How Bad Is Biden Failing In The Debt Ceiling Fight? | Nathan Tankus | TMR

Economist Nathan Tankus joins the program to discuss the slow-motion disaster that is President Biden's handling of the recent debt ceiling crisis. The growing threat of a debt ceiling crisis calls for serious consideration of unilateral options by the White House to avoid an economic disaster. One prominent proposal suggests minting a trillion-dollar platinum coin and depositing it with the Federal Reserve, ensuring sufficient funds to pay the government's bills. While Treasury Secretary Janet Yellen has rejected this idea, citing the potential reluctance of the Fed to accept the coin, other options relying on the Federal Reserve's cooperation have emerged. These include issuing low face value, high coupon bonds or declaring the debt ceiling unconstitutional. The most straightforward option is the platinum coin, as it aligns with the Fed's basic responsibility of accepting deposits. The conversation around unilateral options has shifted focus to the Federal Reserve and Chair Jerome Powell, who has previously shown a willingness to take unconventional measures to avoid default. Powell's comments indicate that he would likely fulfill the Fed's legal responsibilities as a fiscal agent and support the Treasury Department in avoiding default. While there may be political blowback, the prospect of a federal default outweighs the potential risks. Thus, the White House should consider utilizing these alternative options if Republicans fail to pass a "clean" debt ceiling increase, as negotiation should not occur with hostage takers.

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