We Could Fix Debt Crisis With ... Platinum Coins?

Bizarrely, laws restrict issues of gold, silver, copper, but not platinum
By Mark Russell,  Newser Staff
Posted Dec 7, 2012 12:27 PM CST
We Could Fix Debt Crisis With ... Platinum Coins?
With another debt ceiling battle looming, could President Obama bypass the whole mess by just issuing a $1 trillion platinum coin?   (Shutterstock)

(Newser) – President Obama says he is "not going to play that [debt ceiling] game" with Republicans again. But how to avoid disaster if Congress doesn't raise the ceiling? It turns out the president has one ridiculously simple solution as an option—platinum coins. Incredibly, there is no legal limit on how much the Treasury secretary can mint and issue in platinum, writes Brad Plumer in the Washington Post. So rather than deal with another debt showdown, some legal and economic experts say the Treasury could issue two $1 trillion platinum coins, deposit them in the Federal Reserve, and then the Fed could move the money into Treasury to pay the bills.

"I like it,” says the head of one economic think tank. "There’s nothing that’s obviously economically problematic about it." Of course, there is the slight drawback of the fierce political reaction that move would almost certainly cause in Congress. It's "wildly unlikely" that the platinum loophole will be invoked, writes Plumer. But if "Congress does not raise the debt ceiling as part of the fiscal cliff negotiations, then some of these wacky ideas may get more attention." (The White House, meanwhile, wants to take away Congress' power over the ceiling altogether.)

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