Over the weekend, Treasury Department officials announced the Obama administration would not pursue the minting of a trillion dollar platinum coin as a way of reducing our debt or deficits.
But many on the political left are still pushing the idea as legitimate and urging the president to reconsider his position.
Most Republicans were watching this movement with a combination of amusement and bewilderment, but the traction behind the coin idea is now leading to legislative efforts to prevent the government from ever pursuing such an idea.
Oregon Rep. Greg Walden is also chairman of the National Republican Congressional Committee. He says Democrats are toying with this idea only through gross misuse of a law passed in the 1990s aimed at platinum coins for collectors. Walden’s new bill would block an economically reckless move in the future.
“It would basically take away this authority by limiting the value of the coins to a very small limit and prevent this from happening,” said Walden. “You could still mint a platinum coin but it would be for the purpose it was intended for, a coin collector’s coin.”
Walden says it doesn’t take an economic genius to figure out why creating a trillion dollar coin would be a huge mistake.
“When you’re adding false value to the supply, you diminish the value of the money people are holding. It just can’t work any other way,” said Walden. “They can spin it here or spin it there but if the government’s creating money from where there is no value then they’re devaluing the money that we have. History’s littered with countries that have attempted to go down this path.”
It’s unclear how urgently Walden’s legislation will be pursued now that the Obama administration has rejected the idea of the coin. But Walden says the liberal embrace of this idea illustrates how hard it is to achieve common sense solutions across the aisle on the bigger fiscal challenges to the nation.
“This is the kind of lunacy that is rampant today in Washington. You have a president who says we don’t have a spending problem. How can you say that when the Congressional Budget Office just told us that we’re already $293 billion in the red this fiscal year that started October 1 and will go over a trillion dollars in the red once again, five years in a row all under this president by the end of the fiscal year,” said Walden. “We have a spending problem. It’s like an addict who doesn’t believe he has an addiction. Eventually, you’ve got to admit you have a problem. Then you’ve got to get on a recovery plan so that you can get over your addiction. We have an addiction on deficit spending. People think there’s an easy way out and there isn’t. We’ve got to make the difficult but important choices to get America on the right track.”
So do those tough choices include House GOP leaders being willing to allow a temporary partial government shutdown during the debt ceiling debate to demand spending cuts and entitlement reforms? Walden, a member of leadership, indicated the party is prepared to take that step.
“I think that we have to get these reforms and at some point you have to draw the line in the sand or in the concrete and just stop this runaway spending,” said Walden. “I hope it doesn’t get to that. I was a small business owner for 22 years. You didn’t want to default loans. You didn’t want to do these things, but you did have to face up to reality and the reality is we’ve got to get spending under control. Hopefully it doesn’t come to that, but it may well. It’s time to have this fight.”
