Jan 06 2013

Pay national debt with funny money?

Published by at 11:46 am under Rainey

rainey
Barrett Rainey
Second Thoughts

Suppose you get a bill from your credit card company. It shows a large balance due the end of the week. Deciding you should pay in full promptly, you get out pen and checkbook. You draw what looks like one of your usual checks, fill in the exact amount and drop it in the mailbox. Bill paid.
Yeah. Sure.

But, before you ashcan this example of substituting worthless paper for currency-of-the-realm to pay bills, consider what folks are tossing around in Washington, D.C. circles. And not all of ‘em elected incompetents.

We’ve hit the debt ceiling. Did it a couple weeks ago. Federal debt reached $16.394 trillion. That’s the current limit. The ceiling. So, until the zoo we used to call Congress fixes the problem, the Treasury Department is playing shell games with the loose change still available to pay bills. Even that slight-of-hand will have to stop about the first of March. Flat broke.

So – let’s have the folks at the U.S. Mint create a platinum coin in the exact amount of the national debt – $16.394 trillion. We’ll take that new coin down to the nearest bank and deposit same in the federal account that’s brimming over with red ink. Bill paid. Debt gone.

Crazy? Maybe. Legal. Yes.

Our federal laws allow the Secretary of the Treasury to do just that. The specific authorization was written many years ago to allow for creation of commemorative coins. But – the Secretary has blanket authority to “mint and issue platinum bullion coins and proof platinum coins” in any denomination and for any purpose desired. No congressional approval needed. No new laws necessary. Just do it!

While the President has carefully avoided comment, some of the folks at the “zoo-on-the-hill” are giving the idea some consideration. There’s even a petition on the White House website which says – in part – the $1 trillion coin “may seem like an unnecessarily extreme measure” though “no more absurd than playing political football with the U.S. – and global – economy at stake.”

If that scheme – which is being taken seriously in some quarters (pardon the pun) – is not to your liking, former President Clinton has another idea. Just invoke the 14th amendment to our Constitution and let the current President raise the debt ceiling all by himself. The 14th was written after the Civil War and says – in part – “the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Clinton says President Obama should just “do it.” When we went down this ridiculous road in 2011, Clinton said, if he were still in office, he’d have done it and “forced the courts to stop me.”

The current legal staff at the White House has looked at this scheme and is not convinced it’s a “good” idea. But it’s still an “active” idea.

If all this sounds like we’re living in the Land of Oz, it’s ‘cause we are. Our dysfunctional government – stalemated politics – anger and dissension – the ideological nuts – all have brought this nation to a political dead end. Getting anything done – especially the last couple of years – has meant using parliamentary gimmicks and goof-ball tactics. Neither party can control the legislative process. There’s no effective leadership to assure things get done. We haven’t even had an original government budget in more than a decade. Just those damned “continuing resolutions.” Patch-and-scratch. Keep propping things up. Steal from one pocket to fill the other.

Printing phony coins to pay real bills – using Civil War remedies to take care of complex, 21st Century national problems – ideas as weird and warped as the times we live in. And serious people are taking them – seriously.

The rest of the world watches us and wonders at our seemingly endless battles among ourselves. We’ve become more of a world curiosity than a world leader. We’re a productive, capable population – with an economy we know how to run – being constricted and hamstrung by our own government.

Abe Lincoln’s warning that this nation’s downfall – should it ever happen – would “come from within” is more and more on my mind these days. It should be on many more minds than just this ol’ fella..

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