I was surprised at how vehemently some people insisted that the platinum coin solution was “silly” in yesterday’s thread about the subject. First, what Ryan Cooper said, responding to Heidi Moore at the Guardian:
From my seat the platinum option looks like a plainly legal and reasonable option. I’m no lawyer, of course, and I’d listen to counterarguments. But what really chafes my strap is the snidely dismissive tone of Moore and company. They are abusing the sphere of deviance, in a way which reminds me very strongly of how journalists treated marijuana legalization a decade ago.
It’s striking especially that Moore doesn’t treat the people threatening to hold the US economy hostage to extract unrelated policy concessions with the same disdain she shows for the people trying to cook up a workaround. I agree, minting trillion dollar coins sounds silly. But hitting the debt ceiling would be deadly serious, and doing silly-sounding things is a small price to pay for avoiding pointless economic crisis.
Cooper also quotes Paul Krugman, who explains why the coin wouldn’t be economically damaging (which was another point raised in that thread).
I’m not wedded to the notion of a platinum coin, but I am wedded to the need for a way to get the debt ceiling off the table as a negotiating tactic. As a couple people pointed out in yesterday’s thread, Congress could fix the platinum coin loophole quite easily, by passing a bill that clarified the law. The whole point of this entire mess is that they won’t. If such a law came to the House floor, it would pass, but then the Senate Democrats would tack on amendments that the House wouldn’t be able to tolerate, because a good number of them can’t vote for anything that is not ideologically perfect.
When you take compromise away in a closely divided legislative body, you are left with nothing. So, inevitably, the power of the Presidency is going to continue to expand so government can continue to function. Maybe it will be a platinum coin, maybe it will be some other kind of marginal, technical move by the Treasury, but in the end I think the White House is going to try to circumvent the debt ceiling. It’s not Obama’s nature, he won’t be comfortable with it, it will be last-minute and ugly, and there will be much sound and fury. Predictions are hard, especially about the future, but that’s where I see this going.