimate legislative intent, and the courts have no function but to apply and enforce the statute accordingly.
                    And the language of 31 USC § 5112 (k) is quite plain:
                    The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
                    (all emphasis mine)

                    You may argue, I suppose, that minting a trillion dollar coin is absurd, but I'd counter that the absurd thing would be to abstain from a facially legal action to avert financial collapse.

                    “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

                    by jrooth on Thu Jan 10, 2013 at 03:15:04 PM PST

                    [ Parent ]

          •  The US Government (2+ / 0-)
            Recommended by:
            trevzb, Shockwave

            could pay its obligations in $1 coins, and not breach the Debt Ceiling - Seigniorage profits count as revenue to the Treasury - therefore government spending does not have to be funded by taxes alone. It can be funded by seigniorage profits.

            There is 82 cents of seigniorage profit in every one dollar coin. So theoretically, budgets 5 times tax revenues are feasible (not that I suggest going anywhere near that)

            With recycling of dollar coins, the costs drop much more. The Treasury could ask the Fed to return tax money in the form of dollar coins.

            The only drawback is the tediousness of it all. Which is why the platinum coin makes sense. But the trillion dollar coin is really no different than a trillion dollar coins!

          •  And when the Congress says "piss off" (0+ / 0-)

            well what are you going to do about the 14th Amendment?

            Atlas shrugged. Jesus wept.

            by trevzb on Wed Jan 09, 2013 at 02:48:24 PM PST

            [ Parent ]

            •  Let someone sue. SCOTUS should decide it. (1+ / 0-)
              Recommended by:
              Shockwave

              Let's take it to court. Meanwhile, get on with the people's business.

              2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

              by TRPChicago on Wed Jan 09, 2013 at 04:12:22 PM PST

              [ Parent ]

              •  Take it to court... (0+ / 0-)

                ...that's great, when you have more than a couple of weeks before the default.

                Atlas shrugged. Jesus wept.

                by trevzb on Thu Jan 10, 2013 at 07:48:55 AM PST

                [ Parent ]

                •  No, it would be after the fact, and either branch, (1+ / 0-)
                  Recommended by:
                  Shockwave

                  ... or someone else affected by the action, can do it.

                  I expect someone(s) will take this business to court no matter what course of action the President chooses.

                  We've got an incipient debacle on the debt ceiling because of the GOP's irresponsible untransigence no matter what.

                  The sky does not need to fall due to this ridiculous faux crises.

                  2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

                  by TRPChicago on Thu Jan 10, 2013 at 08:01:52 AM PST

                  [ Parent ]

    •  Good rule of thumb (2+ / 0-)
      Recommended by:
      Shockwave, trevzb

      If Paul Krugman is for something and Rush Limbaugh is against it, chances are, it's a really good idea.

    •  I don't know...Rush may be on to something (1+ / 0-)
      Recommended by:
      Shockwave

      Let's mint about 20 of them and pay off the national debt entirely!

      Sounds to me like taking back the authority over the creation of currency value into the hands of the people whose sweat, ingenuity and hard work SHOULD determine its value, rather than leaving it in the hands of those with a vested interest in the destruction of currency value (98 percent in 99 years) so they can buy the world for themselves for two cent on the dollar.

      Atlas shrugged. Jesus wept.

      by trevzb on Wed Jan 09, 2013 at 02:46:50 PM PST

      [ Parent ]

  •  The president should agree (8+ / 0-)

    to take the platinum coin solution off the table in return for Republicans agreeing to double the payroll tax income cap and close loopholes to the tune of a trillion dollars or so. It should be a one-to-one revenue enhancement with the size of the proposed coin. :P

    Heck, if Republicans can try to seem reasonable for agreeing not to trash the world economy in exchange for getting their way, we should be able to do the same with the trillion-dollar coin.

  •  It's a non-starter. Obama will neve go for it. (0+ / 0-)

    We're going to see some pretty big cuts to entitlements.

    Obama would be impeached if he did the coin thing, likely with some democrats voting for it.

    •  They're going to impeach him anyway. (4+ / 0-)
      Recommended by:
      katiec, Crabby Abbey, ferg, dogman70

      Not that it will matter.  

      And the coin goes back to the Treasury when the debt ceiling is raised/removed, so they can go pound sand.

      Happy little moron, Lucky little man.
      I wish I was a moron, MY GOD, Perhaps I am!
      —Spike Milligan

      by polecat on Wed Jan 09, 2013 at 10:59:33 AM PST

      [ Parent ]

    •  He should be impeached for not doing it. (1+ / 0-)
      Recommended by:
      dogman70

      But, what is really the case is he will be impeached in the House for not doing whatever the Republicans expect him to do when the debt limit is reached whether it is legal or not.

      The only legal option for the President upon encountering an inability to spend Congressional appropriations due to the debt limit is to create reserves from thin air.  The only means that Congress has provided to do that is minting a platinum coin.  If the platinum coin were not an option then we could start talking about the 14th amendment solutions.  Although, I would not use the 14th amendment to get the debt ceiling declared unconstitutional, I would overturn the requirement that the Treasury issue bonds or collect taxes prior to all spending unconstitutional.

      Basically, if the government can create money as the constitution says it can, then the debt limit plays a legitimate role in economic policy.  It just says the maximum amount of bonds Congress wants the public to have.  Spending in excess of that amount means that Congress wants that spending to create more reserves.

  •  There is another realistic choice (3+ / 0-)
    Recommended by:
    polecat, DRo, mightymouse

    The Debt Limit is only a relic from the Liberty Bonds that were issued to pay for World War 1. It does not apply the bonds currently being issued by our Treasury. The Administration should just point that fact out to the Republican'ts and then just ignore their ravings by continuing to pay the bills that Congress created.

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Wed Jan 09, 2013 at 10:15:42 AM PST

    •  Can you point out the relevant language (2+ / 0-)
      Recommended by:
      polecat, ferg

      in 31 USC Chapter 31, Subchapter I supporting your claim?

      I see no reference to Liberty Bonds there, but I do see:

      (b) The face amount of obligations issued under this chapter and the face amount of obligations whose principal and interest are guaranteed by the United States Government (except guaranteed obligations held by the Secretary of the Treasury) may not be more than $14,294,000,000,000, outstanding at one time, subject to changes periodically made in that amount as provided by law through the congressional budget process described in Rule XLIX  [1] of the Rules of the House of Representatives or as provided by section 3101A or otherwise.
      Whatever the original purpose of the statute, it appears that in the course of subsequent changes that purpose has broadened.

      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

      by jrooth on Wed Jan 09, 2013 at 10:46:47 AM PST

      [ Parent ]

      •  Is that in the tax code? (2+ / 0-)
        Recommended by:
        Mr MadAsHell, gecko

        We didn't have a Congressional controlled debt ceiling during WWII when our debt grew to at least a third higher percentage of GDP (127%) than today and when we had a Democratic controlled Congress. Of course, that debt was not a problem because the debt was purchased by the American people as war bonds which stimulated our domestic economy when they were cashed to buy houses, cars, appliances or anything else. More federal revenue was generated by the increase in economic activity than the interest being paid. Along with high top marginal tax rates to prevent war profiteering, the maturing war bonds retired the national debt in about a decade.

        Too bad Bush didn't read any history of WWII when he sold the debt from our multi-front war on terror to foreign governments and to transnational corporations. If he was not instead bound by Jule Wanniski's Two "Santa Clause Theory", he should have issued and marketed war bonds to the American people. When Bush cut taxes in 2003 it was the first time an Administration had ever done so during a time of war. It was also a huge mistake which led to uncontrolled profiteering.

        Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

        by RMForbes on Wed Jan 09, 2013 at 12:21:02 PM PST

        [ Parent ]

    •  Now you have to write a diary on that... (2+ / 0-)
      Recommended by:
      jrooth, Crabby Abbey

      references, etc.

      Would probably make the top of the rec list in a few seconds.

      Happy little moron, Lucky little man.
      I wish I was a moron, MY GOD, Perhaps I am!
      —Spike Milligan

      by polecat on Wed Jan 09, 2013 at 11:04:22 AM PST

      [ Parent ]

      •  I'm sorry I just don't have the time right now (0+ / 0-)

        Besides, I don't desire making the rec list. It just doesn't drive me. If you think it is that important why don't you do it?

        Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

        by RMForbes on Wed Jan 09, 2013 at 12:31:23 PM PST

        [ Parent ]

  •  The stupid thing about the whole debt ceiling (5+ / 0-)
    Recommended by:
    jrooth, polecat, ferg, pdx kirk, mightymouse

    issue is that the "extraordinary measures" we're having to take COST MONEY.  So basically we're increasing the national debt in a moronic supposed attempt to decrease the debt, which has no chance whatsoever to succeed.

    Republican threats amount to destroying the present if we don't allow them to destroy the future too. -MinistryOfTruth, 1/1/2013

    by sleipner on Wed Jan 09, 2013 at 10:53:48 AM PST

  •  Obama can HAVE it minted today. Deposit it if (8+ / 0-)

    and only if it is needed, but don't wait a millisecond past the deadline.

    Actually it would save the country interest charges from the extraordinary measures to deposit it NOW and not wait for the "February deadline."

    Just do it.  Don't wait.

    Happy little moron, Lucky little man.
    I wish I was a moron, MY GOD, Perhaps I am!
    —Spike Milligan

    by polecat on Wed Jan 09, 2013 at 10:58:15 AM PST

  •  auction it afterwards (2+ / 0-)
    Recommended by:
    DRo, pdx kirk

    If they do go the route of the platinum coin, I want them to once they are done with it stamp it 'not legal tender' and then auction it off with a reserve price of the value of the platinum.  It would be an awesome piece of history and would be a shame if they just melted it down.

  •  Is the platinum coin like Superman's key (0+ / 0-)

    to the entrance of the fortress of solitude, of which only he can lift?

  •  Obama would apparently much rather.... (2+ / 1-)
    Recommended by:
    bigtimecynic, trevzb
    Hidden by:
    ROGNM

    cut SS than mint a coin.

    I mean, does anyone seriously think he's going to order a trillion dollar coin to be minted when he can more easily give Republicans what they want and take the heat for it himself?

  •  Hurry up - mint it before (2+ / 0-)
    Recommended by:
    DRo, pdx kirk

    Congress gets back and passes Rep. Greg Walden (R-OR) law banning platinum coin making.

    I'm pretty tired of being told what I care about.

    by hulibow on Wed Jan 09, 2013 at 12:43:02 PM PST

  •  But cutting the Social Safety Net (1+ / 0-)
    Recommended by:
    Dave the Rave

    would be much preferable, wouldn't it? I'm sure the Great Dealmaker can find common ground with the rabid and lunatic enemies of the average person, and especially the Democratic voter.

    Think of the advantage: if we raise the qualifying age to 67 all those people who would end up dead would be a huge cut in expenditures, bringing the Republican Holy Grail of giving away money only to the rich and military suppliers almost without our grasp.

    Thus, by saving the Republican Party, as of course voters of all types will be less inclined to vote Democratic, we can save the two-party system, and thereby, Democracy itself!

    I joyfully await this, plus the prospect of shipping even more jobs overseas in the near future in the Trans-Pacific Partnership (aka "NAFTA on steroids") agreement being hammered out without Congressional oversight. (Oh, is it too early to mention that; is it still supposed to be hidden from the public?)

    How can you not love this guy?


    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Wed Jan 09, 2013 at 12:43:16 PM PST

  •  Platinum coin is as likely as the Public Option. (0+ / 0-)

    This ain't Harry Truman or FDR we're talking about here, folks.  

    Gentlemen, you can't fight in here! This is the War Room!

    by bigtimecynic on Wed Jan 09, 2013 at 12:44:08 PM PST

  •  Heist of the century; Steal the coin en route (2+ / 0-)
    Recommended by:
    raboof, mightymouse

    from the US Mint and to the Federal Reserve.  Something tells me that you might have a hard time actually spending it anywhere, though.

    Gentlemen, you can't fight in here! This is the War Room!

    by bigtimecynic on Wed Jan 09, 2013 at 12:48:31 PM PST

    •  But that would make a great comedy caper film. (2+ / 0-)
      Recommended by:
      mightymouse, bigtimecynic

      Some friends and I are having fun on Facebook today trying to cast it.

      We still haven't decided on who will be the Average Schmuck That Finds The Thing After The Treasury Loses It, though ...

      The thing about quotes on the internet is you cannot confirm their validity. ~Abraham Lincoln

      by raboof on Wed Jan 09, 2013 at 12:54:19 PM PST

      [ Parent ]

  •  If I deposit 3- one trillion dollar platinum (1+ / 0-)
    Recommended by:
    jrooth

    coins in a slot machine, and it comes up 7's, do I get to own the world?

    There is no hell on earth appropriate enough for those who would promote the killing of another person, in the name of a god.

    by HarryParatestis on Wed Jan 09, 2013 at 12:48:38 PM PST

  •  something I have always been curious about (1+ / 0-)
    Recommended by:
    pdx kirk

    I am new to this trillion dollar coin idea and I just have one question -- why does it have to be a coin? It can't be a bill?

    Civility, courtesy, kindness. The CK mantra.

    by rexymeteorite on Wed Jan 09, 2013 at 12:50:33 PM PST

    •  and why must it be round with someones face on it? (0+ / 0-)

      Why not a carved cylinder of dancing penguins? Or maybe a platinum magic wand?

      .....it's on the table, under the watermelon she demurred. Thanks, I was planning on shaving anyway he replied.

      by pdx kirk on Wed Jan 09, 2013 at 12:53:45 PM PST

      [ Parent ]

    •  "Commerative" coins can be minted. (0+ / 0-)

      ah. someone help me with this word...

      Notice: This Comment © 2013 ROGNM

      by ROGNM on Wed Jan 09, 2013 at 12:54:01 PM PST

      [ Parent ]

    •  I dont think so but (0+ / 0-)

      someone will come along and explain. It cant be gold or silver etc either. I forget. Ive pretty much ignored the topic myself, rexy, because I think its just about the most absurd thing I've ever heard. Is this any way to run a country??!?

      Get out there and get peace, think peace, live peace, and breathe peace, and you'll get it as soon as you like.” ~ John Lennon

      by Lady Libertine on Wed Jan 09, 2013 at 12:54:01 PM PST

      [ Parent ]

      •  I dunno, sounds ridiculous. (0+ / 0-)

        But if it works, I am not specifically opposed to the idea.

        I highly doubt its a practical solution to anything, though. Just because it might technically work, doesn't mean its realistic.

        Civility, courtesy, kindness. The CK mantra.

        by rexymeteorite on Wed Jan 09, 2013 at 12:56:20 PM PST

        [ Parent ]

    •  The Treasury is legally able ... (5+ / 0-)

      to mint platinum coins of any denomination.

      That isn't true of bills.

      It's due to a loophole in the 1997 Commemorative Coins Act.

      The thing about quotes on the internet is you cannot confirm their validity. ~Abraham Lincoln

      by raboof on Wed Jan 09, 2013 at 12:55:34 PM PST

      [ Parent ]

    •  The Treasury (1+ / 0-)
      Recommended by:
      rexymeteorite

      is limited to issuing no more than $350 million in US Notes. This comes from a Civil War era law that hasn't changed. US Notes are issued by the Treasury, while Federal Reserve Notes are issued by the Fed. Both are money.

      The Treasury is not constrained in the amount of coinage that can be issued. The US could pay all its obligations in $1 coins, and not breach the debt ceiling. US Mint seigniorage profits count as revenue to the Government (no different than Tax income) - A million one dollar coins cost the mint $0.18 to produce. When this coin is shipped to the fed, the Treasury account is credited by $1. Net revenue to the Government therefore is $0.82. This $0.82 can be used to fund spending, that would otherwise be considered deficit spending.

      However, paying by $1 coins is rather tedious and wasteful. It is in this context that the $1 Trillion coin makes sense.

  •  BUT IT MUST BE DONE BEFORE GEITHNER RESIGNS (4+ / 0-)
    Recommended by:
    pdx kirk, raboof, jrooth, gecko

    Otherwise there may be a period where the Senate filibusters the confirmation of a new Treasury Secretary in order to prevent the coin from being minted.

    Only the Secretary of the Treasury can mint the $1 Trillion coin, so if Geithner resigns and Lew hasn't been confirmed, then this approach is precluded.

    IT MUST BE DONE NOW!!!

    31 USC 5112

    (h) The coins issued under this title shall be legal tender as provided in section 5103 of this title.

    (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

  •  Selling federal land, etc. (0+ / 0-)

    Some articles suggest that the President should raise  funds if we reach the debt limit by selling federal land and federal property (which is probably exactly what the repugs want him to do.)  What about the President raising funds by selling advertisment space (think billboards) on, Congressional buildings, on printed money, or on other federal properties.  I know it is a bit crass and a bit horrid, but it is a means to make revenue.  I bet a company or a person would pay millions of dollars to have their name/face plastered on a bill (or better yet, on a billboard right next to Cantor's Office).

    "Art is a lie that makes you realize the truth." - Picasso

    by she the technocrat on Wed Jan 09, 2013 at 12:53:43 PM PST

    •  A "this space for rent sign" on the Capital Dome.. (0+ / 0-)

      ...and a set of Burma Shave style signs going up the steps could be hoot! Visual examples in our collective faces of just how silly its all become.

      .....it's on the table, under the watermelon she demurred. Thanks, I was planning on shaving anyway he replied.

      by pdx kirk on Wed Jan 09, 2013 at 12:59:13 PM PST

      [ Parent ]

      •  The President should unilaterally raise revenue (0+ / 0-)

        In all seriousness, he should be innovative and find ways to raise revenue by offering advertisement opportunities, sponsoship oppertunities for his interagural address, selling billboard space on federal land, etc... that is, if he is legally authorized to do so.

        "Art is a lie that makes you realize the truth." - Picasso

        by she the technocrat on Wed Jan 09, 2013 at 01:49:11 PM PST

        [ Parent ]

  •  The 14th Amendment is still the key here (0+ / 0-)

    The validity of the public debt of the United States shall not be questioned.

    •  The administration has explicitly rejected (0+ / 0-)

      that legal reasoning.

      I think they're mistaken, but it seems unlikely they'll reverse their thinking on that one.

      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

      by jrooth on Wed Jan 09, 2013 at 01:05:52 PM PST

      [ Parent ]

  •  Obama has to wait to the very last minute (1+ / 0-)
    Recommended by:
    indie17

    before he does the coin option. Otherwise he's giving Republicans an easy out of the bind they put themselves in. The best case scenerio for Republicans would be to tell their base, "We were going to cut spending (finally) but Obama used dictatorial powers to subvert us, now we have to impeach him".

     Obama is smart right now, signaling that he's not negotiating the debt limit and act like there is no alternative besides the house raising it.

  •  If this ever happens (1+ / 0-)
    Recommended by:
    Ian S

    I would pay money to see the Graham/McCain/Ayotte press conference of tears.

    I'm pretty tired of being told what I care about.

    by hulibow on Wed Jan 09, 2013 at 01:02:07 PM PST

  •  Forget $10^12 use $100s (0+ / 0-)

    Why do we need to mint a flashy and controversial $1 Trillion platinum coin?  Why not just use lots of normally printed $100 bills?  By removing the glitz of a trillion dollar denomination the story becomes as boring as all the money we continue to find ways to send to the banks eliminating the whole controversy behind the maneuver.

  •  "Given these facts" ... may not be facts. (1+ / 0-)
    Recommended by:
    emelyn
    Under the terms of the statutory debt ceiling, the president can't borrow extra money without congressional authorization.
    Amazing as it is to contemplate, not every act of Congress that purports to bind the President legally binds the President, particularly if it has to do with Executive Branch powers and Constitutional obligations.

    Mr. Yglesias acknowledges this in his article, but concludes:

    One possibility is that courts could hold that the Impoundment Act is unconstitutional. But it's important to understand the implications of this. You'd avoid the platinum coin only by vastly increasing presidential power, and granting the executive branch authority to undo acts of congress unilaterally.
    With due respect, Sec. 4 of the 14th Amendment does declare, in part:
    The validity of the public debt of the United States, authorized by law ... shall not be questioned.
    That is a Constitutional directive to all branches. While this language can be parsed (viz: what J. Scalia did to the Second Amendment in the DC gun case) and the context of the section is Reconstruction debts and recovery, it is no more slim a reed than seignorage authorized by Congress for a wholly different purpose than defying its will on the debt ceiling. It is unclear why Mr. Yglesias doesn't treat using seignorage to evade Congress as any less an expansion of executive power than ignoring a patently ridiculous and unconstitutional application of the debt ceiling.

    We are headed for a constitutional confrontation. Let's put the President's reaction to the Congressional GOP's obdurate and irresponsible behavior on the most solid ground. The Big Coin gimmick is shifting sand. The 14th Amendment trumps Congress without expanding Presidential power and more effectively than Congress's calling into question the debt of the United States for programs it authorized.

    2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

    by TRPChicago on Wed Jan 09, 2013 at 01:38:52 PM PST

    •  Does the coin really expand executive power? (1+ / 0-)
      Recommended by:
      trevzb

      The president can't actually do anything with that money without congressional approval.

      “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

      by jrooth on Wed Jan 09, 2013 at 01:53:49 PM PST

      [ Parent ]

      •  Huh? If he can't use it - what it represents - to (0+ / 0-)

        ... pay the debts of the United States that Congress authorized and then appropriated money for, what good would it do?

        2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

        by TRPChicago on Wed Jan 09, 2013 at 01:56:16 PM PST

        [ Parent ]

        •  The operative words are: (1+ / 0-)
          Recommended by:
          trevzb

          "that Congress authorized."

          That's all he can do with that money.  And it's no more executive power than you and I already believe (but President Obama does not believe) he has under Sec. 4 of the 14th Amendment.

          “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

          by jrooth on Wed Jan 09, 2013 at 02:01:06 PM PST

          [ Parent ]

          •  So you're saying Congress has approved, so he... (0+ / 0-)

            ... can pay. If that's so, why does he need the charade of the Giant Coin? Just pay the damn bills.

            To say the President has to do something (issue debt) that Congress will criticize in order to do something Congress required (spending), so he must mint a valuable coin (which Congress OKayed in an entirely different context), is to say the President has to go along with a charade.

            I'm saying the President is too principled a man to do that. Call a gimmick for what it is, and move on like an adult.

            2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

            by TRPChicago on Wed Jan 09, 2013 at 04:09:19 PM PST

            [ Parent ]

            •  Because congress also imposed (0+ / 0-)

              this idiotic borrowing limit.  If the president borrows over that limit, he's breaking the law.  The coin offers a legal (if rather silly) alternative.

              The Constitution requires that the president "shall take care that the laws be faithfully executed."  Given two alternative solutions to a crisis - one legal and the other illegal - he must choose the legal alternative.

              “What’s the use of having developed a science well enough to make predictions if, in the end, all we’re willing to do is stand around and wait for them to come true?” - Sherwood Rowland

              by jrooth on Thu Jan 10, 2013 at 06:38:07 AM PST

              [ Parent ]

              •  The President need not enforce an unconstitutional (0+ / 0-)

                ... law.  DOMA, for example. Congress frets and struts and will threaten impeachment, perhaps even carry on with it. But I expect the House GOP zealots and the leadership will do that no matter what work around the Obama administration takes - the Magic Coin, issuing scrip, ignoring Congress, whatever.  

                True, a president doesn't usually refuse to defend or abide by an Act of Congress, but he can. This isn't a "constitutional crises," it's a confrontation. Both branches seem to be spoiling for it and it will be a terrible and dangerous distraction.

                History, short them and long, will laud the adult in the room.

                2014 IS COMING. Build up the Senate. Win back the House : 17 seats. Plus!

                by TRPChicago on Thu Jan 10, 2013 at 07:55:37 AM PST

                [ Parent ]

  •  I'm NOT recommending it, but (0+ / 0-)

    would selling off government assets be another option?
    Disney and other companies would likely pay a pretty penny for Yellowstone National Park (gag, retch).

    Is this what the plutocrats have in mind?

    We're all pretty strange one way or another; some of us just hide it better. "Normal" is a dryer setting.

    by david78209 on Wed Jan 09, 2013 at 01:56:24 PM PST

    •  I reccall at least one (0+ / 0-)

      executive agency selling physical property on ebay during the last debt ceiling crisis in anticipation of  congress not reaching a resolution.

      This diary suggests that the platnum coin option is the only option to ensure that the president fulfill is legally requirement to spend, but he has other options, such as what you suggest selling government land.  Of course, I hope he would never do that, but there I wonder if he could try to get advertising revenue by selling billboard space on government land, ad space on government websites, etc.  [That is of course with the exception of PBS!]

      "Art is a lie that makes you realize the truth." - Picasso

      by she the technocrat on Wed Jan 09, 2013 at 02:04:28 PM PST

      [ Parent ]

  •  I'm not so sure this won't happen (0+ / 0-)

    Reason is that I think the Republicans are trying to corner the president into what they'd consider an impeachable offense, regardless of how he decides to handle their intransigence on the debt ceiling.

    As the poster noted, it's illegal for the president to spend less than Congress authorizes, it's illegal for the president to fail to meet America's debt obligations and it's probably impeachable for him to raise any sort of revenue unilaterally.

    He has one legal option if they force his hand, and that's the coin. That said, I hold no illusions that the Republicans would not also consider that an impeachable offense, regardless.

    It isn't difficult to think of this stuff, it's just that nobody else has ever been shitty enough to actually do it.

    Atlas shrugged. Jesus wept.

    by trevzb on Wed Jan 09, 2013 at 02:33:44 PM PST

  •  I don't like the coin option because ... (0+ / 0-)

    I do believe the platinum coin option is a viable option and would work. But I hate the thought of Obama using such a gimic, and it really is a gimic. We have to consider what would happen if the law about platinum coins did not exist, what would Obama be able to do then? That is the better solution.

    It is my understanding of the situation that the president has two conflicting orders from Congress. 1. do not borrow more than X dollars and 2. spend Y dollars, where Y is greater than X.

    In the face of two conflicting laws such as this, he should pick one and just do it. He was ordered to spend Y dollars, so he should continue to borrow enough money to spend Y dollars. It's not that the debt ceiling is unconstitutional, I think he should just ignore it.

    I like that option a lot better than trying something based on a law that it's just luck that it exists and was written poorly enough to have such a loophole.

    "Every Pootie is a masterpiece." - Da Vinci

    by mdsiamese on Wed Jan 09, 2013 at 03:01:22 PM PST

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