The campaign to get around the debt ceiling by using a Trillion Dollar Platinum Coin has reached a new level of intensity today.
Earlier today, Paul Krugman hopped on board and said Obama must be ready to mint the coin if the GOP decides to try to force the country into defaulting on its obligations.
To take a step back, the US is about to hit the debt ceiling limit that Congress set in 2011, at which point it will be illegal for the country to issue more debt to pay its bills–unless the Congress agrees to hike the ceiling again.
In the past, hiking the debt ceiling was pretty painless, but some in the GOP are staunchly opposed to doing it, raising the specter that the US will default on its obligations.
It’s because of this that some people are getting more excited about the “Platinum Option,” which refers to a technical loophole in the law that allows the Treasury to create platinum coins in any denomination, theoretically up to a trillion and beyond.
The “Platinum Option” would allow the Treasury to temporarily print money to pay the country’s bills, thus getting around the debt ceiling.
For obvious reasons, the GOP doesn’t like this. And now Congressman Greg Walden of Oregon has introduced a law to prevent the Treasury from creating a platinum coin to pay the debt.
We’ve posted his full press release below, but the key thing here is that the idea is now legitimized, as a GOP Congressman implicitly acknowledges that the coin idea is currently legal.
Note that in his press release, the Congressman uses the flawed analogy of comparing the US government to a small business. Unlike governments, small businesses can’t print money. And small businesses can’t “deficit spend,” the way governments can.
Greg Walden plans to introduce bill to stop U.S. Treasury from creating trillion dollar platinum coins to pay bills and expand debt
THE DALLES, Ore. – U.S. Rep. Greg Walden (R-Ore.) today announced plans to introduce a bill to stop a proposal to mint high-value platinum coins to pay the federal government’s bills.
“Some people are in denial about the need to reduce spending and balance the budget. This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks,” Rep. Walden said.
“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well. My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order,” Rep. Walden said.
Within the last week, numerous media reports (example here) have suggested that the U.S. Mint could create trillion dollar platinum coins, which would then be deposited into the Federal Reserve to be used to pay the federal government’s bills or avoid hitting the debt ceiling. Rep. Jerrold Nadler, the ranking member of the Judiciary Committee’s Subcommittee on the Constitution, touted the proposal last week (story here). New York Times columnist and Princeton professor Paul Krugman suggested the idea in an article as well (click here). Other leaders in Washington, including House Minority Leader Nancy Pelosi, have urged the President to raise the debt limit unilaterally without permission from Congress.
Representative Walden, a member of the House Republican leadership, represents the Second District of Oregon, which includes 20 counties in the southern, central and eastern regions of the state.
And find out everything you need to know about the #MintTheCoin movement below:
SEE ALSO: Paul Krugman endorses #MintTheCoin >
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