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Bloomberg said yesterday, "Democrats and Republicans must decide in the next day or two how far to take their deadlock over the US debt limit, which is pushing the country perilously close to a catastrophic default."
Some politicians are floating the idea of minting a $1 trillion coin to flood the market with cash.
They say, due to a quirky 20-year-old law, they can do it as long as the coin is made of pure platinum---thus bypassing Congress' need to raise the debt ceiling---which the Republicans have been blocking.
Here's what "the coin" is all about.
Be informed, not misled.
Some politicians think they've found a silver bullet for the impasse over the debt limit: actual platinum minted $1 trillion coin.
"Mint the coin," they say, "and flood the treasury with cash...and drive the Republicans crazy."
Bloomberg strategists note that Wall Street strategists are warning there is growing danger for financial markets as the clock ticks closer to October 18, the date which Treasury Secretary Janet Yellen expects the country to reach its limit on sovereign debt.
How is minting a coin possible when the treasury secretary can't even print money to pay public debts?
It's because a quirky law from more than 20 years ago seems to allow the administration to mint coins of any denomination without congressional approval as long as they're platinum.
Specifically, the law says the treasury secretary "may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may subscribe from time to time."
The law was intended to accommodate coin collectors but appears to be something the Biden administration could actually do.
Will they do it?
Willamette University law professor Rohan Grey says, "The fact that (the coin) represents an accounting gimmick is a source of its strength, rather than a weakness."
Grey wrote in the Kentucky Law Journal, "The idea of 'fighting an accounting problem with an accounting solution' is entirely coherent...the debt ceiling itself can be viewed as one big, poorly designed accounting gimmick."
President Obama showed some interest in the idea but didn't use it.
An editorial in the Washington Post seems to be advocating the idea---at least tongue in cheek. They note that the majority of Democrats in Congress oppose the idea, but both Reps. Jerrold Nadler (D-NY) and Rashida Tlaib (D-Mich.) have advocated for the coin.
Yellen told CNBC she thought it was a bad idea.
Another alternative under consideration is for President Biden to simply keep borrowing money and paying the country's bills even if the government is not supposed to take on more debt, the Washington Post has reported.
Some legal scholars claim the idea of a debt ceiling conflicts with the 14th Amendment of the Constitution. In other words, it is simply unconstitutional for the United States to default on its debt. However, it is also unconstitutional for the president to defy a law passed by Congress.
If things continue as they are today, it appears the president has two choices. Both are unconstitutional, so apparently, they are looking for the "least unconstitutional choice."
This entire discussion is being defined by some as a Ponzi scheme.
A prophetic look at our current national financial crises.
Bernie Madoff systematically cheated investors out of more than $65 billion by using new investors' money to pay profits to earlier investors. Everything ran smoothly, producing 12 to 20% returns for the early ones---provided new investors and new money continued to flow.
We all know the tragic end of Bernie. Sentenced to 150 years in prison, he lived out his life eating pizza and sleeping on the lower bunk in the cell. He would die in prison.
More than 80 years before Bernie Madoff, Charles Ponzi held the record as the world's greatest swindler in American history.
These schemes are known as the Ponzi Scheme.
In 1935, during the presidency of FDR, Social Security was conceived and passed into law, as a blessing that would rid our nation of all the evils associated with "old age."
I am not opposing the idea, rather pointing out the deadly progression.
Today Social Security and its related commitments are operating exactly like Bernie Madoff and Charles Ponzi and will soon be insolvent.
The next generation is paying for this generation's Social Security, and it's only a matter of time until that bill will become past due.
We are on the verge of another round of inflation with current policies. Inflation played a part in the fall of the Roman Empire.
In "The Rise and Fall of the Roman Empire" we read:
"Rome wasn't built in a day, nor was its money destroyed overnight. In 64 AD, in Nero's reign, the aureus was reduced by 10% of its weight. Thereafter, whenever Romans needed more money to finance their wars, their public improvements, their social welfare services and circuses, and their trade deficits, they reduced the metal content of the coins [they called it coin clipping]. By the time their last emperor was deposed in 476, the silver denarius contained only 0.02% silver."
Do we even know today what a "trillion dollars" is? It's a million million; a thousand billion.
Did you know that the Bible has predicted the future that is our present-day reality?
James, the half-brother of Jesus (Galatians 1:19) wrote in James 5:1-6 words that I believe define our times---times that are conditioning us for the end times---a one-world government, one-world economic system, and a one-world religion.
James (5:1-6) wrote:
Come now, you rich, weep and howl for your miseries that are coming upon you! Your riches are corrupted, and your garments are moth-eaten. Your gold and silver are corroded, and their corrosion will be a witness against you and will eat your flesh like fire. You have heaped up treasure in the last days. Indeed the wages of the laborers who mowed your fields, which you kept back by fraud, cry out; and the cries of the reapers have reached the ears of the Lord of Sabaoth. You have lived on the earth in pleasure and luxury; you have fattened your hearts as in a day of slaughter. You have condemned, you have murdered the just; he does not resist you.
This is direct. James gives two reasons for his condemnation. First, he considers the sins of the wicked wealthy people to be especially grievous because they are being committed "in the last days."
Secondly, he spoke directly to the wicked wealthy because of their self-centered use of their wealth. Nothing mattered but themselves.
Pastor John MacArthur wrote this concerning these verses: "James sharply rebuked them for hoarding their wealth without regard for God's timetable, the flow of redemptive history, or the reality of eternity. How utterly unthinkable to amass and hoard wealth as the day of judgment draws near."
The Lord is not telling us that to have wealth is evil. He is telling us to be responsible and understand the times in which we live---and use it wisely. And place our hope in Him.
Jeremiah wrote in Lamentations: "This I recall to my mind, Therefore I have hope. Through the Lord's mercies we are not consumed, Because His compassions fail not. They are new every morning; Great is thy faithfulness" (Lam. 3:21-23).
Be Informed. Be Discerning. Be Vigilant. Be Engaged. Be Prayerful.