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Thursday, October 10, 2013

Paul Krugman, "Dealing With Default": Defy Congress and Ignore the Debt Ceiling?

Paul Krugman is just chock full of good ideas. Remember how he once wrote concerning Occupy Wall Street (http://www.nytimes.com/2011/10/07/opinion/krugman-confronting-the-malefactors.html):

"Occupy Wall Street is starting to look like an important event that might even eventually be seen as a turning point.

. . . .

It’s clear what kinds of things the Occupy Wall Street demonstrators want, and it’s really the job of policy intellectuals and politicians to fill in the details."

And then there was Krugman's trillion dollar coin proposal, which even Jon Stewart labeled a "stupid f#cking idea" (see: http://www.salon.com/2013/01/15/jon_stewart_responds_to_krugman_platinum_coin_is_still_a_stupid_fcking_idea/).

Today, in his latest New York Times op-ed entitled "Dealing With Default" (http://www.nytimes.com/2013/10/11/opinion/krugman-dealing-with-default.html?_r=0), Krugman has another stroke of genius concerning what Obama could do if the US were to indeed hit the debt ceiling. After observing the disastrous potential consequences of the US government delaying or "prioritizing" repayment of its debt, Krugman notes that the president has another option: He could simply ignore Congress and the debt ceiling. Krugman writes:

"Many legal experts think there is another option: One way or another, the president could simply choose to defy Congress and ignore the debt ceiling.

Wouldn’t this be breaking the law? Maybe, maybe not — opinions differ. But not making good on federal obligations is also breaking the law. And if House Republicans are pushing the president into a situation where he must break the law no matter what he does, why not choose the version that hurts America least?"

Query: What would be the effect on the US dollar and the world economy of such a move by Obama? Would it really be that much better than default? There would still be an economic crash.

In addition, the question would then arise whether Obama had staged a "coup," meaning an unlawful seizure of power and not a brilliant stroke of genius.

Yup, Paul, that would almost be as successful as minting that trillion dollar platinum coin.

Ah, yes, the "stuff" that Nobel Prizes are made of . . .

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