Yeglesias getting closer to the problem

He is talking about infinitesimal subdivisions of debt, when he says:

"The idea of a profitable investment is a purely relative one. Lending money for a risky endeavor with an expected return of 0.3 percent doesn’t look so good when the Fed is offering a guaranteed return of 0.25 percent. But reduce that to a guaranteed return of zero percent or to a guaranteed loss of 0.5 percent and suddenly things look different."

The problem is obvious. In order to justify transaction costs for relative differences in returns of .25%; then the debt sold be very large indeed. The only place to get those economies of scale are the Federal Government. So, we end up with a system in which Congress extracts small payments from taxpayers in order to sell huge lots of debt. Unfortunately it is the taxpayers who do not have the yield to generate those interest payments.