Few things have divided the nerdo-sphere and punditocracy as much as the proposal to dodge the debt ceiling by minting a trillion-dollar platinum coin and depositing it with the Federal Reserve.
As we make our arguments, it'd be nice if we didn't all join Fox News in beclowning ourselves in the process. Hence this guide.
Dumb Reason to Oppose the Coin #1: A single trillion-dollar coin is easy to lose! Jack Lew is going to waste precious time searching the couch cushions for the damn thing, when he should be spending all his time practicing his signature. Or else it's going to get stolen! Have you not watched The Simpsons? If you can't trust the wealthiest — and therefore the most trustworthy — fictional American, Montgomery Burns, with a trillion-dollar note, how can you trust the Fed or Fort Knox to keep the coin safe?
Why It's Dumb: As soon as the coin is lost, it won't be valued at $1 trillion any more. All we'll lose is time and material spent producing it, which will be worth far less than a trillion dollars. Plus, Fort Knox is pretty secure.
Related Smart Reason to Oppose the Coin: Despite the lack of logic in the heist scenario, it will still spawn National Treasure 3. Is maintaining our credit rating and preserving grandma's Social Security check really worth a Nick Cage movie?
Dumb Reason to Oppose the Coin #2: It will be really huge! How are Joe Biden and Jack Lew going to carry it? This happens to be the actual objection made by Fox News and some Republicans staffers.
Why It's Dumb: Have you noticed that a twenty-dollar bill is not twenty times as massive as a one-dollar bill? Or that the dime is smaller than the nickel?
Related Smart Reason to Oppose the Coin: We're going to have to break it to people that those giant novelty checks given to charity and lottery winners are just for show. It will break Fox News anchors' precious monetary policy-illiterate hearts.
Dumb Reason to Oppose the Coin #3: It sounds wacky and is premised on a hyper-literal interpretation of an obscure statute. The U.S. would look mighty silly if we did this.
Why It's Dumb: Minting the coin is no sillier than putting our government in a position where it's legally required to make payments (because Congress has passed binding appropriations bills and the Social Security Act) and simultaneously forbidden from borrowing money to make these payments (because Congress refuses to raise the debt ceiling). This forces President Obama to choose which laws to break. That's a lot more banana republic-y than minting a damn coin.
Related Smart Reason to Oppose the Coin: The idea behind the coin was to fight crazy with crazy. The threat of the coin is supposed to force House Republicans to come to their senses and raise the debt limit. Alas, making it clear that the White House has a way of circumventing Congress actually makes it less that the GOP will act, because the coin absolves them from the blame they'd face if failing to raise the debt ceiling led to an economic meltdown.
It's hard to believe, but the trillion-dollar coin might actually make Congress less responsible.
Tags: Debt, Federal Reserve, Fox News, Money, Treasury Department