Photo: LexnGer via flickr
Minting a trillion dollar platinum coin to work around the debt ceiling is…… legal
But the complaint from so many people is: It’s just not serious! It’s the work of impish trolls!
That people think it’s silly has prevented many people from endorsing it.
But it seems that they recognise that a Plan B needs to be developed, and now they’ve glommed onto one: Printing IOUs to pay the bills.
The new campaign (which might be characterised as #PrintTheIOU) is the brainchild of Edward Kleinbard, who made his case in a NYT op-ed that came out last night.
However, there is a plausible course of action, one that the president should publicly adopt in the coming weeks as his contingency plan should debt-ceiling negotiations falter. He should threaten to issue scrip — “registered warrants” — to existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.’s could include federal employees, defence contractors, Medicare service providers, Social Security recipients and others.
The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay. The president could therefore establish a scrip program by executive order without piling a constitutional crisis on top of a fiscal one.
He’s followed that up with a conference call this morning, in which he called the Platinum Coin an “embarrassment.”
So here we are. The Serious People have found their Serious Alternative to the platinum coin.
The influential magazine National Journal — which likened the Platinum Coin option to FDR illegitimately packing the Supreme Court — has a writeup of the IOU idea, which specifically frames it as a non-loopy alternative to the coin.
Yes, and President Obama should publicly adopt the idea, Edward Kleinbard, a University of Southern California law professor and former chief of staff to Congress’s Joint Committee on Taxation, argues in a Thursday New York Times op-ed. If lawmakers can’t reach an agreement before the nation hits its debt ceiling–which could happen as soon as next month–then Obama should have a backup plan of issuing IOU’s in place, Kleinbard argues.
Other folks who were coin sceptics are also on board.
Exited to start pushing my #printthescrip hash tag but afraid it might be too workable to attract attention
— Tim Fernholz (@TimFernholz) January 10, 2013
The debate over the IOU or “Scrip” idea will continue, but here are the two big takeaways.
— This is Plan B proposal that respectable people are comfortable with.
— We’ve reached a new stage, where a lot of the discussion is not about if the debt ceiling will be raised, but how Obama will circumvent it if/when its not raised. Arguably that itself represents a loss of GOP leverage.
Find out everything you need to know about the trillion dollar coin below:
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