The Krugman

Now that Congress has kicked the debt ceiling down the road a few months, what of the idea of minting a $1 trillion coin made of platinum? Supposedly our leaders would smelt this trillion dollar slug from a bit of platinum and deposit it at the Federal Reserve, against which the Fed would pay out irredeemable electronic paper ticker tender to cover debts. The scheme s most famous backer turns out to be the Nobel laureate Paul Krugman.

Maybe they ought to call the coin The Krugman. That s how ardently the economist has embraced the scheme. He did so the other day in a column that ran in the Times under the headline Biden Should Ignore the Debt Limit and Mint a $1 Trillion Coin. The professor-turned-columnist seems to have been set off by Senator Rubio s suggestion that President Biden s $3.5 trillion budget isn t socialism, it s Marxism.

The fact that Republicans routinely say such nonsense, Mr. Krugman kvetches, is why the Biden administration should mint a $1 trillion platinum coin or declare that the Constitution gives it the right to issue whatever debt is needed to fund the government or use some other trick I haven t thought of … That federal policy on taxing and spending is set by a straightforward legislative process, he says, we all learned in civics class.

Do students still take civics? Mr. Krugman asks in an aside.

It turns out, Mr. Krugman goes on to complain, that there is a quirk in the budget process requiring that Congress must also separately authorize the federal government to take on more debt. What he calls a quirk is the second of the great powers after taxing that the Constitution grants to Congress, namely the power to borrow money on the credit of the United States. That quirk goes only to Congress.

via www.nysun.com