In Your Pocket
This is what everyone, and I mean everyone, needs. We need a “magic coin”, they could be of any value. By simply having this coin in your pocket all your debts would be paid. You could have anything you wanted, anything that money could buy, because, you have a “magic coin”. It wouldn’t require a “sack” of coins, or even a coin purse. A single “magic coin” in your pocket would more than solve financial problems – it would make you rich almost beyond measure – for life.
You can hear the “infomercial” now, can’t you? I mean, this would put the “Pocket Hose” and “Prevagen” (the over-the-counter memory drug – like jellyfish!!) to shame. Get your own “magic coin” and your life will be – different.
You may be thinking, this whole topic is just a “setup” for some long-winded economic argument, the beginning of a lecture, like talking about “widgets” or “the two boys with stones”. And economically speaking some of my more practical friends might suggest the negative economic impact of people having “magic coins”. Inflation would skyrocket, ultimately rising so much that the “magic coins” would be devalued to “regular coins”. So here’s the trick: everyone can’t have a “magic coin”. Just me — or just you. Nah, just me.
31 U.S. Code § 5112
The US Code is the complied laws of the United States of America. While the Constitution outlines the structure of government and the rights of citizens, the US Code fills in the details of how it all works. 31 US Code § 5112 is pretty dull stuff. It describes the size and content of coinage: how big is a one-dollar coin (1.043 inches in diameter) what it’s made of, and where it can be minted, for example. But buried deep in the code, way down in item “k” is the following paragraph:
(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.
It’s written right there, in the law – “The Secretary may mint and issue platinum bullion coins…with such denominations…as the Secretary, in the Secretary’s discretion, may prescribe…”.
Way down in the middle of a law about what percentage of what metal goes into a quarter and such, is the formula for – wait for it – the magic coin!!
Spending Money
The United States Congress does “funny” things. First of all, when they pass a law to do something, they also have to pass another law to pay for that something. And both sides of the Congress, the House and the Senate, have to agree to both of those laws (and the President) for that action to happen.
Congress, like most organizations, often (not always) passes a budget. That budget states how much they are going to spend in the next fiscal year, and it’s thousands of pages long. So when they pass the budget, they allow for all of the “normal” activities of the government to be paid for the next year. And some other things, (think billion dollar aircraft carriers and the like), are passed separately as well. When it’s all said and done, Congress spends a great deal of its time determining how much money the United States is going to spend.
Paying Bills
But once the laws and the budget are passed, Congress is committed to pay for what they did. At least, they should be. The United States operates in a deficit, living on borrowed money to the tune of $32 Trillion. But Congress put another impediment to spending – they limit how much the United States can go in debt. We are now at nearing the “moment” when the debt is reaching its statutory limit. Remember – Congress spent (and borrowed) all of this money in the first place. Now that the “bill is due”, they are considering NOT paying it.
Defaulting on the debt would have immediate and dramatic economic impact. After all, if you can’t trust the US Government, the US Dollar, US Savings Bonds; then what can you trust? So if Speaker McCarthy and President Biden can’t come to some agreement, we are going to literally go off a cliff.
Desperate Measures
Desperate times call for desperate measures. President Biden does have some “wild ideas” that might dodge a debt default without agreeing to a deal with McCarthy. I wrote about one of those, invoking the Fourteenth Amendment (the debt of the United States cannot be questioned) a couple of weeks ago. While the Amendment is “black letter law”, it’s possible that the Supreme Court might still overturn a Presidential action. After all, it’s the Court of Thomas, Alito, Gorsuch, Barrett and Kavanaugh; anything can happen.
So there’s another move that the President, through the Secretary of the Treasury, can make. He can order the minting of a “magic coin”. Under 31 U.S. Code § 5112, item k, we know that the Secretary can mint a platinum coin and determine its value. The US Mint can mint a $1 Trillion coin. There’s already a design!!
A couple of $1 Trillion coins means that the US isn’t going over the debt limit. They just become “money in the Treasury”, and so the Department can continue to pay the bills. Now, we all know, that it effectively DOES raise the debt limit – but it’s within the law, good ol’ part ‘k’. Is this inflationary – surely. But it would do less damage to the economy than the US defaulting on the debt.
And it’s fun to think what you could do with one in your own pocket!!
