Platinum Solution

You’ve all heard about it. And yes, it’s true. It is not a joke.

The Treasury Department is fully authorized to mint platinum coins. And yes it could do so to avoid any fracas over the debt ceiling. All it has to do is mint a coin or coins and then deposit them at the Federal Reserve Board. It could then keep on writing checks for things that it has been asked to do – like payments to veterans, retirees, and so on.

The legality stems from something called the “Denominations, Specification, and Design of Coins” act. This obscure piece of legislation was put in place to allow the Treasury to make a few bucks selling coins to collectors, but there’s nothing in it to prevent the Treasury from minting platinum coins for whatever purpose it chooses. Indeed, the law goes out of its way to give the Treasury total leeway in deciding what, how, and when to mint such coins.

Here’s the relevant subsection of the law:

“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.”

Notice the language: “in the Secretary’s discretion”. There’s no attempt to put limits. It’s a free pass. Apparently it’s an iron clad free pass to boot.

Yes it sounds like a cheat. But that’s only if you ignore the bigger cheat that is precipitating the possibility of platinum coinage. That bigger cheat is the Republican extremist decision to hold the economy to ransom in order to get its way over government spending.

The correct way to debate government spending is by doing exactly that: debating. Arguing. Discussing. Trying to arrive at some common ground. It ought to be a clash of ideas. It ought to be amenable to voter approval. Like in an election. Perhaps a presidential election. Kind of like the one we just had a month ago. The one where the Republicans lost.

So its cheating to try to get through the backdoor what you cannot get going through the front.

Holding the nation up, and threatening to shut down government is cheating when the voters have already spoken. We know what the country wants. The exit polls were very specific, and the entire election campaign was filled with references to economic policy. People are far more worried about jobs and growth than they are about debt. They are right.

We have no debt crisis. We have a jobs and growth crisis.

The platinum solution short circuits the extremists attempt to derail democracy and forces them to engage in proper political discourse rather than ransom style hold-ups.

Oh, and it’s not inflationary to mint a trillion dollar coin. The Fed is knee deep in investments from its various QE dealings. It could simply start selling those off to mop up cash from the economy and thus neutralize any potential inflation. Not that inflation is a threat, but that’s another story.

So there you have it.

Mint the damn coin. Move on with life. It will make the extremists seethe with rage. But that just adds to the fun.