1 Trillion Dollar Platinum Coin option or not?

Don’t like the platinum coin option? Here’s a functionally equivalent alternative: have the Treasury sell pieces of paper labeled “moral obligation coupons”, which declare the intention of the government to redeem these coupons at face value in one year. It should be clearly stated on the coupons that the government has no, repeat no, legal obligation to pay anything at all; you see, they’re not debt, and therefore don’t count against the debt limit.

But that shouldn’t keep them from having substantial market value. Consider, for example, the fact that the government has no legal responsibility for guaranteeing the debt of Fannie and Freddie; nonetheless, it is widely believed that there is an implicit guarantee (because there is!), and this is very much reflected in the price of that debt.

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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. And Republicans are openly threatening to use that potential for catastrophe to blackmail the president into implementing policies they can’t pass through normal constitutional processes. 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? It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years.

Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin. So if the 14th amendment solution — simply declaring that the debt ceiling is unconstitutional — isn’t workable, go with the coin. This still leaves the question of whose face goes on the coin — but that’s easy: John Boehner. Because without him and his colleagues, this wouldn’t be necessary.

1. 1. Krugman joins the $1 trillion coin brigade

      MarketWatch (blog)‎ - 4 hours ago
   2. Funny Money: Pundits float $1 trillion coin as answer to debt-ceiling standoff

      Fox News‎ - 3 hours ago
2. $1 Trillion Platinum Coin: Not as “Silly” as Debt Ceiling Fight | Daily ...

   finance.yahoo.com/.../1-trillion-platinum-coin-debate-o... - United States

   2 hours ago – From the blog Daily Ticker: A week ago the U.S. officially reached its $16.4 trillion debt ceiling, meaning the government can't issue new debt.
3. Krugman joins the $1 trillion coin brigade - Political Watch ...

   blogs.marketwatch.com/.../krugman-joins-the-1-trillion-coin-brigade/

   4 hours ago – Paul Krugman, the liberal economist who pens a widely read column for The New York Times, on Monday joined the calls for the U.S. to mint a ...
4. Funny Money: Pundits float $1 trillion coin as answer to debt-ceiling ...

   www.foxnews.com/.../funny-money-pundits-float-1-trillion-coin-as-a...

   2 hours ago – Is a trillion-dollar coin the solution to the next fight over the debt ceiling?
5. Could a $1 trillion coin fix the national debt?- MSN Money

   money.msn.com/now/post.aspx?post=94f60738... - United States

   5 hours ago – There's been talk of minting a massive coin of platinum to help solve the nation's debt ceiling problem. It's a fun idea that has lots of problems.
6. Be Ready To Mint That Coin - NYTimes.com

   krugman.blogs.nytimes.com/.../be-ready-to-mint-that-coin/

   by Paul Krugman - in 851 Google+ circles 5 hours ago – Should President Obama be willing to print a $1 trillionplatinum coin if Republicans try to force America into default? Yes, absolutely. He will ...

Promises can be hard to keep, especially when there’s more than a million dollars at stake.

Promises can be hard to keep, especially when there’s more than a million dollars at stake.

When rapper and R&B singer Ryan Leslie’s backpack was stolen in Cologne, Germany in 2010, he lost his laptop, an external hard drive, jewelry, and cash. So he did what any rational person would do: he offered a cushy $20,000 reward for the return of the bag and its contents, which he announced in a YouTube video. When no one came forward, he upped the reward to $1 million. An auto-repair mechanic turned the computer in a month later, saying he found it tucked in a garbage bag in a German forest, and expected to collect his cool million. But Leslie refused to pay the reward on the grounds that the valuable computer files had been corrupted. Now a court has weighed in saying that the Grammy-nominated musician must live up to his promise and pay the reward, plus interest.

In court yesterday, according to the New York Post, Leslie testified that his offered reward was “contingent upon his ability to retrieve several unreleased multitrack songs stored on the hard drive, which he said couldn’t be accessed after he got it back.” His lawyer, David Stefano explained Leslie’s position to ABC News, “He made a second reward video and offered $1 million for just the intellectual property on the external hard drive and computer, the session files.” DeStefano added that the session files were the main item the performer hoped to recover with his reward, “MP3s are nothing for a producer or a studio engineer, they can’t do anything with them. They need the session files. These were his compositions.”

In November, a jury unanimously agreed that despite the fact that Leslie was unable to access the session files on the laptop, he still owed the substantial reward money to Armin Augstein, the German auto-shop owner who found the bag while walking his dog. On Friday, the court once again sided with Augstein and ordered Leslie to pay an additional $180,000 in interest that accrued between when the laptop was found, in 2010, and when the decision came down from federal court in 2012.

Read more: http://newsfeed.time.com/2013/01/05/rapper-ryan-leslie-ordered-to-pay-1-2-million-reward-for-lost-laptop/#ixzz2HCs2zquR

White House Petition Pushes For Trillion-Dollar Platinum Coin:Huffington Post

Thanks to a quirky law, the government can mint a platinum coin worth any amount. It then can deposit it at the Federal Reserve to pay off $1 trillion in debt, which would swing the government far below its debt limit. There are questions aboutwhether this really would be legal or constitutional though.

There's a push to have the president create a special weapon to avert another debt ceiling crisis. That special weapon is a trillion-dollar platinum coin, and it's a proposition the Obama administration may be forced to soon consider.

The movement is gaining steam, and the latest indication is a new White House petition calling for the measure. Created on Thursday, the petition already has gained 2,067 signatures as of 1:17 p.m. Friday. Any petition that garners 25,000 signaturesrequires a White House response. From the petition:

With the creation and Treasury deposit of a new platinum coin with a value of $1 trillion US Dollars, we would avert the absurd-yet-imminent debt ceiling faceoff in Congress in two quick and simple steps! While this may seem like an unnecessarily extreme measure, it is no more absurd than playing political football with the US -- and global -- economy at stake.

Thanks to a quirky law, the government can mint a platinum coin worth any amount. It then can deposit it at the Federal Reserve to pay off $1 trillion in debt, which would swing the government far below its debt limit. There are questions aboutwhether this really would be legal or constitutional though.

Supporters argue this is the only way Obama can avoid cutting Social Security and other social insurance programs. Congressional Republicans, including Senate Minority Leader Mitch McConnell, have demanded spending cuts in exchange for raising the debt ceiling, which the government technically has hit already. The Treasury Department now is taking special measures to prevent default, measures that can last only until around February.

Not raising the debt limit would have catastrophic consequences. It would force the U.S. government to default on its debt by preventing it from borrowing to pay its existing bills. It could even cause a financial crisis, market crash and recession, since so many investments hinge on the bet that the U.S. is unlikely to default.

But the coin idea is problematic to some, who warn that it could be a slippery slope toward hyperinflation, since the government would have created new money specifically to finance borrowing.

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