<\/p>\n
The\u00c2\u00a0$1 trillion platinum coin<\/a> seems too wacky; the 14th amendment<\/a> too risky. But could IOU’s be the solution to an impasse on raising the nation’s borrowing limit?<\/p>\n Yes, and President Obama should publicly adopt the idea, Edward Kleinbard, a University of Southern California law professor and former chief of staff to Congress\u00e2\u20ac\u2122s Joint Committee on Taxation, argues in a\u00c2\u00a0Thursday\u00c2\u00a0New York Times<\/em>\u00c2\u00a0op-ed<\/a>. If lawmakers can\u00e2\u20ac\u2122t reach an agreement before the nation hits its debt ceiling–which could happen as soon as next month–then Obama should have a backup plan of issuing IOU’s in place, Kleinbard argues.\u00c2\u00a0<\/p>\n \u00e2\u20ac\u0153[Obama] should threaten to issue scrip\u00e2\u20ac\u201d’registered warrants’\u00e2\u20ac\u201dto existing claims holders (other than those who own actual government debt) in lieu of money. Recipients of these I.O.U.\u00e2\u20ac\u2122s could include federal employees, defense contractors, Medicare service providers, Social Security recipients and others.\u00e2\u20ac\u009d<\/p>\n Kleinbard is hardly the first to propose the idea. Slate\u00e2\u20ac\u2122s Matt Yglesias\u00c2\u00a0suggested it<\/a>\u00c2\u00a0in early December. And\u00c2\u00a0New York Times<\/em>\u00c2\u00a0Op-Ed columnist and Nobel Prize winner Paul Krugman\u00c2\u00a0argued for such IOU\u00e2\u20ac\u2122s on Monday<\/a>, though he called them \u00e2\u20ac\u0153Moral Obligation Coupons.\u00e2\u20ac\u009d In Krugman and Kleinbard, the idea has found two prominent proponents.<\/p>\n Without congressional intervention, the government is expected to reach its debt ceiling in the second half of February, the Bipartisan Policy Center predicts. The only thing preventing a devastating national default, which could have ripple effects around the globe, are a handful of hail-mary proposals:<\/p>\n