Everything you need to know about the debt ceiling in one post - By Ezra Klein and Dylan Matthews
What it is: The debt ceiling is a legal cap on the amount of money the Treasury can borrow to fund existing government functions. It essentially authorizes the Treasury to borrow the money necessary to pay the bills incurred by the federal government.
Where it came from: Before 1917, Congress authorized the Treasury to issue bonds for specific purposes. But that meant approving every bond separately. To fund World War I, Congress decided to give the Treasury more latitude by instituting caps on how much it could borrow through each type of bond, rather than forcing it to get every new bond approved separately. In 1939, this was changed so that most bonds were bound by the same limit, effectively creating the general debt ceiling we have today.
- Stewart Cowley, The Bond-fund Manager Who Can't Stand Bonds
Thanks to Matt for passing this along. Stewart Cowley manages $1.5 billion in the Old Mutual (ODMTY) Global Strategic Bond Fund. One place he generally avoids investing that money: bonds. Mr. Cowley doesn't hold conventional U.S. Treasury bonds. He...
- Hoisington Q2 2013 Letter
The secular low in bond yields has yet to be recorded. This assessment for a continuing pattern of lower yields in the quarters ahead is clearly a minority view, as the recent selling of all types of bond products attest. The rise in long term yields...
- Howard Marks Memo: It’s All Very Taxing
The issue is simple: the U.S. government generally spends more than it brings in . . . and recently, a lot more. For years Congress was willing to serially raise the federal debt ceiling and monetize the deficit. But this past summer, some legislators...
- Grant Says U.s. Debt Crisis Contrived, Will Be `unstuck' (video)
July 18 (Bloomberg) -- James Grant, publisher of Grant's Interest Rate Observer, talks about negotiations between U.S. lawmakers over raising the federal debt ceiling and reducing the budget deficit. Grant also discusses the Treasury market, the gold...
- 1991 Moneychanger Interview With John Exter
Thanks to Will for passing this along after seeing John Exter quoted in the Op-Ed piece from Jim Grant.MONEYCHANGER You recognised very early that one major problem with Keynesianism was its reliance on debt. EXTER That’s what my upside-down debt pyramid...