Comment: Platinum Coin Preposterous? Maybe Not

(See in situ)

In reply to comment: Obviously not practical (see in situ)

Platinum Coin Preposterous? Maybe Not

I've been looking into the $1 trillion platinum coin idea since it first surfaced over a year and a half ago, which is about when Ron Paul came up with a similar idea of simply canceling the Treasury debt held by the Fed as a a result of its QUANTITATIVE EASING treasury purchases. Interestingly enough, Ron Paul's idea was enthusiastically endorsed by Keynesian economist Dean Baker writing in the New Republic in July, 2011. "Ron Paul’s Surprisingly Lucid Solution to the Debt Ceiling Impasse"

The $1 trillion platinum coin idea does indeed appear to be based on a legal loophole which would make it possible to do an end run around Congress. Some think this is what President Obama had in mind when he declared that he was not going to "Play that game" with Congress with regard to negotiating spending cuts, the deficit and the debt ceiling.

I see the debt cancellation idea and the platinum coin idea as two sides of the same coin... so to speak. Either alternative makes the debt ceiling dilemma go away temporarily while buying Congress about a year or so of time to fashion economic policy that avoids throwing the economy back into recession.

This may not be a popular thing to say here on the Daily Paul, but I think it would be a mistake to allow a debt ceiling impasse to force an automatic cold turkey shut down of all government spending not paid for by current tax receipts. Here is my take on this issue in a video I recorded in July of 2011 when I still worked at Thomson Reuters.

07/21/11 U.S. downgrade would be bullish for Treasuries, says Rombach….

Ed Rombach