Brian Romanchuk — The U.S. Debt Limit (Preliminary Primer)

The debt limit in the United States is currently not an object of worry, but it represents one possible avenue to default. From the perspective of a non-American, it is rather difficult to understand how such a strange custom could arise. This article outlines very briefly the history of the debt limit, and then moves to discuss the risks associated with it. This issue underlines the argument that default risk in floating currency sovereigns is political risk, not financial....

Bond Economics
The U.S. Debt Limit (Preliminary Primer)
Brian Romanchuk

Tschäff Reisberg — Why can't the Treasury borrow directly from the Fed

Nice quote by FDR appointed Fed chair Marriner Eccles. Here's the punch line:

So it is an illusion to think that to eliminate or to restrict the direct borrowing privilege reduces the amount of deficit financing. Or that the market controls the interest rate. Neither is true.

Read it at This Episode of Life

Why can't the Treasury borrow directly from the Fed

by Tschäff Reisberg