No, a $1 Trillion Platinum Coin is Not Legal

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For some reason, the possibility of evading the debt ceiling by minting a $1 trillion platinum coin is getting some blogospheric love again. This is based on a 2000 revision to the U.S. statute on money and finance that reads:

The Secretary may mint and issue bullion 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.

Read literally, this places no limitations on the Treasury Secretary’s authority to mint platinum coins. If Tim Geithner wants to mint a $1 trillion coin and deposit it at the Fed, he can do it.

I would just like to point out, once again, that this is ridiculous. During the very short floor debate on this amendment it was repeatedly referred to as a “technical correction,” and that’s obviously what was intended. Oklahoma Rep. Frank Lucas described it this way:

Also contained in the bill is a clarifying section inserting the word ‘‘platinum’’ inadvertently dropped when Congress authorized production of platinum and platinum bullion coins a few years ago….This is a small bill, but important to the mint and important to coin collectors. It has no cost implications whatsoever.

No particular restrictions were placed on the design or issuance of platinum coins, but this paragraph was plainly intended to apply to bullion and commemorative issues for coin collectors. That’s all.

There is, apparently, a widespread belief that courts will uphold a literal, hypertechnical reading of legislative language regardless of its obvious intent, but I’m quite certain this isn’t true. Courts are expected to rule based on the most sensible interpretation of a law, not its most tortured possible construction. I don’t think there’s even a remote chance that any court in the country would uphold a Treasury reading of this law that used it as a pretense for minting a $1 trillion coin.

I am, obviously, not a lawyer. So if someone with actual legal training in the appropriate area of the law says I’m wrong, then I guess I’m wrong. But I’m not much afraid of that happening. This whole notion is the kind of thing that Herman Cain would come up with. It’s time to stop treating it seriously.

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