It’s unlikely that President Obama will sidestep a debt ceiling crisis by putting his imprimatur on platinum, trillion-dollar coins. But one House Republican is taking the threat seriously, introducing legislation that would bar the U.S. Treasury from creating the currency.
Rep. Greg Walden (R-Ore.) is pushing against an idea that has gained traction among many liberals, including economist Paul Krugman: The Treasury can mint platinum coins of any denomination, which, advocates argue, would allow the administration to produce enough funds to avoid the $16.4 trillion borrowing limit. The proposal first came up during the 2011 debt crisis.
“This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution,” Walden said in a statement Monday. “My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt.”
Walden compared the nation’s financial obligations to his own experience running a small business. “When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air,” he said.
Should Obama seriously pursue the platinum coin option, the political blowback would have only just begun.