Brother, can you spare a trillion-dollar coin?

Here's the argument in favor of the platinum coin solution.

"But that will be inflationary!" This is a more serious objection, and it gets at what the platinum coin strategy really is -- financing the federal government's operations by printing money instead of borrowing it. The trillion- dollar coin will never circulate, but it will be used to back cash payments coming from the Treasury that would have otherwise been financed by bond purchases.

If the government financed itself this way in general, that would absolutely be inflationary. But the president can hold inflation expectations steady by making absolutely clear that the policy will not lead to a net change in the money supply over the long term. Obama should pledge that once Congress authorizes additional borrowing, he will direct the Treasury to issue bonds to cover the government's coin-backed spending and then to melt the coin.

My objection to the idea is subtler. If it works, Republicans will be tempted to overuse the idea when they get in power.

My perspective derives from two traumatizing events: 1. After attaining office with his calls for fiscal responsibility, Ronald Reagan created pseudo-prosperity by running up astounding debts. 2. George W. Bush, ditto -- only worse. Based on that history, I suspect that the same conservatives who criticize the coin trick now may applaud the same contrivance once a Republican sits in the Oval Office. Trying this trick more than once could prove perilous.

All of that said, I'd rather see Obama imitate George Raft than try to pry the money away from Grandma.