Mint the Trillion Dollar Platinum Coin?

Ezra Klein at The Washington Post is against it:

There are already cracks in the GOP’s coalition over whether holding the debt ceiling hostage is such a good idea, with Newt Gingrichthe Wall Street Journal and assorted columnists beginning to head to the exits. The closer we get to default, the more focused and unbearable the pressure from the business community is going to become. As Gingrich put it, “The whole national financial system is going to come in to Washington and on television, and say: ‘Oh my God, this will be a gigantic heart attack, the entire economy of the world will collapse. You guys will be held responsible.’ And [Republicans will] cave.”

Minting the coin would interrupt that process, uniting Republicans — and many voters and business groups — against what they would see as an unsettling, illegal and inflationary power grab from the executive. And if you think the press spreads blame too equally over the debt ceiling, wait till you see the coverage if the White House decides to respond by creating a trillion-dollar coin out of nothing. You can explain the basic logic of fiat currency until you’re blue in the face, but it’s not going to matter. That coin would drive our country’s increasingly deranged politics, which are really at the heart of this crisis, to the edge.

But Klein doesn’t think the platinum coin idea is bad as an absolutely last resort:

In the event that we actually breach the debt ceiling and Republicans don’t fold almost instantly, the situation changes. Again, I think this fairly unlikely. But if financial markets are roiling and the country is crying out for a resolution that Republicans, in a fit of political and moral insanity, won’t provide, then many of the drawbacks to minting the coin or invoking the 14th Amendment dissipate. At that point, such a move may seem entirely reasonable: It could bring relief to the public and the markets, and Republicans would properly take the blame — and the consequences — for having nearly destroyed the global economy.

My guess is that this is exactly how President Obama will play this. Let the Republicans walk the plank. Let them look down and jump off if they choose. Then issue the coin once they’re in the water.

Checkmate for Obama. Again. But none of this will happen. As Charles Krauthammer (also at The Washington Post) rightly observes:

The [Republican] party establishment is coming around to the view that if you try to govern from one house — e.g., force spending cuts with cliffhanging brinkmanship — you lose. You not only don’t get the cuts. You get the blame for rattled markets and economic uncertainty. You get humiliated by having to cave in the end.

About Santi Tafarella

I teach writing and literature at Antelope Valley College in California.
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