Skip to main content

The debt ceiling and the platinum coin

There have been many arguments made on the blogs that the platinum coin is a legal way to avoid default on the debt if Republicans in the House refuse to raise the debt ceiling. I'm largely sympathetic to those arguments, and to those who say it's a crazy idea. It kind of is. But it's not more crazy than the idea that the Republicans shouldn't raise the debt ceiling simply for the sake of it without getting something in return. So it makes some sense to want to respond to a crazy tactic with a crazy tactic of your own.

But Ezra Klein makes the case that the way to solve the problem isn't with your own crazy tactic (the platinum coin):

The argument against minting the platinum coin is simply this: It makes it harder to solve the actual problem facing our country. That problem is not the debt ceiling, per se, though it manifests itself most dangerously through the debt ceiling. It’s a Republican Party that has grown extreme enough to persuade itself that stratagems like threatening default are reasonable. It’s that our two-party political system breaks down when one of the two parties comes unmoored. Minting the coin doesn’t so much solve that problem as surrender to it.

I'm with Ezra here. The best way to address the reckless behavior of Republicans is to just refuse to negotiate with them and tell them unequivocally that we will let them not raise the debt ceiling and force us to default. The problem is that we don't know how they will react to that. Some of them seem crazy enough to want to default and then blame the consequences on Obama and "runaway spending". And the problem with that is it's an easier sell to the public than explaining why Republicans are being crazy in this situation. But Ezra thinks Republicans will cave:

The fact is that after losing the 2012 election, and with the business community mobilizing against the threat of default, the leadership of the Republican Party is going to have a terrible time holding its members together on the debt ceiling. Even more problematic, from the perspective of conservative hard-liners, is that many of the GOP’s leaders are themselves scared of the debt ceiling and looking for a way out. There is a very good chance that this fight can be won and these tactics discredited.

I suppose this is the case since Ezra has sources much better than my non-existant ones. And people like John Boehner do seem to have non-crazy tendencies. So I certainly think it's possible Republicans would end up breaking if Obama is steadfast in his willingness to not negotiate. Ezra concludes:

There are two ways to truly resolve the debt-ceiling standoff. One is that the Republican Party needs to break, proving to itself and to the country that the adults remain in charge. The other is that America is pushed into default and voters — and the world — reckon with what we’ve become, and what needs to be done about it. Sadly, there’s no easy way out. It’s heads America wins, tails America loses.

He's convinced me that this is the best path. I obviously hope Republican break and just raise the debt ceiling. But if they aren't willing to do so I think defaulting and letting people see the consequences of Republicans' actions might help push the party to a breaking point in which they stop acting like a crazy party and start governing like adults. It's possible they could stick to their guns after a default and try to blame it on Obama. But I think it's a risk worth taking because this will not be the last confrontation between House Republicans and Obama. If he takes a hard stance here it could get him better results in other negotiations. And hopefully the people who feel the negative consequences of default will think twice before voting for a party that allows it to happen.