Treasury: No $1 trillion coin quick fix on debt limit

A Treasury Department spokesman announced today that the department will not mint a platinum coin to sidestep raising the federal government's borrowing limit, telling the Washington Post that "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."

The idea, which had gained traction among some congressional Democrats and political analysts as a way of defanging the debt ceiling as a bargaining chip, was that the Treasury Department could simply mint a platinum coin, declare the value at $1 trillion, and deposit it into the Federal Reserve to allow continued spending in the absence of a vote to raise the debt ceiling.

• What's up with the $1 trillion coin?
• Obama won't battle with Congress over debt ceiling

With the idea now buried by Treasury, the stage is set for a full-on fight about the debt ceiling. President Obama and congressional Democrats have signaled that they simply will not negotiate on a vote to raise the borrowing limit, saying that it is Congress's duty to pay bills it has already accrued.

But congressional Republicans have given every indication that they plan to use the debt limit as a bargaining chip to extract deep spending cuts from reluctant Democrats.

[Nigel_Gold]

If minting a one trillion dollar coin was NOT an idiotic idea then why stop at just ONE trillion? Why not mint 17 of them and totally pay off the national debt? Just use 1 oz of platinum for each and keep minting coins until we all have one. Of course it is a stupid idea to think the Government can just mint a coin to solve the national debt. Not only stupid but absolutely reckless.
Many foreign economies have been totally ruined when irresponsible governments have utilized the printing press to pay their debts. It is the same as having a lot of credit cards and constantly using one to pay off another until you are all maxed out. The US Government has been doing exactly this for many years and they are already maxed out but instead of doing the right thing they are always looking for another Band-Aid to delay the problem further.
Paper money which is not backed by gold is unconstitutional. It is clearly stated in article 1, sections 8/10 of the constitution, "No state shall pay its debts with anything except gold & silver coins unless it is backed by gold or silver". The whole reason for this is to avoid inflation. When dollars which are not backed by gold are put into circulation they are worthless and therefore they reduce the value of all our dollars by diluting their value. This results in higher prices for you and me on everything we buy, aka inflation. This is just another way to tax the American public without calling it a tax.
The Government needs to "man up" and deal with the debt problem instead of trying to sweep the garbage under the carpet. See the video and read more about Printing Money To Pay Debts... http://goldirasavings.com/printing-money-to-pay-debts

[dieselpop1]

Save the platinum. Use the idiot in chief's wooden nickel.

[REDGUN53]

Social Security is not an entitlement, the Federal Government mismanaged the program funded by the workers and employers and now that the money is going they want to end the program. Federal workers have their own program-does the Feds borrow from that program and not pay it back?

[Social_Adjudicator]

The point at which SS and Medicare both becomes an "entitlement", is when the payout exceeds the amount payed into the account of which it is being drawn upon. In certain instances in respect to SS, the payout exceeds that of what a worker may have been due, by as much as 150-180%. Far too many have been "entitled" to more than that of the contribution, when in fact they are not. Taking from one or more to "gift" to yet another, "constitutes" involuntary servitude.

[mars7578]

The Right is too anxious about tomorrow and the President is too concerned about his agenda to give serious deliberation to an issue which extends beyond his time in office.This is a perfect storm to reach a resolution filled with fiscal pitfalls for today as well as tomorrow.America is in a desperate place,and if the FED and TREASURY can give trillions to the investment banks,then it should do the same for the general economy.By funding the normal operating expenses,not only is America not borrowing,but the tax revenue can pay down the debt.The President has said that if America default,Americans get paid first.Unless America files bankrupcy,the debt skyrockets on interest alone.This Group of Officals are trying to create bliss out of a shotgun wedding.This Group could not reorganize a small agency amicably,let alone the whole government.Although the fiscal need is here,why let a bunch of dentists perform heart surgery .

[dpattan]

A trillion dollar coin. It only demonstrates the trouble this country is in dreaming up gimmicks such as this. Hate to be a doom and gloom messenger but we're scre**d.

[TimeToRetire]

Speaking of coins, beware coin buyers. Hidden in the middle of ObamaCare is a requirement that all gold coin transactions are now 1099. In other words, the government knows exactly how much gold you have. Even though gold value only increases no more than inflation over a long period, say about 5%, you will be required to pay a capital gains tax of 28% of the increase in value. You lose money. I wonder what else is that ObamaCare which has nothing to do with healthcare.

[facelessdrone2005]

You only pay capital gains tax when you sell an investment, and then only if you make a profit. No sale = no tax. Gold is an investment, duh! This is no change to existing law other than reporting it so the Government can catch tax cheats.

[tmittelstaed]

This is not "Obama vs the Republicans"

This is "Congressional Democrats vs Congressional Republicans"

Obama only gets as much power over the federal budget as Congress decides to let him have. And by not letting him do the 1 trillion coin trick, and letting the budget go until the last minute, Congress has effectively removed his ability to veto anything.

People on this blog who are claiming this has anything to do with Obama are just showing their ignorance. In this particular fight, the White House is just standing on the sidelines, like the rest of us, throwing out suggestions.

[payasyougo]

Treasury: No $1 trillion coin - Instead maybe $10 trillion coin to cover the next four years.

[gorgeousm]

OUR LEADERS STILL REFUSE TO TAKE RESPONSIBILITY AND DOWNSIZE
FOR THAT WHICH THEY CREATED, BUT MAKE OTHERS DOWNSIZE AND PAY

We all contributed to our current financial disaster, but our leaders certainly led us ...

... in major MAJOR ways, which set really bad examples for the young as well as for the old.

And now, in order to evade and shirk responsibility, accountability, etc, and to focus away from the answers that would make our leaders (as well as followers) PRODUCTIVE, these same "leaders" attempt to apply their sophisticated but wrong and UNPRODUCTIVE answers ...

... thereby assuring an ultimately worse financial/economic Armageddon.

[Type_Z]

Exactly, both sides. What a mess.

[CuriousServant]

It needs to be both... increased revenue and cuts. The question is really what services do we expect of our government? How much social security> How much military. I naively thought we would reduce our military spending when we won the cold war. That was before we declared the war on terror.

That is working out as well as the war on drugs and the war on poverty. Those vague wars can never be won. There is never a clear goal, a clear victory.

[arthanyel]

Agree completely. A rational balanced approach is the right answer, along with REAL re-engineering of both the process and the structure of how we deliver services.

I especially like your rare (and completely correct) observation that the core question is what services do we WANT the over meant to perform, and once that is clear we need to fund those services and provide them efficiently and effectively.

[rzarc2]

There never any intention of "winning" those wars. Their sole purpose is to keep the populace in constant fear so we can can give billions (now trillions) to corporations to fight a non-existent war.

As far as the budget goes, healthcare is the only real problem and not just for the government but business as well. Our healthcare bill is over 15% of GNP whereas EVERY OTHER country has a bill UNDER 10% and get better results. Of course EVERY other country has national healthcare. We are the exception. How's that capitalistic system in healthcare working for us?