This morning while searching for something of interest to blog about Icame across this commentary on the liberal website truth-out.org by Paul Krugman, a writer for the NY Times. It is titled:
Coin or Not, Is There a Plan?
If I'd spent the past five years living in a monastery or something, I would take the Treasury Department's recent declaration that the trillion-dollar coin option is out as a sign that there's some other plan ready to go. Maybe the 14th Amendment, maybe moral obligation coupons or some other form of scrip, but something.
And maybe there is a plan. But as we all know, the last debt ceiling confrontation crept up on the White House because President Obama refused to believe that Republicans would actually threaten to provoke default. Is the White House being realistic this time, or does it still rely on the sanity of crazies?
The thing is, the coin option sounds silly, but it clearly obeys the letter of the law. As far as I can tell, none of the other options — other than outright surrender — has the same virtue. Failing to pay debt service would be a breach of contract. Paying contractors, and maybe Social Security recipients, in scrip would violate the law, which says that they should be paid, not given I.O.U.'s. A decision that the president has the right to ignore the debt limit after all would avoid these legal breaches at the expense of another breach.
And default in any of these senses would risk a huge collapse of confidence. So is there a plan, or will it just be another case of tough talk followed by a tail-between-the-legs retreat?
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