Oh man, have you kids been checking in with Scott Sumner lately?
==> Famous monetary economist Frederic Mishkin has now been seduced by the Dark Side.
==> Sumner thinks the trillion dollar coin is bad for the Democrats politically, but if Obama “ignores my advice and mints the coin anyway, I’ll strongly support the move since…it will be a sunk cost and I’ll try to minimize the damage by convincing the public that it’s better than default.”
==> You think maybe we should just give Scott’s ideas a trial run, maybe for two years, and then try something else if they don’t work out so hot? Well in a post with the ominous title “There’s no going back” Scott writes:
Once we shift to NGDPLT, there won’t be any going back, because NGDPLT is far superior to inflation targeting. Whenever inflation and NGDP diverge sharply, the Fed will be under tremendous pressure to target NGDP, not inflation. For instance, if inflation rises to 2.8% due to an oil shock, and output growth falls from 2.5% to zero, the Fed will cut rates, not raise them as inflation targeting would imply. Eventually central banks will stop paying attention to inflation.
So, if you are against the central bank buying a trillion dollar coin from the government so it can evade limits on its ability to issue more public debt, and/or if you think the central bank ought to pay very close attention to (price) inflation, then you can understand why Sumner must be stopped…no matter the cost.