this is why I never write about macroeconomics

Here are four problems in the world:

If I told you we could solve all of them in one fell swoop, what would you say? Would you say “shut up about that fucking platinum coin“? Ha of course you would. But it’s not that! It’s this, from pseudonymous1 blogger Sonic Charmer:

Could the Treasury just get around the debt limit by selling super-high-coupon bonds? (Say, 30% …) So they auction at a huge premium and Treasury earns proceeds that are a multiple of face value. Face value = low = stay under debt ceiling since it’s based on ‘money borrowed’ which is face value (?), but proceeds = high = can pay the ‘bills we’ve racked up’ (spending plans). Tune sizes/coupons/durations as required.

So: tentatively endorsed. Prove him (and now me!) wrong and you win a prize, the prize being a catastrophic government default. Let’s rule out some easy objections: Read more »