Thursday, January 10, 2013

Mint-y fresh

I'm not going to say a lot about the idea of Obama having the Treasury mint a trillion dollar coin and thereby avoid the issue of the debt limit. I don't consider it a serious solution to a serious problem, and the debt ceiling deserves a serious solution. A sometime commenter here, swain, wrote this on Plain Blog:
The Trillion-Dollar-Coins plan is a bad idea... And it's very gimmicky.

But the bigger problem this plan gives the executive branch the power to mint as much money as it wants whenever it wants. The reason we have an independent Fed is because we know that's a really, really bad idea...
Suppose George W. Bush decided one day that he would exploit an obscure law, designed to print commemorative quarters for collectors, to instead generate $2 trillion in government funds.

Even if a literal reading of text of the law suggests this is possible, isn't it absurd? ... Regardless of the text, that's a VERY long ways from the legislative intent. No amount of sloppy wording can create a loophole that big...
We really don't want a President to decide to (mis)interpret an insignificant law to conclude they have unlimited authority to create infinite amounts of money...
And, I love Obama, but a President that tried to claim that power should be impeached... At some point you just have to say... Um. No.
I second that. We have to face up to the issues confronting us, not search for tricksy loopholes.

Postscript. Really, whoever thought of this, just go write a sitcom if you need an outlet for your wacky ideas.


Anonymous said...

Hmmm. What's whackier?

A) Refuse to acknowledge that spending authorized by one Congress is just as validfor future Congress (unless expired in the passed law or overturned by a more recent Congress), creating a Constitutional and economic crisis just to get policies implemented that would not otherwise pass the Congress ...


B) Refuse to negotiate with hsotage takers with via a novel, legal, if somewhat unusual Constitutional power.

I'm going with choice B. There's a real question of whether the debt ceiling is Constitutional at all, since by simply refusing to act the current Congress can force the entire country to ignore the laws passed by prior Congresses. I don't think that either makes sense or what the public in 1790 or 2013 had in mind.

At best, the debt ceiling was a Constitutional shortcut so that each issuance of debt wouldn't have to produce the formality of Congress's approval. At worst, it is either an archaic Constitutional remnant that produces an internal inconsistency in our system of government or a direct violation of the 14th Amendment.

Any argument that we should just allow today's GOP to use it as some sort of leverage to either gain its preferred policies -- whether one thinks they are good for the country or not -- or force the country to take it's medicine, it utter nonsense. It's just another form of hostage-taking that can't be tolerated at any cost. If they want to overrule laws and debts passed by prior Congresses and signed by the President, then they must do so affirmatively, not by simply failing to act. In that case, our system of balance of power correctly allows the president to exercise executive authority to be sure that the laws of the United States are followed, including laws that commit the United States to spend money. This is particularly critical when our entire economy and the full faith and credit of the United States are under challenge.

Let's not forget that the Democrats who opposed the war in Iraq could have used this same scheme to force Bush change his policy. If they had, Bush would have done anything necessary to defeat the effort and nobody would have seriously questioned him. He would have gone on TV and called Democrats using the debt ceiling as leverage unpatriotic, then just would have done what he wanted.

It's the GOP who have decided to go nuclear. If a trillion dollar coin disarms them, so be it. The president is just spending the money that Congress already authorized, no more and no less. That is his job.

ModeratePoli said...

@Anon, well, you've expressed your opinion and I still disagree.

A few points of critique. 1)When you give an A vs. B choice, that' a red flag of a false choice argument.

2)Minting of a coin doesn't disarm the GOP. It just moves the leverage to the issue of a president avoiding a debt ceiling vote (a well-established precedent) and to appropriations.

3. It doesn't calm markets if the president resorts to such strange actions.

Frankly, the GOP doesn't have that much leverage with the debt ceiling anyway, as I've already written. Obama has already shown that he's willing to negotiate, willing to take balanced measures to reduce the budget. He looks good. If the GOP thinks they can ram stuff through, they're going to look delusional. Delusional people don't have leverage in a democracy because they don't have strong reelection prospects or many allies. You can stop worrying.