New York Times economist/editorial Paul Krugman has always been viewed as being a bit “special” by many of us, and for good reason. His latest proposal, to mint a $1 trillion coin to get around the debt ceiling is just the latest in a long line of desperate coping mechanisms to avoid fiscal reality:
Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious.
For those new to this, here’s the story. First of all, we have the weird and destructive institution of the debt ceiling; this lets Congress approve tax and spending bills that imply a large budget deficit — tax and spending bills the president is legally required to implement — and then lets Congress refuse to grant the president authority to borrow, preventing him from carrying out his legal duties and provoking a possibly catastrophic default.
And Republicans are openly threatening to use that potential for catastrophe to blackmail the president into implementing policies they can’t pass through normal constitutional processes.
Enter the platinum coin. There’s a legal loophole allowing the Treasury to mint platinum coins in any denomination the secretary chooses. Yes, it was intended to allow commemorative collector’s items — but that’s not what the letter of the law says. And by minting a $1 trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to sidestep the debt ceiling — while doing no economic harm at all.
“…while doing no economic harm at all.”
Noted economist Ray Stevens, who has a much firmer grip on economic reality and the dangers of printing worthless coin and script, preempted Krugman’s laughable suggestion more than a year ago.
“Once you renounce any sense of decency it gets easier and easier.”
That about sums it up, Mr. Stevens.