We talked last week about efforts to resolve the latest debt-ceiling crisis with a fanciful gimmick: the White House can exploit an obscure law, order the Treasury to mint some $1 trillion platinum coins, and deposit them at the Federal Reserve. Voila, a silly solution to a silly problem with not-at-all silly consequences.
As the platinum-coin loophole continues to generate chatter on the left -- Paul Krugman lent it some credence yesterday -- a Republican congressman is concerned enough about this that he's seeking a legislative remedy to close the loophole (via Matthew O'Brien).
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. [...]"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 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."
Of course, Walden's proposal comes with an unintended subtext. As Joe Weisenthal explained, "[T]he key thing here is that the idea is now legitimized, as a GOP congressman implicitly acknowledges that the coin is currently legal."
In other words, if there was no loophole, there'd be no reason to close it.
That said, I'm still skeptical about making the transition from "fun little polisci thought experiment" to "something the administration needs to seriously consider in the next few weeks."
Josh Barro has become one of the leading proponents of the idea, and yesterday, he responded to the most common concerns raised by detractors. He makes a fairly compelling case.
But I find myself imagining the remarks President Obama would have to deliver from the White House next month:
Dear International Investors and Global Financial System,Some of you may be worried about the United States and our willingness to pay our bills. I'm afraid some of the reports you've seen are true: much of our legislative branch of government has been overcome with madness, and there's not much I can do about that.But there's no cause for alarm. I've decided to exploit an obscure, untested, legally-dubious loophole that will allow me to protect the full faith and credit of the nation, even though Congress won't like it, with a gimmick that everyone agrees is transparently silly.Regardless, if it's all the same to you, I'd really appreciate it if you continued to look at the United States as a stable, global superpower, which deserves to be taken seriously, and which is totally worthy of your investment. In fact, if you're willing to overlook the inconvenient fact that our House of Representatives is stark raving mad, you'll see that there's no reason to stop loaning us money.Have a nice day and please stop laughing at us.
I've seen many point out that ridiculous crises sometimes require ridiculous solutions, and I'm not unsympathetic to the point. On the contrary, I don't blame the left for coming up with off-the-wall remedies to the problem; I blame congressional Republicans for creating the problem and threatening to hurt the country on purpose unless they get their way.
Indeed, ideally, I'd like to see Democrats offer folks like Greg Walden a deal: Dems will agree to close the platinum-coin loophole if the GOP agrees to close the debt-ceiling loophole, transferring authority for raising the debt limit from Congress to the White House.
It's the kind of "grand bargain" that would do the nation a lot of good.