A couple weeks back, your humble correspondent was on a conference call organized by Rep. Kevin McCarthy (R-CA). One of his guests that day was Rep. Mark Kirk (R-IL).

The most fascinating part of the discussion was Rep. Kirk’s description of his visit to the Bureau of the Public Debt to watch a debt auction…. and his discussion with folks there about the implications that would flow from the failure of such a debt auction (follow the above link to read the description of it all – it’s quite fascinating).

If you read that through, you’ll get to the “nightmare scenario” (in 90 seconds) associated with such a failure.

And perhaps that nightmare scenario is closer than we have expected….

More below the fold….

Tucked deep inside Mark Steyn’s weekend column is this interesting bit of information:

Last week, at the official British Treasury auction, investors failed to buy the full complement of so-called “gilt-edged” 40-year bonds. Two such auctions have already failed in Germany. The U.S. Treasury, facing similar investor reluctance to snap up $34 billion of five-year notes, was forced to increase the interest it will pay on them.

This was the “nightmare scenario” that Rep. Kirk (R-IL) mentioned in the conference call a couple weeks ago – and the January/February German failures came up in discussion, but the recent British failure is new news.

Funny thing, though. The grandiose spending plans rely on massive borrowing – but that won’t be possible if the debt can’t be auctioned.

That would be a short-term disaster. But perhaps over the longer-run it would be a blessing in disguise, as it would staunch the nonsense….

Interesting food for thought….