The Platinum Coin Is As Absurd As The Problem It Solves, And That’s A Good Thing
President Obama can beat Republicans in the debt celing standoff by turning their own tactics against them.
Not since Samuel L. Jackson announced his desire to have the snakes removed from his passenger flight has a single sentence thrilled the Internet as much as Chuck Todd’s question at yesterday’s White House press briefing: “Do you guys have a position on this trillion-dollar coin business?” At the same time, one could hear the collective groan of critics who hoped the whole coin idea would stay buried in online obscurity rather than become a topic of discussion for people with actual influence. It’s understandable that the silliness of the trillion-dollar coin rubs its opponents the wrong way, but it’s that very silliness that makes it the perfect response to the ridiculous state of American politics.
The precise origins of the trillion-dollar coin are a matter of debate (some credit blog commenter “beowulf” for the idea, while others trace its inspiration to nuclear energy magnate C. Montgomery Burns), but in the last week it’s become a preoccupation of the economic blogosphere. The particulars have been covered in exhaustive detail elsewhere (see The Atlantic’s Matthew O’Brien for a good overview), but the short version is this: due to a loophole in commemorative coin law, the Treasury Department technically has the power to mint a platinum coin with a face value of $1 trillion, deposit that coin in the Federal Reserve, and use the funds to pay its debts if Congress fails to raise the debt ceiling in time to avoid default.
I don’t intend to get into the legal foundation for the platinum coin approach (though experts including Harvard professor Laurence Tribe and the co-author of the law believe it’s sound) or even to suggest that the president might actually go for it. No matter what garbled signals his press secretary sends, Barack Obama is a serious man who doesn’t like stunts. After spending more than four years cultivating an image as the only grownup in the room, he’s probably not going to step out into the Rose Garden, pull an oversized novelty coin from his pocket, and announce that he just ended the debt ceiling standoff before it started. But that’s too bad, because he totally should.
Non-legal arguments against the coin share a common theme: it’s stupid, and its supporters are sinking to the GOP’s level. Kevin Drum of Mother Joneswrites, “This whole thing is not just a ridiculous idea, it’s a bad idea too.” Ross Douthat at The New York Times argues that it would be “trying to match the Republicans irresponsibility for irresponsibility, in a constantly escalating game of ‘can you top this?’” Republicans, Drum notes, “seem willing to set the country on fire to please their increasingly fever-swampish base, and eventually they’ll pay a price for that at the polls,” so Democrats should just sit back and wait for them to self-destruct. One might have thought that happened in November, when they lost the presidential election, several Senate seats, and the popular vote in the House, but two months later, they’re still in control of the House and still threatening to trigger a global depression out of spite. How’s that working out?
Even supporters of the trillion-dollar coin admit that it’s all very silly, but that’s sort of the point. Republicans’ debt ceiling antics are utterly ridiculous; under the guise of curtailing future spending, they’re threatening to refuse to make good on debts the U.S. already owes because of spending Congress already authorized. They’re so concerned about the health of the U.S. economy that they claim they’re willing to destroy it. It may all be empty posturing, but it only gets them what they want if Obama agrees to play straight man to the clowns and accept a pie in his face for the good of the republic. And as we’ve seen time and again during the president’s first term, pretending that elected Republicans are grownups who take their responsibility to govern seriously doesn’t cause them to live up to expectations. Instead, it seems to embolden them to behave even more radically, since they know they can count on someone else to keep the country afloat while they’re busy running around with their pants on their heads.
So yes, President Obama could continue to act as if Republicans are negotiating in good faith and either allow them to extract more painful, unnecessary budget cuts or risk the possibility that they’ll reject his overtures and destroy the U.S.’s credit rating for no particular reason. Or he could flip the script so that the joke’s on them for once. As Jamelle Bouie writes, “The $1 trillion coin is a ridiculous idea. But it’s no less ridiculous than the debt ceiling, and in the big scheme of things, it’s far preferable to defaulting on our obligations.” Minting the coin wouldn’t lower the president to the GOP’s level; it would prevent the GOP from dragging the entire country down with it. If the U.S. had a functioning government and a healthy political debate, we wouldn’t be talking about the debt ceiling or the coin, but it doesn’t, so we are. Pretending that everything’s just fine on Capitol Hill won’t bring Mr. Smith back to Washington, but acknowledging and heightening the absurdity could hasten the exit of the current gang of malcontents and allow more reasonable and responsible leaders to take their place. So if you take policy seriously, it’s time to treat politics as farce.
Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter at @txprice.
Cross-posted from the Roosevelt Institute’s Next New Deal Blog
The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.
Image by Steve Thomas