The Latest Crazy Solution To the Debt Ceiling: IOU’s

The impending debt ceiling crisis, which we’ll reach by some time in mid-February unless Congress and the President are able to reach a deal to extend the debt ceiling, has already led to a couple bizarre banana republic like plans by which the President could avert the crisis without having to worry about Congress. One argument says that the 14th Amendment authorizes the President to create new debt despite the fact that the law doesn’t authorize it. As I noted the other day, though, it seems fairly clear that the legal arguments advanced in favor of this plan are a stretch at best, and that any debt that would be created would be of legally questionable status at the very least. Another argument says that the President can authorize the minting of a Trillion Dollar Coin, or several such coins, to authorize the Federal Government to spend money despite its inability to borrow. As I’ve noted, that strategy is of dubious legal merit and would have economic implications nearly as bad as failing to raise the debt ceiling itself. Now, someone’s come out with yet another idea, and this one just demonstrates how absurd the political conversation in Washington has become:

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