Don't Try to Appease Economic Terrorists by Paul Krugman
Don’t Try to Appease Economic Terrorists
Jan. 19, 2023, 5:06 p.m. ET
4 MIN READ
By Paul Krugman, Opinion Columnist, NYTimes
https://www.nytimes.com/2023/01/19/opinion/columnists/democrats-debt-ceiling.html
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What, then, are the alternatives? I see three major possible routes.
First, while it remains baffling that Democrats didn’t raise the debt limit while they still controlled Congress, there could yet be a legislative solution: Democrats could seek a “discharge petition” to force a vote on raising the debt limit despite opposition from G.O.P. leaders. This would both take time and require support from a handful of sane Republican House members. But it’s surely worth trying.
Second, it’s probably possible to use financial engineering to bypass the debt limit. The most famous proposal calls for minting a platinum coin with a face value of, say, $1 trillion, depositing that coin with the Federal Reserve and spending out of the bank account thus created. Believe it or not, this would almost certainly be legal.
Another option would involve raising money by issuing “premium bonds” when existing debts come due — bonds whose face value is the same as that of the bonds they replace, so that they don’t officially increase the debt, but offer high interest rates, so they sell for much more than their notional value.
These would, of course, be financial gimmicks. So? If it takes gimmickry to frustrate the schemes of destructive extremists empowered by a legal quirk, and thereby avoid financial catastrophe, so be it.
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