The U.S. Treasury yesterday dashed the hopes and dreams of many in the blogosphere when it announced that neither it nor the Federal Reserve saw the idea of a $1 trillion platinum coin as a realistic alternative to raising the debt ceiling.
Actually, the Treasury statement was much stronger and more definitive than that. Treasury spokesperson Anthony Coley said "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 ceiling." In other words, neither the Treasury, which would produce the coin, nor the Fed, which would exchange the coin for cash, are wiling to enter into the transaction. That means that, even if minting and selling the coin is legal, neither the buyer nor the seller are interested in doing the deal. That effectively eliminates the trillion dollar coin option from the debt ceiling debate.
Two reports over the past two days by the most credible organizations that do budget analysis prove that, no matter what they say publicly, congressional Republicans don't actually give a damn about reducing the federal deficit or lower government spending.
Each report shows that, for the GOP, the deficit not only comes in no better than second every time, it's not really a serious consideration.
The first report, produced by the excellent analysts at the U.S. Government Accountability Office (GAO) and released on Monday, shows that last August's GOP-induced fight over raising the debt ceiling increased federal borrowing costs, that is, spending on interest, by a minimum of $1.3 billion. Here's the money quote:
There are two money quotes in a column by Betsey Stevenson and Justin Wolfers on Bloomberg about the extreme debt ceiling threat House Speaker John Boehner (R-OH) unilaterally decided to issue a few weeks (ht Mark Thoma):
There's not much I need to say to introduce my column from today's Roll Call other than that I really felt I had no choice but to write this as directly as I did. A special shout out to Roll Call for not blinking even once when I told them what I wanted to write this week
The Irresponsibility of Speaker John Boehner
May 22, 2012, Midnight
Like most federal budget watchers, I assumed that the extremely negative political reaction to the federal government shutdowns in 1995 and 1996 meant that tactic wasn’t likely to be threatened again, let alone actually used. That changed last year when a shutdown became the favored approach for many on Capitol Hill.