by NW Spotlight
Wow. The fiscal cliff fight is over, but now a debt ceiling fight is looming and it’s getting pretty surreal. Oregon U.S. Rep. Greg Walden is having to introduce a bill to prevent the U.S. Treasury from making $1 trillion platinum coins – a strange gimmick some are recommending to President Obama to avoid hitting the debt ceiling.
Responding to the gimmick, Rep. Walden said “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.”
A writer at Bloomberg New and advocate of the gimmick explains “the Treasury Department is not allowed to just print money if it feels like it. It must defer to the Federal Reserve’s control of the money supply. But there is an exception: Platinum coins may be struck with whatever specifications the Treasury secretary sees fit, including denomination. This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government’s bills, in lieu of issuing debt.”
Rep. Jerry Nadler (D-NY) is a supporter of the $1 trillion platinum coin gimmick – an indication of how Democrats view $1 trillion as just pocket change – and part of how we got to $16.4 trillion in debt.
UPDATE (1/12/2013): Treasury rules out trillion-dollar coin