The problem is well known: the American Congress must approve an extension of the public debt limit, and if it doesn't do so, the entire state machine will come to a halt due to lack of funds. The decision should be obvious, given that the need for funding depends on spending and revenue laws already passed by Congress. But the Republican majority in the House artfully uses the debt limit as a weapon of blackmail to promote the spending cuts it favors.
There are two possibilities for Obama to foil this prevarication. The first is that, supported by some constitutionalists, which provides for exceeding the limit by bypassing Congress, with an 'Executive Order' from the President. The issue is controversial. The second provides for the brazen – but legal – recourse to a law that empowers the Treasury to issue platinum coins in the preferred denomination. Technically, then, the US Treasury could tell the mint to issue a trillion (one trillion) dollar platinum coin. and deposit the money with the Fed. In this way at least the government bonds owned by the Fed would be 'paid' and cancelled. Of course, this is a ruse. But the use by Republicans of the debt limit as a weapon of blackmail is equally an artifice. As Nobel laureate Paul Krugman wrote, between a benign artifice and a cowardly artifice, the choice should be clear.
