Greg Walden
AP
Rep. Greg Walden
Earlier today, Congressman Greg Walden (R-OR) announced plans to introduce legislation to ban the Treasury from minting high-value platinum coins and using said coins to get around the debt ceiling.
He says he does think that under current law such coins would allow the Treasury to circumvent the debt ceiling, but that he "couldn't believe" it is gaining traction as a serious proposal.
"I'm not a lawyer, so let me start with that. But the gentleman who is promoting it is the top Democrat on the Judiciary Subcommittee on the Constitution," the Congressman told Business Insider in an interview, referring to the idea that has been floated most prominently by Rep. Jerry Nadler.
"I assume that he has studied the legal ability to do this. But clearly if he chairs the Constitution Subcommittee, he's done his research. He's a smart man. And so therefore, I'm taking it at face value that the authority is there to allow the minting of a trillion-dollar coin, and that shouldn't be allowed."
The idea of minting a trillion-dollar coin has picked up as an option that would allow the Treasury to temporarily print money to pay the country's bills and work around the debt ceiling. It has turned into a Twitter campaign (#MintTheCoin), and supporters have created a petition urging the White House to mint it.
Walden took interest in proposing legislation to ban the option because he thought the idea of minting a platinum coin to work around the debt ceiling was a particularly absurd idea that exemplified "the problem of people in Washington not understanding the reality" of the national debt. Walden also thought that if the Treasury did mint the coin, it would lead to a "very inflationary" period. 
"The notion that we could mint a trillion-dollar coin ... and all of a sudden, your debt issue is gone — it's so absurd and laughable, except people were being serious," Walden said. "This just has to stop. So that's why we're drafting legislation today."
What Walden is suggesting is not quite the issue — Nadler and others in the media have proposed issuing the coin to continue paying the nation's bills in the case that the debt ceiling is not raised. It is not being floated as an option to rid the U.S. of its debt. There's also some debate over whether it would lead to a period of massive hyperinflation.
Walden didn't get too specific when asked what he would demand from President Barack Obama and other Democrats in order to lift the debt ceiling. But he did say he subscribed to the so-called "Boehner rule" that demands one dollar in spending cuts for every dollar increase in the debt ceiling.
One exchange he said he would not accept: banning the trillion-dollar coin in exchange for a permanent elimination of the debt ceiling so that it would be automatically raised.
"It used to be done automatically without a vote, and that's part of why we have the debt level that we have — Congress could just spend and never be held accountable," Walden said. "Now, we're making Congress and the administration take notice of what their spending habits have done to the country, and that's a good thing in terms of turning this thing around."

And US gimmicks - why we will be Greece / Spain sooner than one might think .....

http://globaleconomicanalysis.blogspot.com/2013/01/krugman-supports-1-trillion-coin-why.html


Monday, January 07, 2013 11:15 PM


Krugman Supports the $1 Trillion Coin; Why Stop There? I Support the $1 Quadrillion Coin


There is a lot of crazy talk out there regarding the minting of a $1 trillion coin to get around the debt ceiling.

Today Paul Krugman hopped on the $1 trillion bandwagon in his New York Times article Be Ready To Mint That Coin
 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.

For those new to this, here’s the story. First of all, we have the weird and destructive institution of the debt ceiling; this lets Congress approve tax and spending bills that imply a large budget deficit — tax and spending bills the president is legally required to implement — and then lets Congress refuse to grant the president authority to borrow, preventing him from carrying out his legal duties and provoking a possibly catastrophic default. 

Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.

So why not?
$1 Trillion Not Enough

Krugman asks "why not?" The answer should be obvious. It's crazy to think $1 trillion would be enough. A year or two from now, the Treasury would have to mint another coin, with the same silly debate we are having right now about whether the process is legal.


Question of Legality

I do not accept the idea that the proposed process would be legal. Others side with me as well. Here are a few examples:


Nonetheless Tut! Tut! I say to Krugman detractors.

Does any president care what is legal? Roosevelt didn't. Nixon didn't. Bush didn't. Obama didn't.

We all know presidents are above the law and they do what they want anyway. Kidnapping, torture, wiretapping, holding people without charges in Cuba, data gathering of all sorts with drones and other measures without due cause and in direct violation of the constitution, so clearly the constitution is meaningless already.

No one will possibly do anything if Obama breaks the law as Krugman wants. Krugman's major error is $1 trillion is nowhere near enough.

Let me be first to support the idea of a $1 quadrillion coin.

Krugman's second error is in regards to whose picture should be on the coin. I propose this picture for the front of the coin.





The back of the coin should be equally obvious.
Paul Krugman Prays for America.




Mike "Mish" Shedlock