Churn on short term borrowing. Imagine if the government has $500 billion of its debt in 30 day treasury bills. Since those have to be refinanced every month just staying even (not counting interest) would be $6 trillion of money coming in on borrowing and going out on paying mature bills during the year.
Right now we should be doing everything possible to push the $16 trillion debt on to 30 year bonds even if the interest right now is higher. But that would make sense, so it won't be done.
Wasn’t that part of Clinton’s “surplus”? High interest debt from the 1970s and early 1980s were rolled into lower interest debt in the 1990s. Same debt level but lower interest rate meant lower payments required, making the “deficit” become a surplus. Like refinancing a house and now having more money each month.
Absolutely - depending on short term borrowing is never good since a disruption in world markets could suddenly make selling short term obligations difficult if the US Treasury is ever perceived as anything but the safest place to park money.