With Congressional Republicans once again threatening to take the nation’s debt limit hostage for spending cuts, economic circles have been abuzz with the possibility that a standoff could be averted via use of a $1 trillion platinum coin. An obscure law, read literally, gives the Treasury Secretary the ability to mint platinum coins of any denomination. Deposited with the Federal Reserve, such a coin would give the federal government the ability to make payments without needing to issue more debt, defusing the possibility of a default due to the debt ceiling.
The idea has won the endorsement of Nobel Prize winning economist Paul Krugman, a former head of the U.S. Mint, and Harvard Law School Professor Laurence Tribe. “Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely,” Krugman wrote.
Today, NBC’s Chuck Todd asked White House Press Secretary Jay Carney if the administration had ruled out using the platinum coin option. Carney refused to disavow the idea, instead reiterating that Congressional Republicans should simply raise the debt ceiling: