Trillion Dollar Coin Idea Dies Sudden Death; Treasury, Fed Oppose Using Platinum Coin; Republican Strategy
At long last, a stupid, as well as illegal idea dies on the vine. Bloomberg reports
Treasury, Fed Oppose Using Platinum Coin to Avoid Debt Limit
The U.S. Treasury Department and Federal Reserve oppose the idea of minting platinum coins as a way to avoid the U.S. debt ceiling, according to a statement from Treasury spokesman Anthony Coley.Hopefully that will stop the downright silly, if not idiotic commentary regarding the coin, but don't count on it.
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” Coley said in an e-mailed statement.
“There are only two options to deal with the debt limit: Congress can pay its bills or it can fail to act and put the nation into default,” according to a statement today from the White House.
“When Congressional Republicans played politics with this issue last time, putting us at the edge of default, it was a blow to our economic recovery, causing our nation’s credit rating to be downgraded,” the e-mailed White House statement says. “The President and the American people won’t tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job.”
I suggest this seven-step charade is what we will see.
Politics of the Debate
- Obama will chastise Congress with talk of financial Armageddon if Congress does not raise the debt ceiling.
- Congress will pretend to hold the president hostage
- The secretary of the Treasury will get into the act with its own version of the default debate
- Perhaps a few payments on non-critical budget items will be temporarily skipped
- Wall Street will feign panic
- Constituents will pressure Congress to approve a new debt ceiling
- Congress will raise the ceiling with another useless warning about next time
To understand why a default is completely out of the question, please see Silly Worry of the Day: US Will Default; Politics of the Debate
As far as Republican strategy goes, I am in favor of shutting down the government unless there are significant budget cuts. Unfortunately, that will not happen. Republicans will cave in once heat from Wall Street begins.
Mike "Mish" Shedlock