azulmagia
(?)Community Member
- Posted: Wed, 09 Jan 2013 01:07:07 +0000
And yes, I do expect you to read that in a Dr. Evil voice.
Anyway, we're coming soon to another of those debt ceiling negotiations hostage taking incidents. There's a surprising and cunning option available to Obama to sidestep the entire morass and perform the exact same thing without needing to deal with a bunch of gerrymandered-districted blackmailers. That is, to have the Treasury mint a special non-circulating TRILLION DOLLAR platinum coin and deposit it at the Fed.
There are a number of arguments against this procedure, but I'll wait till they're actually raised before discussing them. Meanwhile, Adam Kotsko raises a point often overlooked in their entire debt ceiling controversy:
So, let's get back to the matter of the $1,000,000,000,000 platinum coin. Specifically, I would like to hear what our economically-minded posters have to think about it, because, the unorthodoxy of the proposed solution is somewhat...distracting, so it's hard to be objective about it.
Anyway, we're coming soon to another of those debt ceiling negotiations hostage taking incidents. There's a surprising and cunning option available to Obama to sidestep the entire morass and perform the exact same thing without needing to deal with a bunch of gerrymandered-districted blackmailers. That is, to have the Treasury mint a special non-circulating TRILLION DOLLAR platinum coin and deposit it at the Fed.
There are a number of arguments against this procedure, but I'll wait till they're actually raised before discussing them. Meanwhile, Adam Kotsko raises a point often overlooked in their entire debt ceiling controversy:
Quote:
In all the discussion of the debt ceiling, I think a really simple point is often lost — namely, that if the debt ceiling is not high enough to account for the debt required to spend all the money Congress has legally obligated the executive branch to spend, there is a contradiction in the law. What the president is doing when he requests an increase (or, in a different way, what the Treasury secretary is doing when he takes “extraordinary measures” to put off exceeding the debt ceiling) is politely asking Congress to resolve the contradiction in a face-saving way. If Congress doesn’t do that, then we are in a self-induced state of exception where the law does not provide guidance — and we all know who makes the decision about how to handle the state of exception!
Now our intrepid sovereign could choose to resolve the contradiction by claiming that the appropriations laws override the debt ceiling — i.e., that Congress implicitly already raised the debt ceiling by requiring the Treasury to spend a certain amount of money beyond what it is allowing the Treasury to take in as taxes. There is no need for an obscure constitutional provision to justify this decision. It’s elegant and straightforward in itself, and it has the benefit of privileging the laws that Congress most recently passed.
If Obama were really concerned to let Congress save face and treat both of these contradictory laws as equally important, there is the (stupid) platinum coin option that has gotten so much play in recent weeks. The solution here would be to say that Congress is requiring us to spend X amount of money but has only allowed us to borrow X-Y amount, and so we solve the problem by printing $Y. This is a solution that I assume a lot of people would have trouble accepting, but it does have a certain rabbinical quality to it that I find attractive.
The very worst decision to make here is to insist that the debt ceiling takes priority over the appropriations laws. As far as I can tell, in the past presidents have pretended they were constrained to favor this option in order to pressure Congress to resolve the contradiction themselves rather than subject everyone to the unedifying spectacle of the executive resolving it for them. This is a nice token gesture toward the separation of powers that I’m sure we all appreciate! But the only reason a president would allow it to be more than a token gesture — the only reason he would seriously cut off spending in order to comply with the earlier debt ceiling law instead of the more recent appropriations laws — would be if he wanted to be “forced” into cutting spending.
I’m not telling anyone anything they don’t already know — it’s pretty much conventional wisdom in the left blogosphere that Obama was just as eager as the Republicans to use the debt ceiling crisis for a misguided “grand bargain.”
Now our intrepid sovereign could choose to resolve the contradiction by claiming that the appropriations laws override the debt ceiling — i.e., that Congress implicitly already raised the debt ceiling by requiring the Treasury to spend a certain amount of money beyond what it is allowing the Treasury to take in as taxes. There is no need for an obscure constitutional provision to justify this decision. It’s elegant and straightforward in itself, and it has the benefit of privileging the laws that Congress most recently passed.
If Obama were really concerned to let Congress save face and treat both of these contradictory laws as equally important, there is the (stupid) platinum coin option that has gotten so much play in recent weeks. The solution here would be to say that Congress is requiring us to spend X amount of money but has only allowed us to borrow X-Y amount, and so we solve the problem by printing $Y. This is a solution that I assume a lot of people would have trouble accepting, but it does have a certain rabbinical quality to it that I find attractive.
The very worst decision to make here is to insist that the debt ceiling takes priority over the appropriations laws. As far as I can tell, in the past presidents have pretended they were constrained to favor this option in order to pressure Congress to resolve the contradiction themselves rather than subject everyone to the unedifying spectacle of the executive resolving it for them. This is a nice token gesture toward the separation of powers that I’m sure we all appreciate! But the only reason a president would allow it to be more than a token gesture — the only reason he would seriously cut off spending in order to comply with the earlier debt ceiling law instead of the more recent appropriations laws — would be if he wanted to be “forced” into cutting spending.
I’m not telling anyone anything they don’t already know — it’s pretty much conventional wisdom in the left blogosphere that Obama was just as eager as the Republicans to use the debt ceiling crisis for a misguided “grand bargain.”
So, let's get back to the matter of the $1,000,000,000,000 platinum coin. Specifically, I would like to hear what our economically-minded posters have to think about it, because, the unorthodoxy of the proposed solution is somewhat...distracting, so it's hard to be objective about it.