Megan McArdle @ The Daily Beast:
I am still trying to wrap my brain around the idea that the hottest topic in Washington today is . . .collectible platinum coins. I mean, seriously. And this is not one of those stories where you find out that there are actually smart policy reasons why pundits and legislators are spending hours debating whether the president has the authority to mint a trillion or so worth of platinum coins; if anything, the story is even stupider than it sounds. Which just about sums up today’s budget politics. The platinum coin story tells you everything you need to know about DC’s broken budget politics—except how to fix it.
I hope you’ll pardon me while I go off on a rant here. The trillion dollar platinum is an absurdity wrapped in a legislative incongruity inside a farce. It is the logical extension of an utterly illogical legislative process that only becomes more irrational with each passing day. Each partisan battle has become stupider than the last. Silly loopholes are exploited for bargaining power, and the resulting stalemates are generally solved with a temporary patch that solves the immediate problem by creating a bigger one down the road. When the bigger problem arrives, naturally the other side seeks an even sillier loophole, resulting in an even more temporary patch.
We are now approaching the era of permanent fiscal crisis. As soon as legislators finished their New Year’s negotiations over a deal to avert the fiscal cliff, the commentariat emitted a collective sigh, then turned to debating . . . our next budgetary calamity, due in February when the deficit pushes government spending beyond the Treasury’s legal authority to borrow money.
Mere words can hardly convey the preposterousness of the debt ceiling. It is a stupid artifact of legislation that was hastily passed in the World War I era, and it creates a paradox at the heart of our budget politics: the law of the land commands the government to spend more than it takes in in tax revenue, and also, forbids the Treasury to borrow the necessary money. In the last go-round, the GOP exploited this conundrum to extract a package of ham-fisted spending cuts . . . you know, the ones we just delayed as part of the fiscal cliff deal, because exactly no one thinks that they are a good idea. S&P responded by downgrading US debt. Under the banner of fiscal responsibility, we trashed our credit rating.
As we once again approach the legal limits, left-liberal commentators, most notably Paul Krugman, are now getting behind the idea that the President ought to exploit his own loophole: a law passed allowing the government to mint platinum coins of any denomination. If the GOP won’t raise the debt ceiling, they say, the president should simply mint a $1 trillion coin, deposit it at the Fed, and continue paying the nation’s bills. Never mind that the law was never intended for this, and that these sort of hypertechnical legislative games might trigger the very political and financial crises they are supposed avert. Seemingly, the most important thing is for the president to defeat intransigent Republicans—even if that means that the president “for all Americans” who once spoke of winning the future and healing the planet will be reduced to presiding over the Franklin Mint.
The Great Platinum Coin Caper is everything that is wrong with Washington: a stupid partisan maneuver that erodes the institutions of our government for no gain other than an immediate political win. The only good thing that can be said about it is that the President seems to be too sensible to actually consider doing it. Nonetheless, the fact that intelligent people like Professor Krugman are even discussing this debacle, much less endorsing it, is a depressing reminder of just how nasty and short-sighted our nation’s capital has become.