Sunday, July 31, 2011

Today, We Are All Zimbabweans

Via the Washington Post's Ezra Klein, a punk whose knowledge of history goes back at least 100 years, here's one of the bright ideas enjoying considerable buzz in the ultra progressive blogosphere ― magical platinum coins.
Obama could always just solve the crisis with a pair of magical platinum coins. Sure, that sounds preposterous, but Yale’s Jack Balkin argues that this is actually a perfectly legal strategy. Here’s the logic: Under law, there’s a limit to how much paper money the United States can circulate at any one time, and there are rules that limit how many gold, silver and copper coins the Treasury can mint. But the Treasury is explicitly allowed to mint however many platinum coins it wants and can assign them whatever value it pleases.
So the Mint makes a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Federal Reserve moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations in the near term without issuing new debt.
This Zimbabwe-esque crack political thinking is hardly a tongue-in-cheek proposal. One of Matt Yglesias' favorite ivy league fascists promoted it at CNN, so it must be reasonable ― and it might be inevitable, or something:
It actually seems to me that there’s a colorable argument that President Obama is legally obliged to order Secretary Geithner to order the mint to start creating large denomination platinum coins. The debt ceiling is legally binding. We can’t borrow any more money. But at the same time, the Social Security Act is still valid.
Someone tell John McCain that his friends in the left-wing media are getting a little nutty. We all know how much he hates "foolish," "bizarro," sophomoric ideas.

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