The Biden administration and the Democrats in charge of Congress have decided to explore the idea of exploiting a loophole in order to get their destructive agenda passed.
Senate Minority Leader Mitch McConnell has confirmed that the GOP will not go along with the Democrats’ plan to raise the debt ceiling, despite the fact that the Treasury Department hit the debt ceiling at the end of July. So, the left needed to come up with a new plan to get America further into debt.
Democrats looked back to an idea previously discussed by the Obama administration, which would circumvent a government shutdown by exploiting a loophole in the law and minting a $1 trillion platinum coin and depositing it at the Federal Reserve.
Business Insider reports: “While the Treasury Secretary has a bit of leeway to use ‘extraordinary measures’ to keep paying the bills for a few months using cash on hand and shuffling money around, that only works for so long. It may exhaust those abilities sometime in mid-October.”
After those abilities are exhausted, Treasury Secretary Janet Yellen would have to order the coin to be minted.
The idea of the platinum coin was also brought up in Democrat Rep. Rashida Tlaib’s “Automatic BOOST to Communities Act,” where the radical leftist congresswoman proposed minting two of these coins.
- the program would be funded directly from the Treasury, using its legal authority to create money via coin seigniorage, which is a statutory delegation of Congress’s constitutional power of the purse.
- The mechanics of this funding approach would be as follows:
- The Treasury Secretary would direct the U.S. Mint to issue two $1 trillion platinum coins, under the legal authority provided by 31 U.S.C. § 5112(k).
- Congress would direct the Federal Reserve to purchase the newly issued coins at full face value.
- The Federal Reserve would complete the purchase by crediting the U.S. Mint’s account at the Fed with $2 trillion in reserves.
This is apparently legal. The U.S. Code states:
“The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
In 2017, former President Barack Obama said that he discussed the platinum coin idea with then-Treasury Secretary Jack Lew.
“We were having these conversations with Jack Lew and others about what options in fact were available because it had never happened before. There were all kinds of wacky ideas about how potentially you could have this massive coin,” Obama said.
“There was this theory that I had the authority to issue through the mint this massive $1 trillion coin and on that basis we could try to pay off US Treasurys,” he added. “It was a very real possibility that we couldn’t get the votes for that and we couldn’t get those debts rolled over and we would be in a situation where were technically in default. At that point you were in uncharted territory.”
Even the Treasury Department doesn’t think this loophole is a good idea.
“Treasury officials have long ruled out using the trillion-dollar platinum coin as a solution to the debt ceiling, arguing that Congress should do its job and raise the ceiling itself,” Business Insider noted.
Of course, Democrats don’t care about the long-term effects of this insane plan, they just want to continue their policy of overtaxing the American people, spending money on insane policies, and increasing U.S. debt until inflation is so high that the U.S. resembles Venezuela.