Noted for May 19, 2013
2 minutes ago
Thursday, January 10, 2013
A question for platinum coin supporters
- by New Deal democrat
Let's assume that Treasury minting a $1 trillion platinum coin is legal.
Now let's fast-forward to the year 2017. Another GOPer with the last name of Bush is President. The democratic Congress is blocking his plan to lower the tax rates on all earnings over $1 million to 5 percent. So he has the Treasury mint 1 million $1 million platinum coins and starts handing them out to his friends, cronies, and supporters.
It seems to me that would have to be equally legal.
In other words, this might be a classic case of "be careful what you wish for." Am I wrong?
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8 comments:
Why couldn't he just print up $100 bills and hand them around? It's legal tender regardless. Your example seems silly.
The obvious solution to the platinum coin problem is banning them in exchange for eliminating the debt ceiling entirely.
Wouldn't that be a trillion dollars in spending unauthorized by the legislative branch?
Now, if Bush III ordered the treasury to mint a million million dollar platinum coins and then SOLD them to his million friends/cronies/supporters, using the proceeds to fund the budget which was already approved by Congress, that would seem to be more-or-less equivalent to the sale of a single trillion dollar coin to the Federal reserve. Thoughts?
Keep up the stellar commentary, gentlemen.
Stevo's comment is right
He cannot just "hand them out".
He does not have the legal ability to "spend new money". He can only (and MUST) spend what ever congress has told him to.
So if congress passes a law that says GE will get a big fat 10 billion bonus if they hire one American in 2017 ("cronyism"), then the president MUST pay GE 10 billion if one american is hired.
So no, your example does not hold true (unless something in the constitution is changed that gives such powers to the president).
I don't get this post. According to its logic, the president can give himself infinity dollars and retire as the richest person in history. I don't think so. I think the idea is to use the money to pay the credit card bills.
Yeah Stevo is right
The issue currently is that Congress has already used their spending power under Article I Section 8 to pass appropriations bills that authorize (in fact compel) the president to spend money.
Based on current projections of revenue it is certain that debt will need to be issued in order to "faithfully execute" those laws that congress already passed
Thus the executive must issue debt to pay for those appropriations
But another law that congress already passed is the debt ceiling which says that the president (through the treasury) cannot issue debt above that limit. The president must "faithfully execute" this law.
In the current situation the president could get around the problem by creating a $1 Trillion dollar coin (or other denominations) in order to facilitate his constitutional duty to faithfully execute the laws.
In your scenario he would be, himself, choosing where to appropriate the money. This power does not belong to him, but instead to Congress (see art. 1 Sec. 8)
It gets more complicated than this due to the 14th amendment and a 1980's law.
The 14th amendment says (among other things) that "the validity of public debt shall not be questioned." The president therefore has a duty to prevent default on public debt. The United States takes in enough revenue to pay the interest on the debt (and can roll-over the principal) so it would not appear that this would be an issue regarding the debt limit at this time.
BUT in the 1980's Congress passed a law requiring that the executive could not prioritize certain payments over other payments.
This means that the executive cannot choose to only pay the interest on the debt before paying for other appropriated things (salaries, planes, medicare providers ect.)
Thus as the debt ceiling is approached the president is left with a choice.
Does he follow the appropriations laws as he is required to by the constitution?
Does he follow the debt ceiling law that he is required to by the constitution?
Does he follow violate the 1980s law in order to uphold the 14th amendment?
The platinum coin option provides a legal way out of this hobsons choice.
He could legally follow all of those laws, as he is required to do.
The big problem of course is that it is terrible policy. In the future would we buy back that coin? What relationship should the mint have to the federal reserve system? Does the treasury or the fed control the strength of the dollar?
These questions are usually on the back burner or ignored because the sides have common goals.
Silly. Only Congress can apropriate. In the current case, it has done so and the president would be minting the coin to pay. In your hypothetical, Congress has not authorized the expense.
I'd say that no one is a "supporter" of the Platinum Coin Solution.
The issue should be fixed in a more reasonable and typical way, by raising the limit, or preferably, by removing the debt ceiling and requiring Congress to actually pay what they appropriate.
If it can't be fixed in such a way, the Platinum Coin Solution is an alternative to a dysfunctional Republican Party that is more desirous to damage American Citizens than they are willing to break ideology.
How could president just "Hand out" money? Doesn't have to have appropriations approved by Congress?
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