One day after the U.S. government exceeded the debt ceiling, you couldn't find a single White House staffer talking about default on U.S. debt instruments. Instead comes word today that President Obama does not intend to abide by the legally established limit for U.S. government debt, which was increased by Congress in 2011 to $16.394 trillion dollars. In multiple major media outlets, a news story was circulating that President Obama has already decided that if Congress does not agree to his demands for an increase in the U.S. debt ceiling, that he will go ahead and have "debt coinage" minted from platinum to secure U.S. debt, and simply erase the U.S. debt, at least for accounting purposes. A petition has already been created on the White House web site to require a direct response to the "platinum option" from the President. Is it no wonder that President Obama has not been speaking of either the debt ceiling or spending cuts? The announcement sent the price of platinum down slightly, down $2.00 at $1,559 per ounce, and dragging gold down with it $7.00, which ended the day at $1,656.80 an ounce. It seemed that the announcement out of the White House spooked metals investors, who feared that the foray into the metals markets by the U.S. government would flood markets worldwide with platinum, a far different scenario than if the U.S. was actually going to move to platinum as a new standard to base U.S. currency on. The dollar was mixed today against foreign currencies, closing higher against the British pound, the Japanese yen, and the Chinese yuan, while falling against the Euro, and the Mexican peso.
Even though investors are not calling in the U.S. debt, that they currently hold, in numbers large enough to worry U.S. Treasury Secretary Timothy Geitner, is it really legal for President Obama to start minting new U.S. coins? President Obama's advisers seem to think so. The plan is to have platinum coins with a value of $1 trillion apiece to be offered as collateral for additional government borrowing, all used to support Obama's thirst for ever more and more spending. The White House is claiming that the 14th Amendment to the U.S. Constitution gives the President the authority to spend as much as he wants without approval from Congress, and to issue coins, by way of the U.S. Treasury. It seems a truly incredible stretch that a constitutional amendment passed by Congress just three years after the U.S. Civil War had ended, as civil rights legislation that fully emancipated the slave population in the U.S., would be used by President Obama to justify his end run around Congress, and the U.S. debt ceiling, but here his team is today, doing exactly that.
One could say that President Obama is simply using his executive authority to shore up the credit rating of the U.S., by adhering to the provisions within the U.S. Constitution. However, there is something standing in the way of newly discovered executive powers that Obama would like to grant to himself: Article 1, Section 8 of the same constitution. This very important section of the constitution states, "The Congress shall have power...To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures". The 14th Amendment does not mention coining money, setting it's value, or anything else that mentions a repeal of the congressional authority to coin money; nor does it say that the President was conveyed the power to do so in addition to Congress.
President Obama has no problems testing the limits of the U.S. Constitution. The President has stated publicly that he believes the constitution is a "living document". That is, to say, that the words written by the founding fathers do not really have the same definitions all the time; that those definitions can change over time, as well as the interpretation of the constitution by the President. While there is a small amount of truth to what Obama is saying, it is up to the U.S. Supreme Court to define the words in the constitution when they are challenged. If President Obama believes that the 14th Amendment grants him the authority to coin money, then he should ask for a legal ruling from the Supreme Court, instead of automatically assuming that he already holds that power. Legal doctrines, long established and agreed to over time, are developed by challenging existing laws within the legal framework of American courts; not by fiat from the Oval Office. The American public, and the nations who hold our debt, deserve to have a chief executive that respects the U.S. Constitution as it is written; not one who will seek an unconstitutional means to continue to acquire more debt.
This "trial balloon" by the Obama administration was meant to serve as a warning that Congress should not dare to mess with Obama's agenda, and that President Obama didn't have to do what Congress wants, in regards to reducing federal spending. Instead of doing that, these trivial political games with the nation's debt rating by Obama unsettle investors, rattle markets, and damage America's credibility. These aren't the acts of a confident U.S. President; they are the acts of a President who knows that time has run out on saving the house of cards built by a mountain of debt. Obama is desperate because he knows that House Republicans are not going to raise the debt ceiling without spending cuts. Is Obama willing to risk violating the U.S. Constitution, by ignoring restrictions against the coining of money by the President, all in the name of spending without end? Well, if the constitution is a living thing, like a chameleon, I guess that the President believes that he won't be doing any such thing. He'll just be operating from a "different interpretation" of the constitution than the one that Republicans use.
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