Cryptocurrency: $Trillion MMT Proof Coins, Inflation

[grarpamp]

The "Trillion Dollar Coin" Is Illegal

https://prestonbyrne.com/2021/09/30/onetrilly/
https://en.wikipedia.org/wiki/Trillion_Dollar_Coin

https://schiffgold.com/key-gold-news/inflation-bites-rising-prices-are-eating-up-personal-income-gains/
https://www.dollarcollapse.com/this-gold-bull-market/
https://casetext.com/case/whitman-v-american-trucking-associations
https://www.merriam-webster.com/dictionary/proof%20coin
https://twitter.com/prestonjbyrne/status/1444048802382553092
https://twitter.com/prestonjbyrne/status/1444334902346977285
https://archive.is/ye5d6
https://washingtonmonthly.com/2013/01/08/harvard-law-school-professor-laurence-tribe-on-the-legality-of-mintthecoin/

Much has been made lately of the possibility of minting a trillion
dollar coin to avoid Congressional gridlock surrounding the increase
of the debt ceiling.

    NEWS: Senior WH aides this week explored if US could keep making
payments even after debt ceiling breach. Internal WH memos discuss
range of options, including minting coin. (cc: @TheStalwart) But WH
review concludes only path 2 avoid calamity is
Congresshttps://t.co/LTc0itdRb9
    — Jeff Stein (@JStein_WaPo) October 1, 2021

    #MinttheCoin already.
    — Rashida Tlaib (@RashidaTlaib) January 15, 2021

    HOW MINTING A TRILLION DOLLAR COIN COULD AVERT A CONSTITUTIONAL CRISIS

    New post for the Odd Lots blog on #MintTheCoin.

    I used to think the coin trick was just about avoiding a default.
But after talking to @rohangrey I think the stakes are even higher
https://t.co/66cF6ltzLs
    — Joe Weisenthal (@TheStalwart) September 30, 2021

To be blunt, this claim is horse puckey and pseudo-legal in nature.

Below I explain why...
The statute doesn’t authorize a trillion dollar coin

Congress grants authority to the Executive Branch all the time to do
certain acts and promulgate certain regulations. It does this through
Acts of Congress which delegate that authority to the Executive
Branch.

Understanding what authority is granted, and its extent, requires us
to read carefully the terms – the text – of the legal rules which
govern the conduct of the Executive Branch. For example, in 2020-2021
the U.S. Centers for Disease Control and Prevention, or CDC,
instituted an eviction moratorium which barred landlords of property
subject to federally insured mortgages from evicting their tenants. It
did so in reliance of a grant of authority from Congress.

    As statutory authority for the moratorium, the CDC relied
exclusively on Section 361 of the Public Health Service Act. See id.
at 55,297. Enacted in 1944, this provision delegates to the Secretary
of Health and Human Services the authority to “make and enforce such
regulations as in his judgment are necessary to prevent the
introduction, transmission, or spread of communicable diseases” across
States or from foreign lands, 42 U.S.C. § 264(a), who in turn has
delegated this power to the CDC, 42 C.F.R. § 70.2.

Section 361 reads in relevant part:

    The Surgeon General, with the approval of the Secretary, is
authorized to make and enforce such regulations as in his judgment are
necessary to prevent the introduction, transmission, or spread of
communicable diseases from foreign countries into the States or
possessions, or from one State or possession into any other State or
possession. For purposes of carrying out and enforcing such
regulations, the Surgeon General may provide for such inspection,
fumigation, disinfection, sanitation, pest extermination, destruction
of animals or articles found to be so infected or contaminated as to
be sources of dangerous infection to human beings, and other measures,
as in his judgment may be necessary.

In a similar way, Congress also delegates authority to the Secretary
of the Treasury to mint coins. The relevant provision for the “Mint
the Coin” movement is sub-section (k) of 31 U.S. Code § 5112, which
states in relevant part:

    The 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 prescribe from time to
time.

A number of adherents of an expansionary monetary ideology called
“Modern Monetary Theory,” or “MMT,” and some of their friends in the
media, including a pet legal academic of the movement who wrote a
75-page paper on the subject, appear to think that this statute
authorizes the Treasury to mint a $1 trillion coin.

    And again, I'd just point out that @PhilipNDiehl -- who authored
the law's precise wording along with former Rep. Mike Castle of
Delaware -- came to the same conclusion, upon being presented with
@mucha_carlos' interpretation of the statute. https://t.co/gwpYxKEa8w
    — Joe Weisenthal (@TheStalwart) September 30, 2021

On a very cursory reading it certainly seems possible that this
statute could authorize minting a $1 trillion coin, as long as the
coin were a platinum proof coin. If this were the case, the Treasury
could then sell to a prospective buyer and book the profits as general
revenue, as indeed the Treasury does for all manner of proof coins and
bullion that it issues and sells directly to the public on a regular
basis.

Words have meaning, though, and I suspect the MMT crowd reading
5112(k) simply isn’t reading it carefully enough. This means that if
someone “Minted the Coin” and that act were challenged, I don’t think
a court would agree with them.

Let’s bounce back to Alabama Ass’n of Realtors (the CDC case)
government claims of sweeping authority. In that case the CDC sought
to argue that the language authorizing the Surgeon General to “make
and enforce such regulations” as were necessary for the prevention of
disease to authorize a nationwide eviction moratorium.

The District Court (with which the Supreme Court eventually agreed)
found for the plaintiffs. Applying Chevron deference, the court first
asked whether Congress had “spoken directly to the precise question at
issue” – i.e., does the law in dispute do what the government says it
does.

The Court found that it did not. The use of a list which governed the
scope of the regulation the statute permitted – “inspection,
fumigation, disinfection, destruction… and other measures” – limited
the “other measures” that were allowable: such measures were
“controlled and defined by reference to the enumerated categories
before it,” an application of the so-called ejusdem generis canon of
textual construction. The court therefore held that “[t]hese ‘other
measures’ must therefore be similar in nature to those listed'”.

Put another way, the court looked to the actual text of the law and
found that “[t]he national moratorium satsifies none of these textual
limitations. Plainly, imposing a moratorium on evictions is different
in nature” than inspections, fumigations, disinfections, etc.; and
“[m]oreover, interpreting the term ‘articles’ to include eviction
would stretch the term beyond its plain meaning.”

The second Chevron step is for the court to decide whether the
agency’s interpretation of the statute is permissible. The CDC argued
– as the “Mint the Coiners” do – that

    “the grant of rulemaking authority…. is not limited in any way by
the specific measures… Congress granted the Secretary the ‘broad
authority to make and enforce’ any regulations that ‘in his judgment
are necessary to prevent the spread of disease.'”

The court disagreed because, among other things,”[a]n overly expansive
reading…that extends a nearly unlimited grant of legislative power to
the Secretary would raise serious constitutional concerns,” and
further that “courts ‘expect Congress to speak clearly if it wishes to
assign to an agency decisions of vast ‘economic and political
significance[.]”

Put another way, the doctrine that “Congress does not hide elephants
in mouseholes.”

The Court concluded:

    Accepting the Department’s expansive interpretation of the Act
would mean that Congress delegated to the Secretary the authority to
resolve not only this important question, but endless others that are
also subject to “earnest and profound debate across the country.”
Gonzales, 546 U.S. at 267 (internal quotation marks omitted). Under
its reading, so long as the Secretary can make a determination that a
given measure is “necessary” to combat the interstate or international
spread of disease, there is no limit to the reach of his authority.

    “Congress could not have intended to delegate” such extraordinary
power “to an agency in so cryptic a fashion.” Brown & Williamson
Tobacco Corp., 529 U.S. at 159. To be sure, COVID-19 is a novel
disease that poses unique and substantial public health challenges,
see Def.’s Cross-Mot. at 14, but the Court is “confident that the
enacting Congress did not intend to grow such a large elephant in such
a small mousehole.”

So as we we can see, even where the plain language of a law would
appear to authorize the nearly unlimited exercise of power, the claim
of unlimited power invites us to take – as the courts would take – a
closer look.

This brings us to the question of what might happen if the Secretary
of the Treasury decided to read Section 5112(k), the Platinum Coin
rule, as granting a similarly broad authority to mint a $1 trillion
coin, as the “Mint the Coin” crowd claims it does.

How that would end is anybody’s guess, but we can have some idea about
how it would play out. First, a radical Treasury Secretary, likely
with the support of a radical President, would decide that it’s no
longer worth his or her time to deal with an uncooperative Congress on
a debt ceiling increase. Then, the Secretary, listening to some
MMT-schooled special advisers in the new administration, would mint
the coin and dare someone with standing – whomever that might be – to
sue.

Pleadings would follow, in which the government would get cute like
the CDC did in Alabama Association of Realtors. In the meantime, the
challenger would argue:

    5112(k) is a law which enables the Mint to mint and sell two
types, and two types only, of platinum curios: “platinum bullion” and
“proof platinum” coins.

    Trillion dollar coiners’ legal argument is that they believe
5112(k) allows them to mint, and circulate, proof coins to redeem U.S.
outstanding debt.

    The statute does not define “proof platinum” so we have to go with
the term’s plain and ordinary meaning. The dictionary definition of
“proof coin” in Merriam-Webster and the OED – means a collectible, a
decorative thing, means a “coin not intended for circulation but
struck from a new, highly-polished die on a polished planchet and
sometimes in a metal different from a coin of identical denomination
struck for circulation.” In the OED it means “special coins struck
from highly polished dies mainly for collectors“, with one definition
dating to 1949 pointing out that “Proof coins were never struck for
circulation… Proofs were first used as presentation pieces.”

    There is a definition of “proof coin” in 31 CFR § 92.3, but it
isn’t expressed to govern the interpretation of Section 5112(k).

    Applying the plain and ordinary meaning of “proof coin” to the
statute, 5112(k) does not authorize the issuance of proof coins for
circulation, even if it such coins are made of 100% pure platinum
(although if valued by weight they could be sold as “bullion” – more
on that below). The use of the term “Proof Coin” requires for proof
coins to be sold with the intent of being curios or collectibles, not
circulating currency.

    “Circulation” means, in relation to currency, “the passing of
something, such as money or news, from place to place or person to
person.”

    The Trillion Dollar Coin is clearly made with the intent of being
placed into circulation, even if that circulation is initially very
limited (to the Fed). It, or its series, is also not made with the
intent of being produced mainly for collectors, if we want to use the
English dictionary instead of the American one. There is nothing
preventing the Fed from selling it to someone else for $1 trillion,
and so on, in the same manner as any other coinage. This is especially
the case if the money bears the inscription “this money is legal
tender for all debts public and private,” as some prominent MMT
promoters claim it should. To describe the “Trillion Dollar Coin” as a
proof coin, to borrow from Alabama Ass’n of Realtors, would be to
“stretch the meaning” of “proof coin” beyond recognition.

    Using two of the most authoritative plain language definitions of
“proof coin,” the Trillion Dollar Coin cannot be described as a “proof
coin.” Therefore its production as a proof coin is not authorized by
5112(k).

    Additionally, even if the Trillion Dollar Coin could be described
as a “proof coin” (and, to be clear, it cannot, at least if two of the
leading English-language dictionaries are to be relied upon), the fact
that Trillion Dollar Coiners seem to think that the power is infinite
– quadrillion, quintillion, whatever-illion are all in play, they
claim – is problematic. Congress does not hide elephants in
mouseholes, much as was the case with the CDC and the Public Health
Act. If we look at the fullness of 5112(k) (enacted in 1996) and go
through the Chevron two-step, it’s clear that Congress was authorizing
the Mint to produce collectibles, and not authorizing the Treasury
Secretary to assume wholesale control of U.S. fiscal and monetary
policy, or create unlimited money for the government’s use in such a
way as to arrogate to itself the power to singlehandedly resolve
“earnest and profound debate across the country” over the statutory
debt limit.

A reader asks:

    I don’t disagree, but your article only addresses the “proof
platinum coins” part of the statute. What about the “platinum bullion
coins” part right before it?
    — Tony T (@tonyt451) October 1, 2021

On the subject of bullion: as I mentioned above, 5112(k) authorizes
the manufacture and sale of two types of collectible – “platinum
bullion” and “platinum proof.” Because the statute does not give us a
definition of “platinum bullion,” we have to take the term at its
plain and ordinary meaning. As a result, the “platinum bullion”
language in 5112(k) isn’t readily cooperative with MMT funny business,
which is why the MMT crowd’s argument is that the trillion dollar coin
they want to strike is to be a platinum proof.

There are alternative price-setting regulations for gold bullion. MMT
people think that these other regulations permit platinum bullion to
be given a face value higher than the price of the metal used in the
coin.

They are wrong.

    They could also try reading the actual Coinage Act, which states
quite clearly that the bullion value is a floor, not a ceiling, to the
face value of bullion coins (which #MintTheCoin would not be anyway)
pic.twitter.com/mQPh3DJaNE
    — Rohan Grey (@rohangrey) October 1, 2021

The issue is that the regulations governing the sale of gold bullion
aren’t expressed to apply to platinum bullion under 5112(k). They do
not provide a definition of “bullion” for the purposes of 5112(k).
.Indeed, they don’t define “bullion” at all – they just regulate its
manner of sale, if it’s gold.

We are not entitled to read these provisions as saying things that
they do not say. Absent a statutory definition of “platinum bullion”
we must fall back to plain language. Bullion’s dictionary definition
is “[precious metals] in bulk before coining, or valued by weight
[after coining].” If the Mint could rustle up $1 trillion in platinum
5112(k) authorizes it to issue a (very large) $1 trillion coin, or
more likely lots of smaller-denomination platinum coins. If it’s not
valued by weight, and not substantially made up of platinum, I submit
that it cannot be platinum “bullion” and would not be authorized by
the “platinum bullion” language in Section 5112(k).

Moving away from “platinum bullion,” and before wrapping up the
discussion of “platinum proof”I note, before MMT fanbois chime in that
Rohan Grey’s paper on this subject refers to a “circulation critique,”
that this critique does not apply to this conclusion as his argument
pertains to Section 5136 whereas my objection says that the Trillion
Dollar Coiners are simply misreading Section 5112(k) without regard to
any other statutory provision.

MMT proponents contend the platinum coin statute’s grant of authority
is essentially unlimited:

    Is there any evidence anywhere in the last two hundred years of
the Mint returning too much seigniorage revenue? Of any discussion of
an upper bound? Of any limiting principle implied in the act or
especially the extremely unusual language of the platinum coin
statute? No.
    — Rohan Grey (@rohangrey) October 1, 2021

This view is incorrect and, in any case, logically inconsistent. If we
want to put 5112(k) in its wider cultural context, the so-called
intentionalist approach, then we get to talk about what Congress meant
when they drafted Section 5112(k) – and it’s clear Congress didn’t
intend to grant the Treasury a power to mint a trillion-dollar-coin.

This is why folks like the MMTers point to, and rely upon, the plain
language of the text, a literal reading which yields (in my view an
absurd) result. That invites us, as it would invite a court going
through the Chevron two-step, to ask whether the plain language grants
the power claimed.

Lib law profs like Larry Tribe have cut corners on this analysis and
reached the same conclusion as the MMT crowd:

    Using the statute this way doesn’t entail exploiting a loophole;
it entails just reading the plain language that Congress used. The
statute clearly does authorize the issuance of trillion-dollar coins.

As we know, this view is wrong. The statute does not authorize the
Treasury Secretary to have the Mint strike any or all coins. It
authorizes the Treasury Secretary to strike bullion coins and proof
coins, a necessarily narrower definition which, per the inclusio unius
canon of statutory construction, necessarily excludes any coin which
is not bullion or a proof coin from its scope.
Conclusion: the Trillion Dollar Coin, being neither “bullion” nor a
“proof,” cannot be lawfully made

In order for a trillion dollar coin to be lawfully struck under the
power granted in 5112(k), it must either be bullion (i.e., contain $1
trillion of platinum) or it must be a proof coin. MMT shitcoiners’
proposal requires a “proof coin” in order to work (and if they had $1
trillion in platinum to spare they would have long since sold it to
pay for state expenditures).

But as we have seen, just as not all that glitters is gold, not every
coin is a proof coin. MMT types are not free to supply “proof coin”
with whatever meaning they want. That is the mistake the MMT crowd has
made for seven years on the trot in (mis)reading 5112(k), and which
they continue to make today.

Since 5112(k) doesn’t supply a definition of “proof coin,” we have to
look to the plain and ordinary meaning of “proof coin” – as found in a
dictionary – to provide that limiting definition, the thing that tells
us what makes a proof coin different from any other coin used as
money. The definition we find there – “never struck for circulation”
and made for collectors in the OED, “not intended for circulation” in
Merriam-Webster – tells us that Section 5112(k) authorizes the
creation of a collectible which will not enter into circulation. This
expressly contradicts the “Mint the Coin” plan, which requires, and
therefore intends, circulation, and is not made to pass into the hands
of collectors but is made as a fiscal policy trump card.

Long story short: a shiny object made with the intent of being a
Trillion Dollar Coin is, definitionally, not a “proof coin.” If it’s
not a proof coin (as it needs to be for the MMT crowd’s legal argument
to work), 5112(k) doesn’t give the Treasury Secretary legal authority
to mint it as a proof coin in platinum and sell it for $1, let alone
$1 trillion.

The doctrine of absurdity

There is also a canon of statutory construction which in England we
call the Golden Rule and in America they call the “Doctrine of
Absurdity.” Generally stated, the Doctrine of Absurdity holds that
when interpreting a statute, it is to be given its plain and ordinary
meaning unless the meaning of the statute would be absurd.

The American formulation of that rule takes the following form:

    The principle sought to be applied is that followed by this court
in Holy Trinity Church v. United States, 143 U. S. 457, 12 S. Ct. 511,
36 L. Ed. 226; but a consideration of what is there said will disclose
that the principle is to be applied to override the literal terms of a
statute only under rare and exceptional circumstances. The
illustrative cases cited in the opinion demonstrate that, to justify a
departure from the letter of the law upon that ground, the absurdity
must be so gross as to shock the general moral or common sense.

To that end, I asked the MintTheCoiners what limits, if any, they
placed on the power of the Treasury Secretary here – could he or she
mint a quadrillion dollar coin, quintillion dollar coin, sextillion
dollar coin under 5112(k)?

Not realizing I was teeing their responses up for this blog post, they
responded. Rohan Grey, a first year contracts lecturer at Willamette
Law, said he thought they could:

    I already answered this question.https://t.co/cy26WOrWOr

    There's no restriction on the amount of reserves the Fed can
create, there's no cap on the amount of coins the Mint can create,
when the debt ceiling is suspended there's no limit on the number of
tsys, etc.
    — Rohan Grey (@rohangrey) September 30, 2021

The absurdity doctrine is generally disfavored by U.S. courts. It
takes a fairly extreme example to trip it and the Supreme Court has
only dealt with the matter a handful of times. Quite apart from the
textual analysis we saw in the Alabama Ass’n of Realtors to one
outrageous example of government overreach, which gives us some hints
as to how a well-informed district judge might approach the
MintTheCoiners’ textual arguments and claims of sweeping authority, I
submit that claiming “proof coins” – keeping in mind this term means
they are not for circulation – to justify the implementation of an MMT
policy with seemingly no limitation, infinite money, which expressly
places new money into circulation (a) fails for textual grounds, (b)
shocks the conscience and (c) is, in every conceivable way, thus an
absurd interpretation of a statute designed to authorize the
manufacture and sale of numismatic curios.

At the end of the day, “MINT THE COIN!” strikes me as bad,
pseudo-legal analysis of a law which very clearly does not authorize
“minting the coin” – at least, if we don’t stretch the meaning of
“proof coin” beyond recognition. Fortunately the matter also appears
to be moot, as it seems Congress will be raising the debt limit and we
can safely ignore “minting the coin” – at least for now. The danger
behind this idea, however, is that one day we will be faced with an
administration more stacked with Marxist radicals than the current
one, who will have few qualms at sweeping Congress aside to carry out
their own policy agendas.

The danger there is not loss in the courts, but rather what will
happen between the time that the coin is minted and a final judgment
is entered in a challenger’s favor. When trillions of dollars and the
full faith and credit of the United States are on the line, a
Mint-the-Coiner could simply mint $trillions to fund its operations or
redeem Treasuries and then dare the courts to unwind the transaction –
forcing a default – after the fact. Even if the Executive Branch
should lose, it could put the courts in an impossible dilemma where
restoring constitutional order would force a default.

That – the act of norm- and constitution-breaking unilateral executive
action – must be forestalled as a matter of urgency. As soon as
Republicans reclaim power they must introduce legislation to amend
Section 5112(k) to ensure that no administration can misconstrue its
meaning ever again.

Twitter CEO Jack Dorsey appeared to suggest that if the coin was
minted, America could see Civil War...

    (more importantly: 1856)
    — jack⚡️ (@jack) October 6, 2021