The Washington Post told readers that a chart showing a spike in the interest rate on Treasury bills coming due on October 31 should scare us. The rate on short term notes has gone from near zero to around 0.29 percent. This is a huge hike in own percent, but it is still a pretty damn low interest rate.

The story here is pretty simple. These short term bills get much of their value from the fact that they are hugely liquid. Because of concerns over the debt ceiling they are no longer hugely liquid. Okay, this is not good news, but I just can't get that scared over this. The financial markets will not freeze and the economy will not shut down because the interest rate on these notes is getting close to 0.3 percent.

Pushing the government against the debt ceiling is not smart and not going to be good for the economy (unless it ends the dollar's status as the preeminent reserve currency), but we should refrain from telling horror stories.