When minting a $1 trillion platinum coin starts to look like a plausible way to avoid yet another round of budget brinksmanship, congressional Republicans and Democrats alike really need to do some soul-searching.
When the recent “fiscal cliff” deal failed to include a provision to raise the nation’s debt limit, it all but guaranteed a future battle over the issue; if Republicans refuse to raise the limit, as they threatened to do last summer, the government almost surely won’t be able to pay for the spending that Congress has already approved — bringing the country to the point of financial havoc. Yet under a peculiar 1995 law enacted for coin collectors’ benefit, Treasury Secretary Timothy Geithner can order the creation of platinum coins of any denomination he chooses. To circumvent GOP balking on the debt ceiling, all he has to do is mint a coin worth, say, $1 trillion, deposit it in the US Treasury, and use the money to start paying bills. There’s now an online petition urging the Obama administration to do just that.
Everything about the platinum coin idea sounds nuts, and bears far too close a resemblance to a 1998 “Simpsons” episode for comfort. There are also questions about whether the move would cause inflation, as printing money to pay bills tends to do.
Even so, the emergence of the idea says less about its proponents than about Congress — and specifically about the House Republicans’ Tea Party hard-liners, who’ve treated even minor procedural steps in the budget process like the debt ceiling as a way of wreaking havoc and avoid substantive compromise. The blame isn’t entirely on one side, though; Republicans’ intransigence on taxes has in turn made it easier for liberal Democrats to avoid confronting their own reluctance to reform entitlements.
Regardless, resorting to the $1 trillion coin option would likely undermine market confidence, just as another debt standoff would. The gambit would just be the wildest, wackiest episode on a years-long bender of partisan dysfunction — fighting crazy with crazy. The mere possibility of the platinum coin should prompt the House GOP to stop playing games with the debt ceiling and both sides to cut a long-term budget deal.