The platinum coin is killed as America careens toward default

The platinum coin is dead, long live the debt ceiling.

On Saturday evening, the Washington Post's Ezra Klein dropped a bombshell: The platinum coin gambit – the plan to circumvent the American debt ceiling by minting a trillion-dollar coin and depositing it in the Federal Reserve – is dead. Klein writes:

That’s the bottom line of the statement that Anthony Coley, a spokesman for the Treasury Department, gave me today. “Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” he said.

The Treasury's take on the law is one thing; but the Federal Reserve, as a quasi-independent body, is really what's put the kibosh on the whole plan. If it doesn't believe that using a platinum coin to circumvent the debt limit would be legal, that's it. The lynchpin of the plan was that the Treasury, after using powers granted to it through a loophole in a law intended to let it mint commemorative coins for collectors, would be able to deposit the coin in its account in the Fed. If the Fed won't take it, the plan's bust.

Joe Weisenthal, the most consistent advocate of the platinum coin, points out that it's hard to work out what point of law the Fed was actually trying to apply here:

It seems odd that the Fed would decide that there's some legal tender that it will recognize, and some legal tender that it wouldn't recognize.

Paul Krugman, who became a high-profile advocate of minting the coin last week, asks what the administration's plan is now, but also somewhat unfairly places the blame on Obama. Given the White House's comment to Buzzfeed focuses on the Fed, it seems like they weren't exactly behind the move to pre-emptively remove the bargaining chip from the table.

Regardless, the administration's position now is clear. The debt ceiling must be lifted, and they will offer no "concessions" to do so. With the platinum coin out of the equation – and with the so-called "constitutional option", where the President cites the 14th amendment's command that the validity of the public debt "shall not be questioned" and ignores the debt ceiling, ruled out by the White House last month – the Republicans can be under no illusions that if they fail to concede, America will definitely have a messy government shutdown, and will likely enter technical default on its public debt. The only question that they have to answer is whether they have an ounce of rationality left, or if they'll take the whole system down, themselves included.

Past experience suggests that the latter is worryingly possible. For one thing, conservative economists like John Cochrane have been minimising the effect of hitting the ceiling. Cochrane casts doubt on possibility of default by rightly pointing out that the Treasury has enough income to make debt repayments even if the ceiling is hit. But by ignoring the practical aspects of hitting the ceiling, he bypasses an important point. The treasury pays its bills with a vastly complex, automated system. It is not clear it has the technology to "prioritise" debt repayments, nor is it clear that to do so would be legal.

And even worse, those GOP members who do understand the likelihood of a default aren't too concerned. Politico's Jim Vandehei, Mike Allen and Jake Sherman write:

GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts he has repeatedly said he opposes…

“For too long, the pitch was, we’ll deal with it next time,” said Rep. Jason Chaffetz, a conservative from Utah. He said GOP lawmakers are prepared to shut things down or even default if Obama doesn’t bend on spending. “No one wants to default, but we are not going to continue to give the president a limitless credit card.”

If the US did default on its debt – even just by paying a coupon a day late – the international knock-on effects would be massive, and unprecedented. Now that every option for preventing that has been taken off the table save for negotiating with the most radical congress ever, the financial community may start to take note.

Photograph: Wikimedia Commons

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

A girl in an Ariana Grande top. Photo: Getty
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The joy of teenage girls is the heart of pop - we can't let the Manchester attack change that

What happened in Manchester feels horribly new because it targeted young girls in one of the places where young girls can be themselves to the fullest.

This morning, while the radio news talked of nothing but Manchester, my 10-year-old daughter asked me if it was still safe to go and see Adele at Wembley Stadium in July. The ticket was her big Christmas present and the printout of the order confirmation has been blu-tacked to her wall for months. She’s as excited about it as she has been excited about any event in her life, but now she’s also scared. Could this have happened to her when she saw Ed Sheeran the other week? Could it happen to her at Wembley, or anywhere else? I am sure that there are similar conversations happening across the country. Some long-awaited birthday treats will be cancelled. Red letter days erased from the calendar. Parents can allay their children’s fears (and their own), and decide to go ahead despite them, but they cannot pretend the fear isn’t there, suddenly, where it wasn’t before.

When I first started going to gigs in 1989, I never worried about not coming back. I fretted about missing the last train back to the suburbs, or not having a good view of the stage. You can feel unsafe at a gig, especially if you’re a girl in a moshpit where boys can’t keep their hands to themselves, but usually not life-or-death unsafe. Fatal crowd disasters such as Roskilde in 2000 and Cincinnati in 1979 have spurred the concert industry into making venues as safe as possible. There are sensible, practical measures you can take to avoid crushes.

Terrorism at music venues, however, is relatively new and hard to deal with. This is why the Bataclan massacre in November 2015 had such an enormous impact. There is no hierarchy of tragedy — a death due to terrorism is a death due to terrorism, whether it’s in a concert hall in Paris or a mosque in Iraq — but some tragedies are so close to home that they change the way you think. The first show I attended after the Bataclan (New Order in Brixton) was charged with a strange electricity, as defiance defeated anxiety and the rational mind silenced this new kind of fear. A few weeks later I saw Savages in Paris and it was even more intense. The venue was small and subterranean. I have never paid such close attention to the location of the exits.

Everyone has tried to reassert normality after an atrocity has felt like this: the first time they took the tube after 7/7, or went to work in New York in September 2001, or danced in Miami after the Pulse shootings, or stayed out late in Istanbul after last New Year’s Eve. In some countries the fear is never allowed to fade. What happened in Manchester feels horribly new because it targeted young girls in one of the places where young girls can be themselves to the fullest.

The joy of teenage girls is the heart of pop, and it is often misunderstood, if not patronised and dismissed. Their excitement doesn’t derive purely from fancying the star on the stage — when I saw Taylor Swift or Miley Cyrus (at the MEN arena in fact), the screaming was as intense as it is for any boy band. In fact, it’s not entirely to do with what’s happening on the stage at all. As a critic in my 40s who’s been to hundreds of shows, I may be bothered by an incoherent concept or a mid-set lull, but nobody around me is solely interested in the performance. Even shows that I’ve found disappointing have an ecstatic carnival atmosphere because a pop show is a catalyst for a great night out — one that may have been anticipated for months. The pop star is a vessel for a mess of inchoate desires and thrilling, confusing sensations (Bowie knew this) so the girls aren’t just screaming for the star; they’re screaming for themselves and for each other. They are celebrating music, of course, but also youth, friendship, the ineffable glee of the moment, life at its most unquenchable. It’s a rite of passage that should never be contaminated by even an inkling of dread.

First and foremost, I feel compassion for the victims and their friends and families. Then for the survivors, including Ariana Grande, who will be traumatised for a long time to come. But beyond those immediately affected, this atrocity will cast a long shadow across the youths of countless pop fans. Will something like this happen again? Perhaps not. Statistically, the possibility of an attack at one particular show is minuscule. Over time, the fear will subside, because it always does. My daughter is absolutely still going to see Adele, and she’ll have a whale of a time. But the knowledge that it could happen at all means a loss of innocence.

Dorian Lynskey is a journalist living in London. He blogs at:

33RevolutionsPerMinute.wordpress.com

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