Matt Levine’s Money Stuff: Financial Engineer the Debt Ceiling

Mint the premium bonds!

The dumbest thing in economics, the US government’s debt ceiling, is clattering into relevance again. Basically the US Department of the Treasury has to pay the US government’s bills, and to do that it issues debt, and every time it issues new debt it adds a little to the total amount of debt outstanding, and eventually the debt outstanding reaches some arbitrary number called the “debt ceiling.” And then Treasury can’t issue any more debt, unless Congress raises the debt ceiling. Which it can easily do — it’s just an arbitrary number! — but Republicans in Congress keep threatening not to, and ...