Problem
I. Dr. Cochrane says, "A flight from treasury collateral under a debt limit would be far worse. And the government's magic tonic, borrow a ton and bail everyone out, would be unavailable." Precisely how is the "magic tonic" captured (represented) in the AS-AD framework? And why would this be unavailable?
II. Speaking of "magic" or as Dr. Cochrane says "fun," how does issuing a trillion dollar coin - or, "printing money" - get around debt ceiling? Briefly and concisely explain.