Krugman Calls for the Ultimate Inflationary Scheme

I have been waiting for Paul Krugman to call for the “Ultimate Inflationary Solution” to our budget woes: have the Fed purchase short-term government paper on the PRIMARY market, something now prohibited by law. This is the Zimbabwean Solution, but Krugman seems to be serious:

But such action, we keep being told, is off the table. The statutes under which the central bank was established supposedly prohibit this kind of thing, although one suspects that clever lawyers could find a way to make it happen.

I have some commentary on my KIW blog.

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7:06 pm on October 24, 2011