A few days ago Paul Krugman jumped the shark:
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.
So, there ya have it. Paul’s contribution to the debt ceiling problems. And his reasoning?
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.
I think Paul is forgetting that we can service our debt very easily with existing revenues. The money we don’t have is for additional spending. There really is very little danger of defaulting on our debt.
Anyway, cooler, calmer and more rational minds have saved the day:
The U.S. Treasury Department said on Saturday it will not produce platinum coins as a way of generating $1 trillion in revenue and avoiding a battle in Congress over raising the U.S. debt ceiling.
The idea of creating $1 trillion by minting platinum coins has gained some currency among Democrats in recent days as a way of sidestepping congressional Republicans who are threatening to reject a necessary increase in the debt ceiling unless deep spending cuts are made.
The Treasury Department and the Federal Reserve, both independent of one another, each concluded this was not a viable option.
“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” said Treasury spokesman Anthony Coley in a statement.
File this under “no kidding”.