Just when you thought the bickering in Congress couldn't get any sillier, now some Democrats apparently are serious about the silliest idea yet: Using a loophole in federal law to mint a $1 trillion platinum coin and use this magic money to cover the federal government's debt payments if congressional Republicans manage to block raising the debt ceiling in two months.
No one really believes this will happen, and the Obama administration is hardly likely to try it. But that hasn't stopped our own Rep. Greg Walden from drafting a bill to prevent the coin maneuver.
The whole crazy scenario stems from an act of Congress that said the Treasury secretary may order the minting of platinum coins in any denomination he chooses. The law was passed because coin collectors had complained that the strictly regulated gold and silver coins minted by the Treasury were too expensive for collectors to purchase. The idea was for the Treasury to make a little money for the federal government while making coin collectors happy.
In 2011, when Congressional Republicans held up raising the debt ceiling in an attempt to force budget cuts, someone dug up this law and suggested that the Treasury secretary could mint a $1 trillion coin, deposit it with the Federal Reserve and the money could be used to make payments on the federal debt, thus avoiding defaulting on that debt, which would be disastrous for the economy.
No one took it very seriously at the time, but the idea has resurfaced now that another debt ceiling deadline is approaching and Republicans once again are threatening to torpedo the entire U.S. economy to get their way on budget cuts.
Let's be clear about one thing: The debt ceiling is not about increasing the federal debt any further. It is about paying for debts the government has already incurred — spending approved by the same Republican-controlled House that now threatens to refuse to honor those commitments.
Raising the debt ceiling has not been a major issue in the past, no matter which party was in power. It was simply unthinkable that the United States government would fail to pay its debts.
Let's also be clear about this: Federal spending is out of control and must be reined in. Democrats and Republicans must do what is necessary to accomplish that. That means Democrats must agree to some budget reductions, and Republicans must agree to more tax revenue.
The "deal" that averted the "Fiscal Cliff" included some of both, but not enough of either.