The Platinum Coin Hysteria of 2011

Reporting on Politics and Policy.
July 31 2011 12:00 PM

The Platinum Coin Hysteria of 2011

On Wednesday, I first heard about the idea of exploiting a loophole in minting statutes to create a $2 trillion platinum coin and use it to pay the Treasury's debt obligations. It sounded totally insane. And then on Friday Annie Lowrey reported it out:

The idea originated in the lefty blogosphere; FireDogLake writer "beowulf" wrote about this "escape hatch" or "subway tunnel" all the way back in January. Most commentators dismissed it as fanciful. But it does seem to be entirely legal, and is getting renewed attention and a wee bit of credibility as the negotiations drag on. Yale constitutional law professor Jack Balkin floated it as an option in a CNN op-ed this week.
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Balkin was also the prime intellectual sponsor of the 14th Amendment "constitutional option," which, because it sounds less goofy, has actually been floated by Democrats as this crisis lurches on. What does it mean that Democrats want to believe this, or that articles about double-secret debt solution loopholes are so popular? It's sort of ominous. Not making a one-to-one comparison here, but it puts me in mind of the Tea Party-inspired Republican efforts of 2009-today to prove that this or that program they don't like can be magicked out of existence by putting the Consitution in a black hat and reading it with special glasses. The collapse of faith and trust in the way government works is mutating with every crisis, every bit showdown on a bill.

David Weigel is a Slate political reporter. You can reach him at daveweigel@gmail.com, or tweet at him @daveweigel.