WASHINGTON -- Much political commentary has, in recent days, revolved around a most unusual question: Should the Treasury Department mint a trillion-dollar platinum coin that can be used to pay off our debts in the event House Republicans refuse to raise the debt ceiling?
The short answer is: No, it shouldn't. The long answer is also: No, it shouldn't.
The debt ceiling now is a time bomb beneath the U.S. economy. If the White House can render it harmless by encasing it in an indestructible tomb of platinum, then perhaps our problems are solved. And the arguments in favor of the coin are logically and legally sound. A straightforward reading of the law suggests that, whatever Congress's intent, the Treasury Department clearly is empowered to mint coins of unlimited value. A coin of unlimited value would allow us to pay off our debts. President Barack Obama could even, as Bloomberg View's Josh Barro has suggested, offer to sign a bill eliminating both the debt ceiling and the Treasury Department's ability to mint coins of any value.
And so, as Paul Krugman argues, we are "faced with a choice between two alternatives: one that's silly but benign" -- the coin -- "the other that's equally silly but both vile and disastrous" -- the debt ceiling. "The decision should be obvious."
But there's nothing benign about the platinum coin. It is a breakdown in the American system of governance, a symbol that we have become a banana republic. And perhaps we have. But the platinum coin is not the first cousin of cleanly raising the debt ceiling. It is the first cousin of defaulting on our debts.
As with true default, it proves to the financial markets that we no longer can be trusted to manage our economic affairs predictably and rationally. It's evidence that American politics has transitioned from dysfunctional to broken and that all manner of once-ludicrous outcomes have muscled their way into the realm of possibility. As with default, it will mean our borrowing costs rise and financial markets gradually lose trust in our system, though perhaps not with the disruptive panic that default would bring.
Sadly, none of that actually is a reasonable argument against the platinum coin. The fact that we wish we were not a banana republic witnessing a full-blown meltdown of our treasured system of governance does not mean we are not, in fact, a banana republic witnessing a full-blown meltdown of our treasured system of governance.
The argument against minting the platinum coin simply is 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.
The platinum coin is an attempt to delay a reckoning that we unfortunately need to have. It takes a debate that will properly focus on the GOP's reckless threat to force the United States into default and refocuses it on a seemingly absurd power grab by the executive branch. It is of no solace that many of the intuitive arguments against the platinum coin can be calmly rebutted. It's the wrong debate to be having.
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.