Over at the WaPo. The idea here is that because we are unlikely to acctually default on the federal gov’t’s obligations, I worry that some people are tuning out the debt ceiling debate. But there are good reasons not to do so. First, see the figure in the piece–even flirting with the debt limit distorts markets. Second, time spent squabbling over this is time not spent on solving real problems. And third, such dysfunction isn’t an accident; it’s a strategy.
Oh, and pre-empting comments re the “platinum coin” solution, the reason I don’t go there in the piece, along with space constraints, is that Treasury and White House officials have been unequivocal in rejecting that approach, as they do not believe they have the authority to mint such a coin.
I don’t know if that’s legally accurate, but I’ve seen enough scholarly arguments on the other side (arguing the Treasury does have such authority) that if it really came to default, I’d mint the coin in a New-York minute. Yes, the opposition would take legal action, but believe me, the White House is plenty lawyered up.