The Rachel Maddow Show | December 05, 2012
>>> our constitution and our statutes are extremely explicit and specific about the power to print money . this is not surprising, because, well, it's a very important power. and so you cannot print money and i cannot print money , and mitt romney , even though it seems like he used to when he worked at bain capital , he cannot print money . no, only the federal reserve can print paper money and the secretary of the treasury can mint coins. not just any coins, there are a number of restrictions. for example, the width of the dollar coin , ? it has to be .043 inches in diameter. there's one seemingly random but possibly extremely important loophole. making coins from platinum. it turns out that's pretty much the discretion of the secretary of the treasury. uss code 51-12 says the secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such spefgss, designs, varieties, quantities, denominations, and inscriptions as the secretary, in the secretary's discretion, may prescribe from time to time. that's pretty broad. so according to current existing law, and this is actually true, the government could, for instance, strike a coin tomorrow at the united states mint at west point and as long as it was platinum, the secretary of treasury could decree that this new coin was worth $1 trillion. doing so would solve a really big problem that's looming on the horizon. because, theoretically, the secretary of treasury could then take the $1 trillion coin, deposit in its account at the federal reserve , and use the money to write checks to pay our debts, even if congress refuses to raise the debt ceiling. ah, yes, the debt ceiling. do you remember that awful, awful debate last year over raising it? it was an invented crisis that ended with a compromise no one liked and caused the united states credit rating to be downgrsded.
>> the deadline is getting closer and a deal seems far off tonight. aides saying no new congress .
>> a little over 72 hours away from the point where the nation will be unable to pay all its bills and risk default.
>> the public posturing continued into the night last night. but now as congress prepares to work through the weekend and those backroom negotiations continue at a furious pace.
>> despite this bipartisan support for the deal, it's a deal nobody wants to take credit for.
>> reporter: president obama today didn't praise the deal, only expressed relief.
>> all eyes will be on the stock market tomorrow, after the s&p's announcement friday night of the unprecedented downgrade of america's credit rating .
>> stocks plummeted overnight in asia, europe is following suit this morning, as fear dominates wall street . now the focus turns to the fed, and investors are hoping for some good news later today , after suffering the worst day in two years.
>> credit rating agency basically said, we no longer have faith in you, the united states government , because we no longer believe your political system is capable of basic competence. the basic competence necessary to pay your bills. that republican-made, self-inflicted crisis and the resolution to it created this current man-made self-inflicted crisis that we're in right now. one we're lamely calling the fiscal cliff. the way republicans in congress and the president solved the debt ceiling crisis was to build this cliff, that we're now supposedly dangling off of. they inve' we're up against. the debt ceiling fight was a disaster, and now republicans, surprise, want to have that fight again. "the new york times" reports that one idea bouncing around the right side of the aisle is this. the republicans will extend tax cuts for the middle class , and then when they need to raise the debt ceiling, quote, demand deep concessions on medicare and social security as a price to raise the debt ceiling. one republican senator reportedly called the debt ceiling the line in the stand. the odds are pretty close to zero that we mint a $1 trillion coin in order to pay off some of the debt. but there's striking movement in the direction of changing the rules so we don't ever have to fight over this completely unnecessary issue ever again. remember, this is important. the debt ceiling isn't about incurring future debt. it's about the money congress has already duly authorized and appropriated and voted to spend. it's not a fight about whether or not to spend money, it's a fight about whether or not to pay your credit card bill. today, the president basically said, no more. i'm done having this dumb fight. i am not going to do it again.
>> i want to send a very clear message to people here. we are not going to play that game next year. if congress in any way suggests that they're going to tie negotiations to debt ceiling votes, and take us to the brink of default once again, as part of a budget negotiation, which, by the way, we have never done in our history, until we did it last year, i will not play that game. because we've got to break that habit before it starts.
>> republicans have a debt ceiling fake crisis habit and the president says he'll break it. and he's backed up by the treasury secretary and the leader of the democrats in the house.
>> do you agree with alan greenspan , that we ought to just eliminate the debt ceiling?
>> oh, absolutely.
>> you do? will you propose that?
>> well, you know, this is something that only congress can solve. congress put it on itself. we've had 100 years of experience with it. and i think only once, last summer, did people decide to use it to threaten default on the american credit for the first time in history as a tool for political advantage and that's not a tenable strategy.
>> is now the time to eliminate it?
>> it would have been time a long time ago to eliminate it,
>> i don't think the debt ceiling has a place in all of this. i think that we continue the mcconnell rule, which says the president sends it over. if two-thirds of the congress objects, than that is overturned.
>> okay. so the mcconnell rule isn't exactly the super awesome trillion- dollar coin idea that i kind of love, but it's not half bad. the president has the power to raise the debt ceiling in order to pay for the things that congress has already agreed to pay for, and if congress wants to stop it, they need a two-thirds majority to do it. i am generally pretty wary of increases in congressional authority and decreases in overnight, but in the case of the debt ceiling, there's just no argument for it. the money has already been spent. congress has already spent it. it's just a matter of whether or not you pay the bills. and if all else fails, president obama and tim geithner should start deciding whose that is they want to put on the new $1 trillion coin.