Remember last month when we discussed the “platinum coin option”? If you’ve forgotten already, it was the ridiculous idea that President Obama could have the U.S. Mint produce a pair of trillion-dollar platinum coins and deposit them with the Federal Reserve to pay off the national deficit. You probably thought it was such a goofy plan that no one in Washington, D.C. could possibly take it seriously, right? Well, think again:
So supporters — including Rep. Jerry Nadler (D-N.Y.) — say that President Barack Obama should order that a couple of platinum trillion-dollar coins be made and then have the coins deposited in to the Fed and, voila, in debt ceiling crisis averted.
[. . .]
Nadler isn’t laughing. He told Capital New York earlier this week that it’s a perfectly viable option.
“There is specific statutory authority that says that the Federal Reserve can mint any non-gold or -silver coin in any denomination, so all you do is you tell the Federal Reserve to make a platinum coin for one trillion dollars, and then you deposit it in the Treasury account, and you pay your bills,” Nadler told Capital New York.
He continued: “I’m being absolutely serious. It sounds silly but it’s absolutely legal. And it would normally not be proper to consider such a thing, except when you’re faced with blackmail to destroy the country’s economy, you have to consider things.”
“It is like economics meets an episode of The Simpsons,” says Jim Pethokoukis of the American Enterprise Institute, “It’s not likely to happen.” Indeed, I think I can confidently say that it is definitely not going to happen. But as Pethokoukis adds, “the fact that we’re talking about it in semi-serious tones, if I was an investor – and I saw supposedly serious people talking about this as an option, I would be very alarmed.”
No cause for alarm. There are no serious people talking about this as an option—only politicians.