Krugman backs minting a $1trn platinum coin

The real funny story's the debt ceiling.

Paul Krugman, Nobel Laureate and New York Times columnist/blogger, has written that President Obama should be willing to mint a $1trn platinum coin in order to avoid having to compromise over the debt ceiling.

Krugman blogs:

He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious…

It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years. Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin.

Krugman is… half right. As Felix Salmon notes, it's no surprise that the people most in favour of the platinum coin option are largely economists. From an economic point of view, there really is no reason not to do it. Less informed commentators use basic knowledge of economic theory to warn that minting the coin is "printing money" which will lead to "massive inflation"; but since using the legal quirk to prevent a government shutdown wouldn't lead to an increase in the money supply, those fears are unfounded.

Instead, the problem is the political one. Salmon sums it up:

If you believe that the country is best run by grown-ups, you can’t believe in #mintthecoin, because it simply isn’t a grown-up strategy. If you believe that the House Republicans behave in crazy and illogical ways, then you can’t believe in #mintthecoin, because the threat of minting the coin doesn’t work against someone who’s crazy and illogical. And if you believe that the best way to approach the debt ceiling is to try and abolish it altogether, then you can’t believe in #mintthecoin, because the entire strategy is based on the idea of keeping the ceiling where it is, and then trying to circumvent it.

There are still some economic problems with the idea, which Salmon touches on. The chief ones are to do with the sheer uncertainty of minting the coin. Everyone thinks it is probably legal – but until and unless the Supreme Court affirms that, nobody can be certain it is. Which means that for an indeterminate period, the US economy would be like Schrödinger's Cat, in a superposition between default and creditworthiness. That's not desirable for anyone.

The real reason to carry on talking about minting the coin isn't, as Krugman argues, because it might mean that Obama actually mints it. But nor is it, as Salmon argues, because it might scare the Republicans into backing down. It is, instead, to come up with something Obama can "concede" on without actually having to concede on anything at all. Obama offers to change the law to ban minting the coin, in exchange for also changing the law to end the debt ceiling. It's the argument made by *Bloomberg*'s Josh Barro.

And make no mistake, the debt ceiling is ridiculous. Quite beyond its pernicious effects – it would prove beyond doubt that the American political system is broken, would almost certainly lead to the US defaulting on its international debt payments, and would definitely lead to crippling immediate defaults on *national* debt payments like tax refunds and federal salaries – it is a legal limit which makes no sense, politically or economically. The debt ceiling is a limit, set by congress, on how much the executive branch can borrow. But the executive branch's spending is also set by congress: when it authorises a bill, the president is not allowed to spend a penny over the amount specified, nor a penny under.

The debt ceiling could only ever have one of two effects: either it does nothing, because it is higher than the amount congress has ordered the executive branch to borrow; or it forces the President to break the law, either by ignoring the debt ceiling or by ignoring all of the other bills passed by congress instructing him to spend.

And we're laughing about the platinum coin?

A US platinum coin. Photograph: Wikimedia Commons

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty
Show Hide image

Of course we could do more to stop terrorism – if we’re willing to live in a police state

 The only way to stop this sort of human monster completely is to become like them.

What are we prepared to sacrifice to keep children safe? On Monday night at Manchester arena, 22 people were senselessly slaughtered. Many of them were young girls, pouring out of a pop concert, giddy with excitement. Hours before the killer was identified or Islamic State had claimed responsibility for the attack, the political conversation had already turned to vengeance, and respected public thinkers were calling, in the name of those dead children, for further crackdowns on immigrants and perceived outsiders, for troops on the streets, for "internment camps'" with straight faces and the sincere implication that anyone who disagrees is weak-willed and possibly a terrorist sympathiser. A lot of little girls have been killed. What good are tolerance and human rights today?

Nobody can be expected to be instantly rational when dozens of kids have just been maimed and murdered. There are, however, individuals who seem more than prepared to exploit the occasion to further their own agendas. Yet again, we are told that the state is failing in its duty to protect "our" children, that pansy liberals won't let us raise the "obvious solutions" to this problem. Nobody can quite bring themselves to articulate exactly what those "obvious solutions" might be, hedging the issue instead with grave looks, raised eyebrows and stern allusions to the consequences of political correctness. The consensus is that we are living in a nation so paralysed by hand-flapping progressive talk-talkery that ordinary, right-thinking folks aren’t allowed to say what’s really on their minds. 

The truth is that nobody’s stopping anyone from saying what they think about any of this, and if you don’t believe me, take a brisk scroll through Twitter this afternoon, and keep some eyeball bleach on hand. In fact, the reason a lot of people are stopping short of saying what they think ought to be done is that they know full well that what they think ought to be done is unacceptable and shameful in any sane society. So shameful, indeed, that it takes a professional shit-stirrer to speak it aloud. 

Enter Katie Hopkins. It’s not just pro-trolls like her who have called for a "final solution" following the Manchester Arena bombing. Telegraph columnist Allison Pearson declared that we should start putting "thousands" of people in "internment camps" in the name of protecting children. Spiked editor Brendan O’Neill echoed the tone, blaming "multiculturalism" for mass murder, and implying that anyone advocating calm and tolerance in the face of terrorism does not feel sufficiently angry about the murder of 22 of their fellow citizens. “It is becoming clear,” insists O'Neill, “that the top-down promotion of a hollow ‘togetherness’ in response to terrorism is about cultivating passivity.”

In fact, Britain is far from passive in the face of extremist violence. Britain already has one of the most robust counter-terrorism programs on the planet. We are among the most surveilled societies in the Western world. We have a counter-extremism program, Prevent, that places a duty in schools, universities and other public bodies to report any suspected radical or "extremist" activity, and is so exacting that it has been condemned by experts and educators across the board as an infringement of the right to free speech and thought. The authorities responsible for heading off and hunting down these psychopaths and all who sail with them are hardly slacking on the job. The problem is that there's really no way to up the game from here without going full police state. The pundits condemning the relevant institutions as shirkers today know this full well, which is why a police state is exactly what they’re asking for, with the inference that anyone who disagrees is awfully relaxed about the violent death of young girls and their parents.

So let’s not mince words. Let's be absolutely clear what’s at stake here. Let us acknowledge that yes, we could do more to stop this, if we wanted. And then let's think about whether that's really, actually, what we want.

Yes, we could do more. We could allow the state to round up and lock away anyone even remotely suspected of violent, extremist tendencies; anyone who has ever accessed a suspicious website or attended a dubious lecture. We'd have to lock those people up for a very long time, of course, because if there's one thing that nudges people from a passing interest in anti-state violence into full on fanaticism, it's active state oppression. We could ban anyone who's ever been in any way associated with extremist ideology from entering the country, including those who are fleeing violence themselves. We could institute total surveillance of everyone’s online activity. We could build those internment camps. They’d be expensive, so it’s only fair that potential degenerates and their associates be obliged to work for their keep. Of course, you wouldn't want those internment camps spread out - you'd want the inmates concentrated in one place. What could we call such camps? I’m sure we’ll think of a name.

If we did all that, and more, then yes, there's a chance that we could stop atrocities like this from happening again. Even then, there's no guarantee. The most exacting neo-stasi infrastructure can’t always stop the rogue loner with a breadknife and a brain boiling with arcane violence. It would, however, significantly lower the odds.

The question is not whether it can be done. Of course it can be done. Paranoid, bloodless, hyper-vigilant police states have been instituted in European nations before, and if any country on earth has the infrastructure to make it work right now, it's Britain, a small island with an extensive surveillance architecture, a mostly urban population, a conservative government currently seeking re-election on a tough-love platform, and no pesky constitutional rights to free speech. We can do it if we want to. Sure we can. The question is whether we should. The question is whether it's worth it. Is it worth it, to prevent the loss of one more young life, the devastation of one more family?

Don’t answer that right now. Give it a few days, at least, because right now it makes a great deal of emotional sense to say yes, yes, it’s worth it. Anything to stop something like this happening again. To save one child. To keep hundreds more from being traumatised for life just because they went to a pop concert with their friends. I suspect that today, tucked away in the collective psyche of a great many otherwise tolerant and decent people, is a furious, frightened voice yelling - sure, let’s do it. Let’s shut the borders and build the camps. It might not be nice, it might not even be right, but these evil dickheads are killing kids, so frankly, fuck the Geneva convention.

That furious, frightened instinct needs to be named so we can deal with it like adults. The anger and the fear here are real and legitimate, even though a great many bad actors are exploiting them to further racist, xenophobic agendas. It’s alright to be frightened and furious. It’s not alright to let those emotions dictate public policy. Today, with the faces of murdered little girls all over the news, is not a day to ask anyone what they’re prepared to sacrifice to make sure this never happens again.

Because the truth is that the only way to stop this sort of human monster is to become like them. The only way to be sure that no swivel-eyed extremist who hates life, and liberty and raw youthful joy so much that he's prepared to blow up a pop concert full of teenagers can never do that again is to acquiesce to the sort of state apparatus that is anathema to joy and liberty and life, the sort of state apparatus that no child should grow up with.

This is why platitudes about 'unity', about 'not letting hate win', about keeping it together and trying not to let our worst instincts take over, are not, in fact, platitudes at all. They are not banal. They are not hollow. It takes enormous strength of character, at a time like this,  not to give in to fear and rage and the rationale of revenge. The people of Manchester are showing that strength in the wake of one of the most horrific mass murders this tense and divided nation has ever seen. We owe it to them, to the victims of this attack, and to their families not to sully their memories by surrendering to the logic of intolerance.

It is at moments like this when a community proves its character.  It is at times like this that it is more, not less essential to refuse racist and fascist ideas. Tolerance is not passivity. Kindness is not weakness. It is not cowardly to stay with our anger and our grief and refuse to let those emotions sway our commitment to human dignity, or to look dreadful vengeance in the face and refuse it. It is strength. It is strength more profound and more human than fundamentalists of any faction can comprehend, and if we hang on to that strength, they will never, ever win. 

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

0800 7318496