I said that you don't force the Fed and the executive to behave unprofessionally as a solution to an unprofessional Congress: you make the Congress act professionally.
Kevin Drum puts it this way: "Fighting banana republic with more banana republic is far more dangerous than coin supporters think. It's one thing for Republicans to go crazy. It's another for craziness to essentially become institutionalized. When liberals stop fighting this kind of stuff, we really are on our way to banana republic-hood."
Exactly. Look, economists like unconventional answers. I've had as much fun as the next guy reading about this and thinking through it. It had a fun run as a goofy blogger solution. But this is the real world.
The president cannot default on the debt. It's unconstitutional. He also has to collect the revenue and spend the money that Congress orders him to. And Congress cannot rewrite the laws of arithmetic.
The Congress has the authority to borrow. Tell me where the Congress has the authority to pass a law that prevents the executive from executing other laws that it passes.
Ignore the debt ceiling. Call their bluff.
Of course that will be disruptive and cause a rucus. But at least it will be an end to these ad hoc solutions and crazy grandstanding. Just spend the money Congress ordered you to spend and collect the taxes Congress ordere you to collect.
Demand, Supply, and Macroeconomic Models
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