Showing posts with label timothy geithner. Show all posts
Showing posts with label timothy geithner. Show all posts

Sunday, January 13, 2013

Treasury Rejects Coin Solution to Debt Ceiling Conundrum

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Related Posts:
A Coin As Big as 89 Whales
White House Plays Coy on Minting Coin
Obama Should Mint Coin to Avoid Debt

From Ezra Klein on Washington Post
The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it.
That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.

Official White House Statement on Huff Post
There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default," said Press Secretary Jay Carney. "When Congressional Republicans played politics with this issue last time putting us at the edge of default, it was a blow to our economic recovery, causing our nation to be downgraded. The President and the American people won't tolerate Congressional Republicans holding the American economy hostage again simply so they can force disastrous cuts to Medicare and other programs the middle class depend on while protecting the wealthy. Congress needs to do its job.

~~~~~~~~~~~~

With this, the White House has now ruled out the two best options for preventing a default in the event that the House GOP refused to life the debt ceiling. The White House has been quite adamant that the other alternative (invoking the 14th Amendment) is not acceptable.
So now the stakes are high, as The White House has refused to negotiate with the GOP on a debt ceiling hike.
What bargaining chips does The White House hold? Unclear.
~ Joe Weisenthal on Business Insider

. . . the last debt ceiling confrontation crept up on the White House because Obama refused to believe that Republicans would actually threaten to provoke default. Is the WH being realistic this time, or does it still rely on the sanity of crazies?
The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue.
. . . And default in any of these senses would risk a huge collapse of confidence.
So is there a plan, or will it just be another case of tough talk followed by a tail-between-the-legs retreat?
~ Economist Paul Krugman on NYT

















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Tuesday, January 8, 2013

Obama Should "Mint the Coin" to Avoid Debt Crisis

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Related Posts:
A Coin As Big as 89 Whales
White House Plays Coy on Minting Coin


Update: Nine Faces of the Platinum Coin from Talking Points Memo

...A stalwart band of merrymakers are finding a lot of fun Monday in the concept of a giant platinum coin.
~ Denny Gulino, MNI Financial News

From Joe Weisenthal on Business Insider
So where does the Trillion Dollar Platinum Coin fit in?
In the section of the law which specifically relates to the Treasury's ability to create money (coins and bills) section K says this:
(k) 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 other words, when it comes to platinum coins, the Secretary (who is currently Tim Geithner) has discretion on the designs, specifications, quantities, and denominations of platinum coinage.
So let's say, Tim Geithner decided to stamp out a $1 trillion coin. What does that accomplish?
The idea is that after it was created, Geithner could walk it over to the Federal Reserve, and deposit it in the Treasury's bank account. Then the Treasury, rather than having to issue new debt (because remember, Congress hasn't raised the limit) can make sure its checks clear against this money.
Voila, crisis averted!



Funny Money
Imagine sitting around the kitchen table, trying to figure out how you're going to pay off that next-generation HDTV you just bought.
Then someone has an idea. Brush off one of the old checker pieces in the attic, assign it a value of, say, $2,000 -- and use that newly minted "coin" to pay the credit card.
~ Fox News

I don't think there's even a remote chance that any court in the country would uphold a Treasury reading of this law that used it as a pretense for minting a $1 trillion coin.
. . . This whole notion is the kind of thing that Herman Cain would come up with. It's time to stop treating it seriously.
~ Kevin Drum on Mother Jones

. . . There is a Twitter hashtag – #mintthecoin – and a wan, spindly White House petition created on January 3 that needs around 25,000 signatures and currently has just under 2,000, which makes it resemble the winsomely pathetic Charlie Brown Christmas tree.
. . . This is an elegant solution – if you are a cartoon villain given to sitting in a vast underground bunker and innovating plans for world domination while petting a white cat. It makes less sense for real mortals. In fact, it has all the aspects of a group of well-financed mad scientists plotting to create a giant slingshot to avert an asteroid hurtling towards the earth.
~ Heidi Moore on Guardian UK

There’s exactly zero chance that the House Republicans, faced with the Coin Threat, will suddenly turn logical and decide that they’re not going to play political games around the debt ceiling after all. Rather, the Coin Threat is a political game, played by the other side: it’s the executive branch bringing itself down to the House Republicans’ level.
If you believe that the country is best run by grown-ups, you can’t believe in #mintthecoin, because it simply isn’t a grown-up strategy.
~ Felix Salmon on Reuters

My bill will take the coin scheme off the table by disallowing Treasury to mint platinum coins as a way to pay down the debt.
~ Congressman Greg Walden, R-Oregon, on a bill in which he wants to make it illegal to mint coins to pay the national debt























"That's silly/zany/juvenile!" This is probably true, but it's not a dispositive objection. Republican intransigence over the debt ceiling is juvenile. There is no particular reason that the president should not use a juvenile strategy in response.
The key question to ask about the platinum coin is not "is it juvenile?" but "will it work?" Minting the coin will allow the federal government to continue to meet its spending obligations despite hitting the debt ceiling. It will allow President Barack Obama to pressure Congress to repeal the debt ceiling. That -- not whether it seems silly -- is the important thing.
~ Josh Barro on Bloomberg



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Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.
. . . Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.
So why not?
~ Paul Krugman

There are two possible trump cards for Obama. One is the “platinum coin” option, in which the government mints a trillion-dollar coin and uses it to pay its debts... There’s also the 14th Amendment option, which some legal observers believe empowers the President to ignore the debt ceiling.
. . . Obama appears cool to both ideas. But Scott Wagner, a former NYPD homicide detective with extensive experience negotiating hostage crises, says the President needs to at least hint at a willingness to pursue an alternative endgame. A hostage negotiator needs to persuade a hostage taker that he is totally isolated and that the negotiator is the only one who holds the key to his way out — that “deep down, he is not in control of the situation.”
Greg Sargent on Washington Post








Petition on WhiteHouse.Gov
Direct the United States Mint to make a single platinum trillion dollar coin!

With the creation and Treasury deposit of a new platinum coin with a value of $1 trillion US Dollars, we would avert the absurd-yet-imminent debt ceiling faceoff in Congress in two quick and simple steps! While this may seem like an unnecessarily extreme measure, it is no more absurd than playing political football with the US -- and global -- economy at stake.
Created: Jan 03, 2013
Issues: Economy
Learn about Petition Thresholds
Signatures needed by February 02, 2013 to reach goal of 25,000
18,882
Total signatures on this petition
6,118

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Sunday, December 2, 2012

John Boehner - Nowhere Man

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He's a real nowhere man,
Sitting in his Nowhere Land,
Making all his nowhere plans for nobody.
~ The Beatles


From Fox News
WALLACE: How would you characterize the deal the Treasury Secretary Geithner offered you on behalf of the president this week?

BOEHNER: A non-serious proposal.

The president is asking for $1.6 trillion worth of new revenue over 10 years, twice as much as he has been asking for in public. He has stimulus spending in here that exceeded the amount of new cuts that he was willing to consider.

It was not a serious offer.

~~~~~~~~~~~~

WALLACE: Take us behind the scenes. Take us inside the room. What was the mood music when Tim Geithner sits there, like we are here and presented this to you? What did you say?

BOEHNER: I was flabbergasted. I looked him and said, "You can't be serious."
I've just never seen anything like it. You know, we've got seven weeks between Election Day and the end of the year. And three of those weeks have been wasted with this nonsense.

WALLACE: OK. So, if they are wasted, where are we now? And, quite frankly, what are the chances we're going to end up going over the cliff?

BOEHNER: Well, right now, I would say -- we're nowhere, period. We're nowhere.

We've put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They've actually asked for more revenue than they have been asking for the whole entire time.

~~~~~~~~~~~~

WALLACE: I want to ask you one other question about their offer, because this was a real surprise. Geithner also said they want you, Congress, to give up any powers over voting an increase in the debt limit forever.

BOEHNER: Forever. Silliness.

Congress is not going to give up this power. I've made it clear to the president, that every time we get to the debt limit, we need to cut some reforms that are greater than the increase in the debt limit. It's the only way to leverage the political process to produce more change than what it would if left alone.

~~~~~~~~~~~~

WALLACE: You've talked about the fact that the president won and you came out with a concession the day after the election. They point out that the president campaigned on raising tax rates, you know, and it was the big issue, between him and Romney. And, they say, just as he had to cave, after your victory in the 2010 midterms, now, it's your turn to cave on tax rates.

BOEHNER: Listen, what is this difference where the money comes from? We put $800 billion worth of revenue, which is what he's asking for, out of eliminating the top two tax rates.

But, here's the problem, Chris, when you go and increase tax rates, you make it more difficult for our economy to grow. Half of that income is the small business income. It's going to get taxed at a higher rate. And as a result, we're going to see slower economic growth.



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Boehner is 'nowhere' because his owners, Norquist and the Koch brothers, will not let him go 'anywhere.'
~ comment by Mes on Yahoo News

Boehner reminds me of Sheriff Bart, in the movie Blazing Saddles, holding a gun to his own head.
~ comment by Zeph on Yahoo News

Well Mr. Boner..when 67% of Americans say tax the rich, you will be going somewhere...OUT ON YOUR (__!__) !
~ comment by Tim P. on Yahoo News

Operation Rolling Tantrum
Oh, boy. This isn’t going to end, even when or if a deal is reached on defusing the austerity bomb; John Boehner has just declared that he’s going to hold the full faith and credit of the United States hostage every time we hit the debt limit. Nor will it be a case of holding the nation at gunpoint until it meets GOP demands; Republicans are signaling that they don’t intend to make any specific proposals, they’re just going to yell and stamp their feet until Obama soothes them somehow.
~ Paul Krugman in NYT

Despite Boehner’s rhetoric, there is no economic evidence to suggest that taxing income above $250,000 hurts the economy. In fact, business thrived during President Clinton’s tenure, as the wealthy paid more.
~ Igor Volsky on Think Progress

Boehner just shot himself in the foot
. . . If he's saying that it doesn't matter whether we have revenue from the rich or spending cuts from the rest, this is pretty devastating. It shows how out of touch they are with the middle class, and if I was Obama, I would hammer that every day.
~ Coolelegans on Daily Kos

This is all a win-win for the President. If he gets what he wants in the negotiations he looks good. If we go over the cliff which is looks like we are, all the polls show the American people will mostly blame the Republicans.
~ comment by Jooce81 on Mediaite

Memo to Agent Orange: there was an election. Your side lost, big time.
~ comment by HuskersLoveBO on Mediaite











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