Last weeks deal in Congress to raise the debt ceiling through early December may offer another few weeks of partisan wrangling, but it wont solve the deeper problems of funding the government. Such is the sorry state of Americas hand-to-mouth finances that White House officials have launched apocalyptic warnings about imminent financial collapse, along with hallowed invocations to preserve the full faith and credit of U.S. Treasury debt.
The White House Council of Economic Advisers, run by Cecilia Rouse, said: If the United States were to default, tens of millionsincluding families with children, retirees, and veteranswould quickly, even overnight in some cases, face the prospect of losing the regular Federal payments that help them to make ends meet. Defense Secretary Lloyd Austin declared: If the United States defaults, it would undermine the economic strength on which our national security rests.
With so much at stake, no wonder the White House was reported to be seriously considering a plan by which the Treasury would mint a $1 trillion platinum coin, deposit it at the Federal Reserve, and then continue paying bills as normal.