What "Debt Limit"????

The so called "debt limit" law is unconstitutional because it is a legislative entrenchment. And such entrenchment has been found to be unconstitutional in several cases. The problem of entrenchment recently reared its head in the discussions of Senate Rules. As you may recall, the position of those who were against the rule of 2/3rds majority to change the rules was that each new congressional body (both House and Senate) constitutes a NEW legislature which has the authority to alter any and all prior legislation just as the previous body had that same power. The only "law" that survives a change in the congressional membership due to the constitutionally mandated elections held every two years are the laws specified in the Constitution as properly amended. Only those laws are sacrosanct from legislative fiat. Every new legislature has the authority to alter, extend, repeal, or modify the laws of the previous legislatures. Indeed, every legislature has the authority to alter even its OWN legislation by virtue of new legislation.

I am of the opinion that the budget passed by congress and signed into law in April of this year (2011) implicitly repealed the debt limit law created by the previous congress and signed into law last year. That opinion is based on the constitutional mandate that says the president must "see that the laws are faithfully executed" and the mandate against entrenchment.

However,

The other way to save the United States government while following _ALL_ the laws is through Treasury seignorage. Unfortunately, there is only one way to legally pursue Treasury seignorage, and that is in the minting of very high face value platinum coins. In 1996 the congress gave the Treasury full authority to mint platinum coins in any denomination (face value) the secretary might deem advisable (see section (k)). Whereas, the debt limit law prohibits the sale of Treasury notes, and the 2011 budget forces the spending that will exceed the debt limit as no new taxes are legislated, then the only means by which the laws can be faithfully executed is to mint the coins and deposit them to the Treasury accounts in the Federal Reserve banks. These coins and the clearing balances created by their deposit will be legal tender for all debts public and private and most certainly accepted in discharging a tax obligation. The Treasury will have created its own money without borrowing it into existence and it is perfectly constitutional and legal.

But before we all get carried away with the "inflation monster" and the "end of the world" we need to understand that this seignorage can only be employed in pursuit of congressional appropriations. In specifications for the "United States Mint Public Enterprise Fund" we find:

"There shall be established in the Treasury of the United States, a United States Mint Public Enterprise Fund (the “Fund”) for fiscal year 1996 and hereafter: Provided, That all receipts from Mint operations and programs, including the production and sale of numismatic items, the production and sale of circulating coinage, the protection of Government assets, and gifts and bequests of property, real or personal shall be deposited into the Fund and shall be available without fiscal year limitations: Provided further, That all expenses incurred by the Secretary of the Treasury for operations and programs of the United States Mint that the Secretary of the Treasury determines, in the Secretary’s sole discretion, to be ordinary and reasonable incidents of Mint operations and programs, and any expense incurred pursuant to any obligation or other commitment of Mint operations and programs that was entered into before the establishment of the Fund, shall be paid out of the Fund: Provided further, That not to exceed 6.2415 percent of the nominal value of the coins minted, shall be paid out of the Fund for the circulating coin operations and programs in fiscal year 1996 for those operations and programs previously provided for by appropriation"

...

"at such times as the Secretary of the Treasury determines appropriate, but not less than annually, any amount in the Fund that is determined to be in excess of the amount required by the Fund shall be transferred to the Treasury for deposit as miscellaneous receipts"

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And that simply says that ONLY congressional appropriations can be financed using coin seignorage. The secretary cannot use the money otherwise.

The congress created all these laws and the congress can change them. But until congress gets its laws straightened up, the executive is constitutionally forced to create the money needed to "faithfully execute" the 2011 budget using platinum coin seignorage.