When I argued that we should nuke the Macondo well to seal the leak, people laughed at me. But we’re still talking about monetizing the 17th and 18th trillion dollars of national debt by minting a $2 trillion coin and walking it over to the Fed. That’s democracy for you.
Dave Weigel even asked the comm director at Standard & Poor’s whether “Minting the Coin” would lead to another debt downgrade for Fair Columbia. The answer — because the existentialists were right and the universe is fundamentally absurd — is “not really.”
So how would the ratings agency react if the next crisis — set for the end of February — was averted by the minting of a $1 trillion platinum coin? I asked John Piecuch, director of communications at Standard & Poor’s, whether. He cautioned that the agency wouldn’t go into too much detail gaming out a hypothetical. But he didn’t exactly ring the bells of doom.
“What our rating speaks to is the ability and willingness to pay the debt we rate, commercial debt, on time,” said Piecuch. “But policy that improves or detracts from the capacity of the government to pay its debt is also part of our analysis. Another thing to factor in here: S&P has five pillars that analysts look at in terms of sovereign ratings. One of them is the fiscal score, which includes the debt to GDP trajectory; one is the political score. In terms of the political aspect, the current acrimony over these issues is already incorporated into the rating, at the AA+ level.”
In other words, the ratings agency isn’t particularly worried about how the U.S. avoids default. It’s worried about the country’s ability to pay the bills. An effective end-run around the crisis, one that would pay the bills, might do the trick.
Part of me now hopes this will happen. If American decline is an inevitability, let’s at least make it an entertaining one.