Ezra Klein adopts the arguments which conservatives Philip Klein and Ross Douthat have made: that the “mint the coin” crowd is really bailing out the GOP crazies. The theory goes like this: only a handful of GOP crazies really want to default the nation; the bulk of Congressional Republicans, including the leadership, is just playing along with them for now, perhaps in the hope that they can get something out of the White House, but when push comes to shove they won’t really risk the future of the nation by refusing to raise the debt limit. However, if it’s clear that the White House is prepared to take extraordinary steps in the event of breaching the debt limit — the coin, but the other options work as well — then sane Republicans will be willing to stick with the crazies and force the WH to carry those options out…which will first of all be good for the crazies and bad for sane conservatives, but also make Obama the loser of the spin game.
A less anti-coin version of this is Greg Sargent’s dismissal of it:
1) The White House will never mint the platinum coin. 2) That won’t matter, because GOP won’t allow default. That is all.
Well…I don’t know. If you follow Greg’s analysis, then I think so: if you believe that House Republicans, when push comes to shove, will wind up passing a debt limit extension (perhaps with mostly, or even all, Democratic votes; they’ve talked about voting “present” before), then I think there’s no reason for the White House to signal that they would use the coin or other desperation measures.
On the other hand, perhaps Republicans really are willing to sink the economy if they don’t get their way. What then? Klein thinks that allowing the nation to suffer in order to teach Republicans a lesson would be a good idea. I’m…skeptical. Very skeptical. Skeptical that it’s worth the cost; skeptical that Republicans would actually learn the correct lesson from it.
Part of that is that Klein thinks the coin isn’t much better than default, since it would be a “banana republic” solution to the crisis (Philip Klein calls it a “massive power grab“). I don’t buy it. We create money all the time, so there’s nothing special about that. It has to be legal — but Ezra Klein believes that it would be legal. That something about it sounds silly? Well, that’s perhaps a public relations issue, but that’s all.
Or perhaps — it’s not quite clear — what he objects to isn’t the coin itself, but that using the coin would disguise that the US has become a “banana republic witnessing a full-blown meltdown of our treasured system of governance.” I guess I just don’t see that. As long as the law provides for a perfectly legal, legitimate, solution to the situation, then it’s not really a “meltdown” of the “system of governance.” It’s just a dodge, or a kludge, or relying on the redundancy of that system. You can’t get more in keeping with the US Madisonian system than that.
Which is not to say that it’s ideal in any sense. It’s a big, serious problem that the Republican Party is broken, and it’s going to have negative consequences. But the responsible thing to do is to attempt to minimize the consequences, not embrace them.
Now, all that said, when and how to deploy extraordinary measures to beat the debt limit depends on one’s read of the negotiating situation. If Greg is right and Republicans are bluffing, then I agree it would be foolish to give them anything, even cover for a retreat. Wait until they really do blast through to do anything, and even then perhaps wait a bit to see if they’ll fold. On the other hand, if you think they’re really that crazy, then embracing the coin early is a way of undermining the threat. Is the cost worth it? Sure — the president is at 56% approval and John Boehner, well, isn’t; under that circumstance, it shouldn’t be hard for the White House to spin the coin as a fairly normal, ordinary, legal, procedure, and to put the blame squarely on House Republicans. Or maybe not — but surely it would still be better than sacrificing the economy to “prove” that it’s the Republicans who are nuts. And after all, that could backfire, too.
So I’m not saying how it should be played, but the case against using the coin (or other measures) as needed just doesn’t seem very strong to me.
[Cross-posted at A plain blog about politics]