One of the craziest ideas to come out of the debt ceiling crisis is now dead in the water. The Treasury Department announced yesterday that it has no plans to mint a $1 trillion platinum coin to circumvent the debt ceiling.
Deputy Assistant Treasury Secretary Anthony Coley released a statement yesterday explaining why the Treasury Department would not be taking action.
“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.”
This puts to bed one of the nuttier ideas floated as a solution to the debt ceiling problem facing the United States in the upcoming months. The U.S. already reached the previously agreed upon debt ceiling limit at the end of 2012, and is using creative bookkeeping to keep the country from defaulting. Those measures, however, will only work for a few more weeks.
Without a deal, the U.S. risks defaulting on its debt, which would be catastrophic. The previous argument about the debt ceiling during the summer of 2011 lead to Standard & Poor’s downgrading America’s credit rating.
White House Press Secretary Jay Carney has called on Congress to come to a deal, laying blame for any credit issues squarely on their shoulders.
“Congress can pay its bills or they can fail to act and put the nation into default…The president and the American people won’t tolerate congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job.”
Republicans want to balance a debt ceiling increase with spending cuts. Sen. Deb Fischer, R-Neb., said, “I believe we cannot agree to increase the borrowing limit without addressing our out-of-control spending…That’s what the American people demand. And that’s what our children and our grandchildren deserve.”
It appears that the battle over the budget and borrowing is just beginning.
– Benjamin Nanamaker, InvestorPolitics Editor
The opinions contained in this column are solely those of the writer.
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