“The Democrats’ magic-coin fantasy”
Marc Thiessen, Washington Post:
If there were any doubt that leverage had shifted to Republicans in the debt-limit standoff, it was dispelled when Obama supporters urged the president to create $1 trillion out of thin air by minting a magic coin. Seriously.
On Saturday, the Treasury Department finally put a halt to the magic-coin insanity, declaring, “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.”
Well, speak for yourself. On some legal fronts, the admission that the Treasury or Federal Reserve doesn’t believe the law can be used to create magic coins is likely to cause heartbreak. But I digress.
What is so sad is that, until Treasury issued that statement, supposedly serious people were advocating doing just that. On Friday, White House spokesman Jay Carney refused to rule out the idea (as he had previously ruled out resorting to the 14th Amendment to ignore the debt limit). In a letter to Obama last week, Senate Majority Leader Harry Reid, Majority Whip Dick Durbin, vice chairman of the Democratic Caucus Chuck Schumer and the incoming Budget Committee chairwoman, Patty Murray, urged the president “to take any lawful steps to ensure that America does not break its promises and trigger a global crisis — without congressional approval, if necessary.” Since the 14th Amendment was off the table, the only step he could take “without congressional approval” was minting a platinum coin.
In a town that specializes in stupid ideas, this one reached a new level of stupid. Think about it: If the president could really create a trillion dollars out of the ether simply by minting a single $1 trillion coin, why would we stop at one? We could mint 17 of these puppies and eliminate the national debt! Heck, we could mint 18 and have a trillion-dollar surplus!
Imagine all the problems in Washington that could have been solved with this one fiscal-policy innovation. There would be no need for more fights over whether we should cut spending or raise taxes. Just mint more trillion-dollar coins. Want another trillion-dollar stimulus spending bill? Mint a coin! Make Medicare and Social Security solvent without cutting benefits? More coins!
Like King Midas, Obama could have turned anything he wanted into gold .?.?. or platinum, at least.
Maybe I’m misremembering, but isn’t a cow, a giant, a Dickensian limey child, and a goose squatting out platinum eggs required for this to work…? I mean, if we’re going to follow certain tropes, let’s at least acknowledge the referents.
This could have been the solution to the euro-zone crisis. No need for austerity measures, mes amis. Just mint a trillion-euro coin! Imagine for a moment how we would have responded if Greece had announced that, instead of cutting spending to reduce its debt, Athens was withdrawing from the euro and minting a trillion-drachma coin. (Okay, it would have to be a few hundred trillion drachmas to match our $1 trillion coin, but you get the picture.) We’d all laugh hysterically.
Well that’s what the world and — more importantly — the markets, would have done if Obama followed the advice of those pushing this insane idea.
The fact that so many Obama sympathizers were seriously advocating an idea that may have originated with an episode of “The Simpsons” shows that the GOP holds all the cards as the deadline to raise the debt limit approaches. Before Jan. 1, Obama was more than willing to risk a recession in order to get his way on tax hikes. He won the “fiscal cliff” showdown. Congratulations, Mr. President.
Now the tide has turned — and Democrats know it. Obama might have been willing to go over the cliff, but he cannot default. He needs Republicans to raise the debt limit, which is why the left is squirming for a way — any way — to extricate him from this conundrum. But there is no way out. For all Obama’s bluster about not negotiating on the debt limit, the fact is he is bluffing. He has to negotiate. He has to compromise. He has to make concessions. He has no choice.
Unfortunately, here’s where I break with Mr Thiessen, his optimism and faith in the GOP leadership outshining my own, if only for the purposes of reminding them of the power they have. But John Boehner has shown an uncanny knack for snatching defeat from the jaws of victory, then claiming victory once he’s secured defeat. It is surreal to watch, in fact. To borrow from the wicked but grounded Hans Gruber, who manages to open the impenetrable safe at Nakatomi Plaza by recognizing the predictability of his “establishment” opponents, “the circuits that cannnot be cut are cut automatically in response to a terrorist incident. You asked for miracles, Theo, I give you the F.B.I.”
Let’s just hope Boehner isn’t the Agents Johnson.
If the magic-coin episode teaches Republicans anything, it’s that Democrats know the president is cornered. So if Republicans blow this opportunity — if they buy Obama’s bluff and capitulate as they did on the fiscal cliff — they’ll need more than a magic coin to save their political hides.
I guess we’ll see. But Rove and his group right now are working to “reform” the primary system to keep TEA Party interlopers out, Boehner and his crew spend more time fighting and demonizing conservatives than they do Marxist Democrats, and the House just gave Boehner a vote of confidence by re-electing him speaker, largely on the strength of his sting of epic surrenders.
So sanguine I’m not.
Sure, we’ll get “cuts,” but they’ll be promised cuts in the rate of spending, and they won’t amount to a thing. This is yet more political theater. DC plods on as usual, with phantom money and empty promises and corrupted, self-interested leadership — all of them aware that a collapse is inevitable.
They’re just also aware that they’ll be taken care of.
The rest is a pose to create a perception. And though no one really believes the pose any more, we still accept it — and in some ways continue to root for it — because honestly: what the hell else choice do we have? Save civil revolt?