Thursday, January 3, 2013

Going Platinum Again

I'm very happy to see both Yglesias and Krugman discussing the platinum coin option, which would allow President Obama to deal with the debt ceiling without making unnecessary concessions to Boehner and the House Republicans.

If you missed it last time around, the short story is that there's a law allowing the Treasury Secretary to mint platinum coins of arbitrary denominations. Nobody thought of using it to generate trillions of dollars of new money when they passed it -- it was simply supposed to be for commemorative coins. But it gives Obama (through Geithner) the power to order the minting of a trillion-dollar coin. Deposit it at the Federal Reserve, and you're a trillion dollars further below the debt ceiling. Frankly, I'm curious to see if we could take advantage of the current economic environment with its deflationary pressures to mint a few trillion dollars worth of coins and take a big bite out of the national debt, blowing the minds of Pete Peterson and the Fix the Debt people.
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