[lbo-talk] Brad DeLong signs on to "Silly Solution"

Shane Mage shmage at pipeline.com
Fri Jul 29 07:10:17 PDT 2011


The President's Obligation to Take Care That the Laws Be Faithfully Executed Requires Him to Start Minting Large-Denomination Platinum Coins That seems to me the only way that he can faithfully execute all the laws. Otherwise, he has to break some--or have the Treasury Secretary violate his fiduciary duty as trustee of various trust funds.

Minting high-denomination platinum coins, by contrast, creates no such problems. And is completely legal.

On Jul 27, 2011, at 11:11 PM, Shane Mage wrote:
> On Jul 27, 2011, at 10:34 PM, Doug Henwood wrote:
>> On Jul 27, 2011, at 6:25 PM, Anthony Kennerson wrote:
>>> This is an idea that has been getting some steam among some progs/
>>> lefties.
>>>
>>> Basically, the idea is that the President would order the Fed to
>>> mint a
>>> platinum coin, load it up with an extraordinary value -- as in, the
>>> TRILLIONS of dollars -- and them use it to swap out for Treasury
>>> notes of
>>> the same value, which would be used to pay off the debt obligations
>> I just finished editing an interview I did with Brad DeLong for
>> Sat's radio show. He brought this idea up, and said it was a
>> possible silly solution to a silly problem.
> He'd say that, of course. But the "problem" isn't silly, it's
> *stupid*, and the "solution" has profound merits beyond the present
> manufactured Disaster Capitalism Crisis.
>
"I suggest that he immediately mint 50 ten-pound liberty-head coins, each of them denominated at $100 billion, and temporarily store them in the Treasury Secretary's office. Then the Treasury Secretary can take them up one at a time to the Federal Reserve Bank of New York in a special armored train as required. Think how much money the federal government could make from the movie rights alone..,

Matthew Yglesias:

The Platinum Coin Option: I keep hesitating to write about this because it sounds insane, but Jack Balkin’s a professor at Yale Law School so I’ll let him say it: Sovereign governments such as the United States can print new money. However, there’s a statutory limit to the amount of paper currency that can be in circulation at any one time. Ironically, there’s no similar limit on the amount of coinage. A little-known statute gives the secretary of the Treasury the authority to issue platinum coins in any denomination. So some commentators have suggested that the Treasury create two $1 trillion coins, deposit them in its account in the Federal Reserve and write checks on the proceeds. It’s right here in 31 USC § 5112 “Denominations, specifications, and design of coins.” It’s super-prescriptive about all kinds of things until you get to section (k): (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time. It actually seems to me that there’s a colorable argument that President Obama is legally obliged to order Secretary Geithner to order the mint to start creating large denomination platinum coins. The debt ceiling is legally binding. We can’t borrow any more money. But at the same time, the Social Security Act is still valid. There are appropriations bills that extend through September. The assumption is that starting August 2, the Treasury will start “prioritizing” payments. But whence the legal authority to do that. By contrast, the legal authority to mint platinum coins is right there in the statute. This would, I assume, lead to a downgrading of American sovereign debt. I would furthermore say that by the failure of President Obama to have taken this step last month he has already violated his oath of office. One of the laws he is required to faithfully execute requires that he prevent the debt of the United States from being questioned. Yet by his inaction the debt of the United States is, right now, being questioned--and is being increasingly questioned more and more as time passes."


> Shane Mage
>
> "scientific discovery is basically recognition of obvious realities
> that self-interest or ideology have kept everybody from paying
> attention to"
>
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