Holy Shi… Look who might have solved the phoney debt ceiling “crisis”

Filed in National by on January 4, 2013

Michael Castle: Unsuspecting godfather of the $1 trillion coin solution

Posted by Dylan Matthews on January 4, 2013 at 1:05 pm

The weirdest solution to the impending debt-ceiling crisis is finally having its day in the sun.

Rep. Mike Castle (R-Del.), the unlikely father of the platinum coin option (Susan Biddle/TWP)

As Brad Plumer explained last month, the Treasury secretary has the authority to mint platinum coins of any quantity and denomination. So, hypothetically, Tim Geithner could mint a $2 trillion coin, deposit it in the Treasury’s account at the Federal Reserve, and use that money in lieu of additional borrowing. Suddenly, no one needs to worry if Congress refuses to raise the debt ceiling.

The platinum-coin idea has now been endorsed by the likes of Paul Krugman and Rep. Jerrold Nadler (D-NY). It’s also the subject of a White House petition with 1,730 signatories. The hashtag #mintthecoin, spread by supporters like Business Insider’s Joe Wiesenthal, is catching on, at least among the financial press.

But wait — how did the Treasury secretary ever get this authority? Who would have thought to give it to him, and why?

The story starts in 1995, when Rep. Michael Castle, then the Republican at-large representative for Delaware, took over as head of the House Financial Services subcommittee on domestic and international monetary policy. Issues of coinage were part of that subcommittee’s jurisdiction, and so Castle — who tells me that he personally has never collected coins or previously hadn’t had much interest in coin issues — started working with coin collectors and others to draft legislation on the topic.

Castle’s biggest accomplishment in the role was the 50-state quarter program, which involved issuing 50 differently designed quarters in the order the states were admitted to the Union (it isn’t a coincidence that Castle’s home state of Delaware was the first admitted). But he also drafted a bill, the Commemorative Coin Authorization and Reform Act of 1995, that included this provision:

Notwithstanding any other provision of law, the Secretary of the Treasury may mint and issue platinum coins in such quantity and of such variety as the Secretary determines to be appropriate.

The logic, Castle tells me, was to enable the Treasury to put out collectable platinum coins of a variety of sizes. At the time, collectors had complained that the smallest platinum coins available were too expensive, a problem the bill was supposed to enable the Treasury to correct. “The investment community wanted flexibility to make fractional coins,” Castle explains. “People couldn’t afford the $600 investment, so they wanted the flexibility to put in smaller coinage so that people could collect them.”

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Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.

Comments (2)

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  1. Jason330 says:

    It looks like the Castle gambit may be moot anyway. The Dems are talking tough:

    Echoing President Obama’s refusal to negotiate on the debt limit, Sen. Chuck Schumer (D-NY) warned Republicans on Friday that Democrats have no intention of giving in to any of their demands in exchange for lifting the nation’s borrowing limit to pay its bills.

    “I think that risking government shutdown, risking not raising the debt ceiling, is playing with fire,” Schumer told reporters in the Capitol, in response to a question from TPM. “Anyone who wants to come and negotiate, and say ‘we will raise the debt ceiling only if you do A, B, C’ will not have a negotiating partner. And if then they don’t want to raise the debt ceiling, it’ll be on their shoulders. I would bet that they would not go forward with that.”

    It is a shame in a way. If Captain Quarters accidentally saved the day it would have made a fine coda to his Don Knotts-esque career in public service.

  2. Truth Teller says:

    When taking the oath of office the President swears to defend the Nation from all enemies both Foreign and Domestic. It appears that some members of congress have become Domestic enemies of the country by threatening to damage the full faith and credit of this nation and should be treated as the UN American traitors that they have become

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