Wouldn't have bothered posting but nobel prize winning economist paul krugman likes the
idea,totto we are not in kansas anymore.
The Former US Mint Director Behind The Controversial Law Explains Why A Platinum Coin
Could Avoid A Major Crisis
Joe Weisenthal | Jan. 8, 2013, 4:22 AM | 3,542 | 29
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Science ChannelThe #MintTheCoin movement rolls on!
Remember, there are a lot of people arguing that an alternative to the debt ceiling crisis is
for the Treasury to create a $1 trillion dollar coin made out of platinum, and then ship it to
the Treasury's bank account at the Fed.
Yesterday Paul Krugman came out in favor of this, while on the other hand, a US
Congressman came out in opposition to it.
Last night we got an email from Phillip Diehl, a former Mint director, who also helped craft
the legislation allowing coin minting (he also sent it to Cullen Roche).
Here's his full email, in which he notes that A) Yes it's legal, and B) it would have no adverse
economic effects.
----------------------------------------------------------------
I'm the former Mint director and Treasury chief of staff who, with Rep. Mike Castle, wrote the
platinum coin law and produced the coin authorized by the law. Therefore, I'm in a unique
position to address some confusion I've seen in the media about the $1 trillion platinum coin
proposal.
* In minting the platinum coin, the Treasury Secretary would be exercising authority which
Congress has granted routinely for more than 220 years. The Secretary's authority is derived
from an Act of Congress (in fact, a GOP Congress) under power expressly granted to
Congress in the Constitution (Article 1, Section 8).
* What is unusual about the law (Sec. 5112 of title 31, United States Code) is that it gives the
Secretary complete discretion regarding all specifications of the coin, including
denominations.
* Moreover, the accounting treatment of the coin is identical to the treatment of all other
coins. The Mint strikes the coin, ships it to the Fed, books $1 trillion, and transfers $1 trillion
to the treasury's general fund where it is available to finance government operations just like
with proceeds of bond sales or additional tax revenues. The same applies for a quarter
dollar.
* Once the debt limit is raised, the Fed ships the coin back to the Mint, the accounting
treatment is reversed, and the coin is melted. The coin would never be "issued" or circulated
and bonds would not be needed to back the coin.
* There are no negative macroeconomic effects. This works just like additional tax revenue
or borrowing under a higher debt limit. In fact, when the debt limit is raised, Treasury would
sell more bonds, the $1 trillion dollars would be taken off the books, and the coin would be
melted.
* This does not raise the debt limit so it can't be characterized as circumventing
congressional authority over the debt limit. Rather, it delays when the debt limit is reached.
* This preserves congressional authority over the debt limit in a way that reliance on the 14th
Amendment would not. It also avoids the protracted court battles the 14th Amendment
option would entail and avoids another confrontation with the Roberts Court.
* Any court challenge is likely to be quickly dismissed since (1) authority to mint the coin is
firmly rooted in law that itself is grounded in the expressed constitutional powers of
Congress, (2) Treasury has routinely exercised this authority since the birth of the republic,
and (3) the accounting treatment of the coin is entirely routine.
* Yes, this is an unintended consequence of the platinum coin bill, but how many other
pieces of legislation have had unintended consequences? Most, I'd guess.
Philip N. Diehl 35th Director United States Mint en.wikipedia.org/wiki/Philip_N._Diehl
----------------------------
Read more: http://www.businessinsider.com/mint-the-coin-former-mint-director-philip-
diehl-explains-why-the-trillion-dollar-coin-law-would-work-2013-1#ixzz2HOUhPBrx
idea,totto we are not in kansas anymore.
The Former US Mint Director Behind The Controversial Law Explains Why A Platinum Coin
Could Avoid A Major Crisis
Joe Weisenthal | Jan. 8, 2013, 4:22 AM | 3,542 | 29
inShare
10
More
Science ChannelThe #MintTheCoin movement rolls on!
Remember, there are a lot of people arguing that an alternative to the debt ceiling crisis is
for the Treasury to create a $1 trillion dollar coin made out of platinum, and then ship it to
the Treasury's bank account at the Fed.
Yesterday Paul Krugman came out in favor of this, while on the other hand, a US
Congressman came out in opposition to it.
Last night we got an email from Phillip Diehl, a former Mint director, who also helped craft
the legislation allowing coin minting (he also sent it to Cullen Roche).
Here's his full email, in which he notes that A) Yes it's legal, and B) it would have no adverse
economic effects.
----------------------------------------------------------------
I'm the former Mint director and Treasury chief of staff who, with Rep. Mike Castle, wrote the
platinum coin law and produced the coin authorized by the law. Therefore, I'm in a unique
position to address some confusion I've seen in the media about the $1 trillion platinum coin
proposal.
* In minting the platinum coin, the Treasury Secretary would be exercising authority which
Congress has granted routinely for more than 220 years. The Secretary's authority is derived
from an Act of Congress (in fact, a GOP Congress) under power expressly granted to
Congress in the Constitution (Article 1, Section 8).
* What is unusual about the law (Sec. 5112 of title 31, United States Code) is that it gives the
Secretary complete discretion regarding all specifications of the coin, including
denominations.
* Moreover, the accounting treatment of the coin is identical to the treatment of all other
coins. The Mint strikes the coin, ships it to the Fed, books $1 trillion, and transfers $1 trillion
to the treasury's general fund where it is available to finance government operations just like
with proceeds of bond sales or additional tax revenues. The same applies for a quarter
dollar.
* Once the debt limit is raised, the Fed ships the coin back to the Mint, the accounting
treatment is reversed, and the coin is melted. The coin would never be "issued" or circulated
and bonds would not be needed to back the coin.
* There are no negative macroeconomic effects. This works just like additional tax revenue
or borrowing under a higher debt limit. In fact, when the debt limit is raised, Treasury would
sell more bonds, the $1 trillion dollars would be taken off the books, and the coin would be
melted.
* This does not raise the debt limit so it can't be characterized as circumventing
congressional authority over the debt limit. Rather, it delays when the debt limit is reached.
* This preserves congressional authority over the debt limit in a way that reliance on the 14th
Amendment would not. It also avoids the protracted court battles the 14th Amendment
option would entail and avoids another confrontation with the Roberts Court.
* Any court challenge is likely to be quickly dismissed since (1) authority to mint the coin is
firmly rooted in law that itself is grounded in the expressed constitutional powers of
Congress, (2) Treasury has routinely exercised this authority since the birth of the republic,
and (3) the accounting treatment of the coin is entirely routine.
* Yes, this is an unintended consequence of the platinum coin bill, but how many other
pieces of legislation have had unintended consequences? Most, I'd guess.
Philip N. Diehl 35th Director United States Mint en.wikipedia.org/wiki/Philip_N._Diehl
----------------------------
Read more: http://www.businessinsider.com/mint-the-coin-former-mint-director-philip-
diehl-explains-why-the-trillion-dollar-coin-law-would-work-2013-1#ixzz2HOUhPBrx
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