So the treasury department has said they will not create a commemorative coin in the amount of $1 Trillion this weekend. The Atlantic had a great piece talking about the plan, and explaining that we were in fact living out something akin to an episode of the Simpsons. Click through the link to read more about the platinum coin. Thankfully this makes it so that our congress can go back to sane discussions of how to fix the debt ceiling. I was a little worried that Democrats might lord the $1 Trillion coin over the debates as if that might be productive, but the Treasury and Obama have done the right thing and avoided strong hand tactics. The debt ceiling itself is almost as silly as a platinum commemorative coin for such a crazy amount though.
Why the Debt Ceiling makes no sense:
Our government has a budget. Whether or not you approve of the amount, or how it is spent, is irrelevant to this discussion. The people who sign off on this budget are in congress. If said budget causes the national debt to threaten the artificial, self-imposed debt ceiling, then we go back to congress to ask politely, “Will you please raise the debt ceiling so that we can spend the money on the budget that you said was a okay?” If congress had a problem with the amount of spending, and the debt that would be needed to fund said spending, then they should have fixed it when they approved the budget in the first place.
That means that our current position is this. When a democratic president asks for the debt ceiling to be raised the republicans moan and threaten to stop it from happening (see right now, or last year if you need examples). Also, if a republican president asks for the debt ceiling to be raised the democrats moan and threaten to stop it from happening (see 2006 when Bush wanted the ceiling raised). In fact, Obama and other democratic leaders voted against raising the ceiling when Bush was president less than a decade ago.
The current situation is crazy. The United States defaulting on their debt would not be a good precedent to set. I think that increasing our debt at the rate we currently are is a bad idea, but not paying our current outstanding debt is not the way to solve the problem. At least we didn’t try a trillion dollar coin.