Yes, Paul, Governments go broke during economic collapse

 It’s amazing how this whole crisis has been fiscalized; deficits, which are overwhelmingly the result of the crisis, have been retroactively deemed its cause.  Krugman reminds us

I am not sure it helps at all though. Huge parts of the economy are going bankrupt, governments are falling all around the globe. Whatever cause and effect, Congress is still going bankrupt. No amount of Congressional deficits can stop John Lockyer in California from firing up the Laser Printer and effectively seceding from the $15 trillion in Congressional debt.

But isn't this the theory expoused by Krugman? Independent monetary policy when the monetary domain is no longer sustainable?

Brad proposeses government debt, and Brad is right, he should get his paycheck from the Lockyer laser printer, not from DC digitized accounts.  Scott Sumner is correct, California should use its own monetary tools. Yglesias is correct, DC Dollars should remain in Wall Street and in Eric Cantor's district.

 And, they are all correct, Social Security is not bankrupting Congress, so California is perfectly willing to split SS, we take our share and DC can have theirs.  For states in the middle, it is up to them, you can have DC Digitized accounts or come join California and have Laser Money.