The Treasury Department announced that it would not mint a trillion-dollar platinum coin and that the Federal Reserve would not accept it anyway.
From the Washington Post:
The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.
That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. ”Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.
The inclusion of the Federal Reserve is significant. For the platinum coin idea to work, the Federal Reserve would have to treat it as a legal way for the Treasury Department to create currency. If they don’t believe it’s legal and would not credit the Treasury Department’s deposit, the platinum coin would be worthless.
This doesn’t mean that all cockamamie ideas about how to short-circuit congressional authorization for raising the debt limit are to be abandoned. But the coin option appeared to have the most support — and now that it’s dead, we can move on to the real showdown.
The administration’s position is that raising the debt limit is Congress’s responsibility until the day that Congress votes to make it the White House’s responsibility, which is a resolution the Obama administration would happily accept. Until then, White House officials say, they will not negotiate over the debt ceiling, and if congressional Republicans attempt to use it as leverage, then the consequences will be theirs to bear.
In other words, a gigantic game of chicken is now about to be played out with the enemy of economic growth — monumental uncertainty — as a sweetener. I don’t know which side is right about the effects of default. Neither does anyone else, and anyone who says they have the answer should be immediately suspected of rank partisanship. Since it’s never happened before, all we can do is guess at the consequences.
What makes Obama’s position especially egregious is that he is abandoning his own responsibilities in favor of a cheap political ploy — cast blame for any untoward consequences of default on his political opponents. He calculates that the voters will side with him in his fight with congressional Republicans — despite his refusal to deal with the budget deficit.
So if Obama won’t negotiate and congressional Republicans won’t raise the debt ceiling without the president helping to address our massive, unsustainable deficits, we seem to be headed for default. It may save the republic. It may destroy the Republican Party. For good, for bad, for worst, unless one side or the other gives in, we will experience in real life the old curse of unknown provenance:
“May you live in interesting times.”
The Democrat’s budget policy has the dead man switch wired–why shouldn’t the GOP’s be so?
If I were the Democrats, I’d be pulling out all the positive things the Founders had to say about large national debts. That should make the GOP back down.
more like a ‘salvage fuze’ intended to make sure that the weapon detonates,
and does some damage, before it is destroyed short of its target.
Didn’t know they were called “salvage fuzes” but I have read that during the cold war SAC aircraft were supposed to arm their nuclear weapons when they entered enemy airspace. The weapons were set to detonate at predetermined optimum altitude, so if the bomber were shot down before reaching its target the weapon would detonate when the crashing airplane passed the burst height. At least it would probably take out whatever nearby anti-air defenses had shot it down and prevent the enemy from capturing the weapon, aircraft, or its crew.
Why are you accepting the President’s meme that not raising the debt ceiling is equivalent to default? Default happens when the US can not refinance it’s debut or fails to make interest payments. None of this will happen if the debt ceiling isnt’t raised. We can meet the debt payments and pay for most of things government is truely responsible for. It is commentary like this that shows the Republicans deserve to be a minority party, not the Aiken-like comments. The latter if foolish talk, the form notion is an acceptance of Democratic Party propaganda. What’s next for you? Agreeing to an ban on semiautomatic rifles?
The problem is that we have no guarantee that the debt will be funded/paid instead of or ahead of EPA or some other bogus dept. of govt. We have a renegade administration that ignores all laws.
This is an administration so radical, so anti-American that they dream about what most Americans are terrified of – the deconstruction of America.
Therefore, it is more prudent to look at what they do, as opposed to what they say – http://adinakutnicki.com/2012/12/27/dhs-americas-planned-deconstruction-via-valerie-jarrett-domestically-foreign-policy-wise-addendum-to-barack-hussein-obamas-deconstruction-plans-commentary-by-adina-kutnicki/
They are laughing all the way to tyranny, once America “falls off the cliff”.
“Destroying the Republican party” and “Saving the Republic” may be the same thing.
That should read ‘Destroying the Republican Party RINO’s” and ‘saving the Republic by confronting the unprincipled spendthrift Deem’o'Crats”
The only strategy to force government to stop the crazed spending is to NOT raise the debt ceiling and make Congress and the executive branch agree on what amount government can we afford. Raising the debt limit is another kick down the road. Living off CRs, issuing more debt, raising punatve taxes, infinite QE and magic trillion coins are banana republic strategies thatwill eventually lead to collapse. The only sound strategy is to stop the stupid spending, deregulate our econmy and grow our way back to prosperity; the way we used to do it befre the NeoMarxists took over.
After 4 years of being weasel-worded by the regime, and the last few months of open attacks on the rule of law and the Constitution; what rational reason is there to believe that they are telling the truth in this. It is not like every other economic statement they have made has not proved to be a lie. I reference unemployment, inflation, GDP, etc.
And being the suspicious soul that I am, I note that it is a spokesman for the Obama/Geithner Treasury Department saying this. Aside from the fact that a spokesman can always be repudiated and they are expendable; I further note that all we have is a statement by a Treasury Department spokesman as to what the Federal Reserve Bank has ruled, with no corroboration from the Federal Reserve Bank. The Federal Reserve Bank is NOT part of the Treasury, and the Treasury does not speak for it.
We always have to take into account the possibility of deliberate Dezinformatsiya when evaluating any statement by the Federal government during this interesting time.
Subotai Bahadur
A note on the 14th amendment debt clause—it should be clear the clause was put in to prevent Southern congressmen from readmitted states–or Copperheads, for that matter–from arguing that the debt piled up to defeat the Confederacy during the Civil War was the Northern states, and theirs alone, to pay, and that they could work out the details amongst themselves. Thus, via the clause it was made clear–during the period those formerly seceded states were being readmitted–that there would be none of this “it’s YOUR debt, not OURS” talk. The validity of the public debt was not to be questioned. Period. The South, along with the North, would pay for the effort to defeat it, the North would not pay for the Southern effort to secede.
Nothing is said about paying notes on time.
And I don’t recall anyone arguing that the debt today is invalid. Unwisely acquired, certainly. But not invalid. Which means it *will* be paid. Eventually. And there the 14th leaves us. As an aside–if I recall correctly, even Abraham Lincoln took more time than expected by his debtors to pay them off. He eventually paid. Just not on time.
Which, I note, still is more than has been done in the GM bailout. And more than some expect mortgage holders to do.
Default has never happened before? On what planet?
If you think the US is a special case, somehow different from all the other countries who have defaulted, repudiated, or otherwise been unable to repay nationals debt, then you are truly an idiot.
How Big Would a Coin Made of $1 Trillion Worth of Platinum Be? BY WIRED SCIENCE STAFF 01.09.138
http://www.wired.com/wiredscience/2013/01/1-trillion-platinum-coin/
Of course it would not be made from one trillion worth of anything.
We figure a platinum coin might be too easily confused with a shiny new penny — at least by this crowd.
Bring it on. I for one would love to see what happens if Congress does not raise the debt ceiling and we let things play out for a while. Paycheck loan people and other lenders will step up to the plate to keep the social security pensioners and military from starving until they are finally paid. Insanity is doing the same thing over and over and expecting a different result. Let’s call the administration’s bluff and have some pain. A little pain now or an awful lot later.
A refusal to raise the debt limit is a de facto balanced budget amendment. It is impossible to default. We constantly have revenues pouring in — $2 trillion worth annually. It would simply require something that the president has so far refused to do (or the Senate for that matter) – produce a budget that works. I don’t care if you cut defense or entitlements. Whatever. But it does require a stance from every single legislator, as well as the president, on spending priorities. The Congress has the power of the purse, and the Speaker has the opportunity (I would say obligation) to say to the president this: “This is how much money we appropriate for you to spend. Spend this much and no more. Spend it on what we tell you to thru the normal appropriations process.” Is there anyone who actually believes that this president want to do anything besides create a crisis and blame Republicans for it? If President Obama were a firefighter, we would dislocate his shoulder every time a fire got put out for reaching around to pat himself on the back, and the other firefighters would take him outside and beat him down for starting all the fires in the first place! All these crises-the fiscal cliff, all the debt negotiations, ignoring Simpson-Bowles-these are all contrivances to pass the time and to blame Republicans for something else. Now a flu outbreak and a school shooting are being blamed for slowing the economy. Just don’t raise the debt ceiling and then adjourn the whole House for about six weeks and don’t answer the phone — that’s my tip for Speaker Boehner.
Your comment works only with a political party unafraid of bad press. So far they have not exhibited that they are unafraid.
Josh, in you scenario, which I would like to see come true, Boehner would be turning the tables by calling the President’s bluff. This president is someone who has never truly deserved the extraordinary blessing he has received, as dramatically illustrated by a Nobel Peace Prize falling down from the sky, given to somebody who had not done anything tangible to deserve it.
No wonder he demonstrates the behavior of a spoiled brat, and bullies everyone in sight!
But the only effective way to handle bullies is to confront them, which in this case requires balls of a grade we have not seen in a while. This is how Boehner lost the so-called fiscal cliff circus number, so it is understandable that he will try again to solve the whole quandary by intimidating a weaker party, and so forth and so on, until something really unusual enough to force reality on the scene happens. In theory such an unexpected event could be a sudden displaying courage by the GOP, but that’s not necessarily the only possibility:
We have a predictable train wreck with the national debt, which is in fact worse than politely admitted, since the unfounded liabilities are not even mentioned in the media. So the big political game is to divert our attention to some contrived disaster (like the GOP refusing to “act responsibly” and lifting the magical ceiling). Such game strategy is operative only because the national debt disaster in the making can be easily denied with big words and big megaphones, since we are all afraid to bring up the real picture. But what if something seemingly impossible was to happen? For instance what if the Middle East suddenly and “unexpectedly” explodes into a scenario with WMD? What if some jihadist finally manages to trigger some domestic disaster at some time to come? A lot of them have been stopped in time, by some felicitous combination of clumsiness on the part of the terrorist and diligence on the part of our agencies to fight them. But none of this is 100% guaranteed!
Should something of really compelling drama to happen, God forbids, or Devil permits, whichever comes first, it could grab the narrative. Would that stop the mad game in its track? What a strange thing to wish! Have a better one? Please share.
Sorry to disturb your narrative but they’re playing you. No means yes to these shysters.
The seed has now been planted and it will seem more reasonable when they next bring it up. And that won’t be to far off.
But they have not yet ruled out the $999,999,999,999.99 coin. Given the finely honed sense of humor of the Democrats, hear me now and believe me later.
Also:
http://www.cnbc.com/id/100371242
Not sure exactly how I feel about this, I am somewhat worried that if the GOP pushes this to the point of shutdown they’ll be commingle electoral suicide and turning what should’ve been a guaranteed victory in 2014 into a Democratic blowout. I’m worried because no matter how justufued a shutdown may be, the Republicans will never win the messaging war. Every mainstream media outlet will be blaming it on the Republicans before it even happens and so far the GOP has not shown itself to be particularly competent at countering that. A shutdown will cause real pain, and the low information voters will blame it on the GOP. There are still a large contingent of people out there who believe that happy days are just around the corner if things stay as they are, a Republican shutdown would give Obama and the Dems something to blame the state of the economy in 2014 and 2016 on. I think the far wiser choice would be to set more reasonable goals for the next 4 years. Trying to achieve major entitlement reform with Obama in the whitehouse and Democrats in the senate is not a realistic goal. A more realistic and more intelligent goal is to simply block anything destructive the dems try to do for the next 4 years, block major expansions of the federal government, block all their major “landmark” legislation, keep his agenda bottled up but don’t get too aggressive in pushing our own. I simply don’t see shutdowns or the threat thereof as likely to get any major concessions from Obama. If a shutdown is forced on him he’ll simply cut the things middle class voters care about the most while never touching welfare spending to the parasite class. The media will not call him on this and will instead hammer away on the “necessity” of big government, and in a climate where he’s strategically hurt the middle class the hardest, this message will stick, especially with nobody actively countering it. The thing I’m most terrified of is that the Republicans shut down the government, the media and Obama have their messaging field day, and the Democrats are able to damage the Republican brand enough to engineer retaking the house in 2014. If Obama and the Democrats have the ability to ram through legislation like they did in 2009 and 2010 then the damage they will do the country will be unthinkable. Say goodby to the 2nd amendment, say hello to carbon taxes, amnesty, and the rest of it. The biggest damage from Obama came in the first 2 years when he had congress, we must prevent a similar scenario from happening at all costs. It is not worth risking giving the Democrats an open season just to try and extract a few crumbs in concessions that will never actually happen as promised.
Like our guaranteed win in 2012?
Look, deficit spending is the economic equivalent of heroin. The best way to quit is to wean off in a controlled manner, but failing that going cold turkey is better than continuing the habit. Yes, there is going to be pain, but that pain will fade as things regain their natural equilibrium. Right now the federal government is sucking $1 trillion out of the economy and channeling it based on political, rather than economic, considerations. Imagine what could happen if that were no longer the case.
That’s why the GOP must hold the line now. Right now is pretty much the longest time until the next election and the maximum time for the benefits of balancing the budget to be felt. If we let this moment pass we either have to get an agreement with the Democrats, which they are philosophically opposed to, or we become some bastard combination of Greece and Wiemar Germany.
We needed a tax deal more than the Democrats. They don’t mind raising taxes, especially if they could blame it on the GOP. Now they need a deal more than we do. The Democratic Party exists because it supplies client groups. If the spigots dry up those clients will look elsewhere, and they might not come back. In this confrontation we have the whip hand. I hope we use it.
If there’s plenty of time for the benefits of balancing the budget to be felt, then why do it now? The media will ensure that Obama gets the credit just like with Bill Clinton. They’re still parroting the meme of the “Clinton surplus” despite the fact that it was only the congressional Republicans who stopped his desired path after 1994. Even if we manage to drag Obama kicking and screaming into fiscal sanity, Hillary in 2016 will just claim it was really all Obama’s idea and that Democrats are the fiscally responsible party that saved the economy. The truth is not relevant here. As far as the Democrat’s client groups go, those will never be cut so long as Obama remains in office and continues abusing executive power. He will cut things like the military or border enforcement instead of shave a dime off welfare, then blame Republicans for not being patriotic and keeping the money flowing. The media will echo these lies. Unless and until the Republicans have a proven effective way to counter that then creating a situation where a large portion of the government will have to be shut down, with Obama deciding on which portion, is stupid. When I lived in Washington state the democratic governor did the same thing, whenever the Democrats didn’t get the tax increases they wanted she shut down police and fire departments, closed libraries in suburban areas, things of that nature. Never once did any of the state’s multitude of ravenous public health handout programs get a haircut. Hell, they never even discussed cancelling the multi-million dollar hotel for the homeless they were building. That’s the kind of stuff we can expect if we try and force Obama to cut, every last one of the Democratic clients will be kept fat at the expense of whatever the voters care about most and with the help of an abetting media they’ll probably be dumb enough to fall for it. Furthermore, Obama can be expected to agree to cuts that he will renege on as soon as they come due and the debt limit is safely increased, he cannot be bargained with in good faith in this regard.
Victory in 2012 was never assured, but if there had been a government shutdown in 2011 we may very well have lost the house, just imagine how deep we’d be in it then
You don’t understand, we don’t have plenty of time to balance the budget. It’s going to take quite a while for the effects of deficit spending to work their way out of the economy. The 22 months we have until the next election may not be enough, but it’s all our political system allows. That’s why we have start now. Ideally we should have started 10 years ago. At this point I frankly don’t care if Obama gets credit for fixing the problem, though the GOP nominee could run hours of ads of the Democrat nominee predicting doom and horror if the budget were balanced.
As for what will get cut, the biggest entitlements aren’t part of this issue. SS and Medicare are both funded by independent taxes and trust funds, which consist of essentially treasury bonds. The trust funds can sell those back to fund their checks which in turn reduces the total debt owed by the government, allowing the treasury to issue more bonds to cover the expenditure. Obama doesn’t have that much else to cut. Defense has strong backers from both parties, though they will feel the pain. State and Justice are both havens for liberal staffers. After that there isn’t much to cut that wouldn’t eventually be picked up by the private sector or isn’t a Democrat client. With funding drastically reduced the various client groups would be so busy fighting each other they won’t be able to fight the GOP. Conservatives could further blunt Obama’s weapons by combing through the list of what is funded and pointing out the favoritism and by setting up non-profits to operate things like national parks that people like. When the administration refuses to let private citizens operate their property for the enjoyment of others the organizations could spend the money on advertising asking why.
We’re never going to have the kind of communications system that can compete with the Democrats’, at least not until the current media paradigm collapses, but I don’t see that happening for another generation. Making that a requirement to fight is nothing more than a surrender on the installment plan. We have to fight with the weapons we have.
This time last year most people thought the election was in the bag. They only differed on who they thought would win. The problem with counter facials is you never know how it could have turned out. Maybe a shutdown in 2011 would have mobilizes the GOP base, the ’94 shutdown certainly didn’t cause the House to flip. It took discouraged conservatives to do that.
“SS and Medicare are both funded by independent taxes and trust funds, which consist of essentially treasury bonds. ”
No, what they hold are congressional IOUs, with no actual value. They are not the same as the bonds that you buy from the Treasury. Neither fund has any assets, just a promise from Congress to repay, someday. And both funds are maybe a decade away from the point where they will be paying out more than their taxes will be collecting in revenue, at which time they will have to be subsidized from the general fund.
You know someone is wrong when either way they advise the same thing happens. For example, re “Not sure exactly how I feel about this, I am somewhat worried that if the GOP pushes this to the point of shutdown they’ll be commingle electoral suicide and turning what should’ve been a guaranteed victory in 2014 into a Democratic blowout. ”
When the GOP pushed their position without pulling punches we experienced what might be called a Democratic blowout anyway.
Back to the drawing board guys.
Here is the problem,. No one wants to cut spending. I meant no one. That goes for Conservatives also. Conservatives want to cut spending the way Liberals want to control guns.
Liberals do not want to control guns – they use them all the time. They say they want to control guns. Saying you want to control guns and controlling guns are, if you hadn’t noticed, two completely different things.
Likewise Conservatives do not want to cut spending – they only say they do. Republicans want to cut spending, they say they do and propose to as well.
They get nowhere. They are alone. Its Conservatives and Democrats against Republicans. OK I grant a handful of Rhino’s and a few Beltway types are a real and measurable nuisance – but not enough to thwart the whole party.
” It may save the republic. It may destroy the Republican Party. “
Oh – silly me. I thought there would be a downside to a default. Seems to me if we were to ‘save the republic’ it’d be almost a necessary task to remove the democrats from power but to also be rid of those pesky republicans too? A twofer? How nice! When does the Tea Party assume power?
Barry HUSSEIN Soetero Kardashian and his unprincipled Deem’o'crat Regime will do anything in their power to avoid facing America’s real problem and that is THEIR profligate SPENDING.
After all ‘Spending Cuts’ would put a damper on Democratic VOTE BUYING with the feckless ‘Benefit Entitlement Junkies’ whose only lifeline is the ever higher TAXES Being imposed on the MINORITY in the country who as ‘Makers’ are the only ones paying Income Taxes.
Obama needs a more fitting change to his position:
A petition to change his title from “President”… to “Caesar”.
https://petitions.whitehouse.gov/petition/change-title-chief-executive-united-states-president-caesar/Y9qFCnCk?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl
Guess that’s a wrap on using that giant wooden coin in the garage to pay my taxes.
The U.S. defaults only if we, or, rather, Barack and Harry (who have yet to come up, in over four years, with a budget for our country’s pocket book), refuse to pay the latest *interest installment* on our debt, which would be like paying the minimum due on your monthly Visa-Card bill. When you reach the point where you are unable to pay the minimum on your card, it’s lights out, kiddies. Merely snipping up the card solves nothing at that point. But we are not yet *at* that point. Not quite. And all of this debt-ceiling crap is simply a scare tactic to get us (deluded taxpayers) to play along with the Democrat insistence that we apply for *another* increase on our Platinum-Card credit limit. Because Barack and Harry need to buy more stuff — stuff that we have no money for, but that they desperately need in order to maintain the welfare-state/public-unionista gravy train that keeps them in power. Which is what this is all about. Power. Staying in power. Holding on to power. Extending federal power, at the expense of the essential, “middle class” taxpayer, whom Obama has NEVER supported, regardless of the constant stream of lying words that have issued from his politician’s mouth from the very first day he entered the national consciousness.
Obama’s only purpose is to cajole and co-opt the “middle class” as a means of quieting and ultimately euthanizing it (for the better good of the State, of course!).
Hence, Obama (and company) just keeps saying the words. Telling us what he thinks we need to hear. Telling us whatever it is that he supposes will keep us in his favor regardless of the despair of the moment. Words. Not facts. Not anything approaching reality or clarity or resolution. Just words. Happy words; soothing words; fighting words; calming words; alarming words; assuring words … Whatever fits. *Designer* words. Or, simply, as Shakespeare put it: Words, words, words.
But truth? Truthful words? Truthful words supporting a well-reasoned position? (I fairly choke on the very notion.) Come on. When is the last time any one of us has heard the truth from a “leading” elected official in this country? Or a ranking “journalist”? Or, dare I say, a denizen of the obscenely-paid, pop-cult elite of the land we love? Pah! “Truth”?!? (the Jack Nicholson character stated) … You, we, America “can’t handle” the truth. We need Obama’s constant lies.
That is what a slim majority of Americans voted for in 2012. Not the truth. But the Lie that pleases.
“I don’t know which side is right about the effects of default. Neither does anyone else, and anyone who says they have the answer should be immediately suspected of rank partisanship. Since it’s never happened before, all we can do is guess at the consequences.”
People tend to forget that the government just does not go broke. There always is tax money pouring in. So if the Republicans in the House were smart, they would note all of the essential services, like Social Security and the Military, that WILL get paid even if there is a government shut down.
But what I think will really drive the Democrats crazy is if there IS a shutdown, how little most Americans may notice that our big, bloated, and inefficient bureaucracy is not functioning. Tell me the truth, will the majority of Americans really miss the Department of Energy, The Bureau of Indian Affairs, or even the Department of Education for a few weeks until this mess is sorted out? Shocking, but we may actually discover that we can get along quite well by eliminating a lot of these useless Federal bureaucrats, and that has the Democrats terrified. And then many Americans may see the logic in actually reducing the size of this bloated government of ours.
Can we say “State of Emergency”? Yes, Obama can, and probably is waiting with baited breathe.
The silliness of the trillion-dollar coin idea reminds me of the argument over whether Bill Clinton, having served two terms as president, could be appointed vice-president to get around the narrow definition of “eligible.”
How often do we see harebrained legal theories like these, coming out of Republican administrations and their supporters, continue to sputter for weeks as if they have a chance in Oakland of passing muster in the real world? It only ever seems to happen with Democrats.
What’s the difference whether congress strikes a trillion dollar coin and gives it to the Fed.to pump phony money into the economy? The fed pumps up phony money anyway–they don’t even need a coin to do it.
The stimulas is built into the baseline. Can cut that $400 billion this year and the balance next year we get very close to a balanced budget. They are all in it together they don’t want a balanced budget. If the republicans won’t make it better who cares if they win elections.
All The Gold In The World – The Definitive Infographic Submitted by Tyler Durden on 01/14/2013
http://www.zerohedge.com/news/2013-01-14/all-gold-world-definitive-infographic
It is beyond shocking that this childish idea would be promoted by “educated” persons both in media and government.
Americans should be very concerned about the maturity of our “leaders” and their apparent rush to foist this absurdity on the American people.
This is no joking matter. There is something VERY wrong here.
This was a BIG red flag.