http://www.politico.com/story/2013/01/trillion-dollar-coin-funny-money-or-real-solution-85930.html
*Trillion dollar coin: Funny money or real solution?* By: Ginger Gibson January 9, 2013 04:41 AM EST Democrats aren’t writing off suggestions that President Barack Obama skip another round of negotiations with congressional Republicans and simply raise the debt ceiling himself. Whether it’s minting a $1 trillion coin or citing the 14th Amendment, Democrats say there’s an upside in sidestepping contentious talks with the GOP that could end up with budget cuts to popular social programs. “If I were president, I’d use the 14th Amendment, which says that the debt of the United States will always be paid,” House Minority Leader Nancy Pelosi said Sunday on “Face the Nation.” “I would just go do it. But the Congress has incurred much of this debt. And so what are you saying, ‘We incurred it, but we’re not going to pay it?’” Pelosi has declined to comment on the proposal to mint a $1 trillion coin, which would create more funds instead of requiring Congress to authorize more borrowing. So far, the White House hasn’t weighed in on the $1 trillion coin. During the last debt ceiling debate, Obama dismissed evoking the 14th Amendment as an option. “I have talked to my lawyers,” Obama said at the time. “They are not persuaded that that is a winning argument.” A petition on the White House website encouraging the use of the $1 trillion coin has received more than<https://petitions.whitehouse.gov/petition/direct-united-states-mint-make-single-platinum-trillion-dollar-coin/8hvJbLl6> 6,500 signatures. Obama has said he won’t negotiate with Republicans over the debt ceiling, but some Republicans who felt they got little out of the negotiations over the fiscal cliff are gearing up for a fight. House conservatives want to see deeper cuts in government spending and some are already discussing shutting down government to achieve their goals. The debt ceiling is apt to be an economic stability balancing act. While the fiscal cliff had investors on edge, economists have warned that a prolonged debt limit debate would most likely ruffle more feathers on Wall Street. When Standard & Poor’s downgraded the U.S. credit rating in 2011, the battle over the last debt ceiling was cited as a reason. The $1 trillion coin is receiving more support in liberal circles. Rep. Jerry Nadler (D-N.Y.) floated the idea last week in an interview with Capital New York<http://www.capitalnewyork.com/article/politics/2013/01/7052758/looking-next-debt-ceiling-fight-nadler-proposes-trillion-dollar-coi> . “I’m being absolutely serious,” he said. “It sounds silly but it’s absolutely legal. And it would normally not be proper to consider such a thing, except when you’re faced with blackmail to destroy the country’s economy, you have to consider things.” New York Times columnist and economist Paul Krugman in a Monday column<http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint-that-coin/> endorsed Obama considering the coin as an option. “He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous,” Krugman wrote. “The decision should be obvious.” The proposal carries critics who warn of potential risks, like driving inflation and lowering investor faith in American currency while trying to do just the opposite. Rep. Greg Walden (R-Ore.) plans to file legislation to stop the $1 trillion coin or any other similar move by the Treasury Department to avoid the fiscal cliff. “Some people are in denial about the need to reduce spending and balance the budget,” Walden said in a statement. “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.” Democrats are already pointing to the cuts that have been made as an effort to encourage to Obama not to concede more reductions to Republicans. “Democrats have already cut nearly $2 trillion from programs that support middle-class families and communities,” Minnesota Rep. Keith Ellison, chief deputy whip in the Democratic Caucus, said. “The debt ceiling has been raised dozens of times in the past, including 18 times by Ronald Reagan. The president is right — no negotiations with Republicans who are playing political games with the security of the American economy.” And Rep. Jan Schakowsky (D-Ill.) compared the talks to a “economically perilous game of chicken.” -- Robert Naiman Policy Director Just Foreign Policy www.justforeignpolicy.org [email protected]
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