Krugman Thinks White House Will Use Legal Technicalities As Last Ditch Move To Avoid Default

By Josh Marshall
February 15, 2023 
TPM

We talked to economist and Times columnist Paul Krugman today in a TPM Inside Briefing. The full interview will be available for members tomorrow. But the biggest surprise for me came when we spoke about the debt ceiling. I think most of us assume that minting trillion dollars coins or invoking the 14th amendment amount to a kind of politics nerd fanfic — cool and probably the right thing to do but not at all things that are actually going to happen. Krugman told TPM he assumes that that’s exactly what will happen. They’ll deny it till the last moment. But if it comes down to the wire and the White House has to choose between default and one of several legal stratagems to save the full-faith-and-credit hostage from the House radicals’ firing squad they’ll do just that.

To be clear, he didn’t say he was sure or that it was guaranteed. But the fact that it’s his working assumption came as a pretty big surprise to me. He also points so much less discussed strategies as ones that may be more likely than boffo ideas like the trillion dollar coin.

“I think a lot of us are operating under the working assumption that the Biden people will deny up till the last minute that they’ll do any of the funny strategies. But then if push actually does come to shove they will. And they’ll mint the trillion dollar coin or they’ll invoke the constitution … There’s now a menagerie of different, exotic strategies that all have zero economic significance. They’re all about just exploiting the fine print in the law to avoid this. But if they can’t do that then it could be really bad.”

Krugman discusses a number of options. And it seems to be some of these lesser discussed options he sees as more likely.

Watch the whole exchange here.