We Have No Idea How the Treasury Pays Its Bills
Posted at 3 p.m. on Oct. 7, 2013
FT Alphaville looks at the “vague” and “opaque” system by which the federal government pays its bills.
“Certainly the Treasury department has emphasised the logistical complexity as much as the legal and political dubiousness of prioritizing payments. It has little choice, of course, but at this point I’m finding it difficult to know what to believe… Murky stories and indiscrete quotes about payment contingency plans occasionally see daylight, but never anything detailed.”
“And yes, obviously Jack Lew has to be evasive about the possibility… Nevertheless it’s really striking just how little is widely known about how the Treasury department goes about the normally mundane business of paying its bills — and that this seemingly crucial knowledge didn’t become more accessible in the aftermath of either the 2011 or early-2013 debt ceiling showdowns.”