READER TED NOLAN wonders what’s up with the Treasury Department’s sharply lower limit on Savings Bond purchases:

The annual limitation on purchases of United States Savings Bonds will be set at $5,000 per Social Security Number, effective January 1, 2008. . . .

The reduction from the $30,000 annual limit in effect for both series since 2003 was made to refocus the savings bond program on its original purpose of making these non-marketable Treasury securities available to individuals with relatively small sums to invest. Approximately 98 percent of all annual purchases of savings bonds by individuals are for $5,000 or less.

Seems odd to me, too. The announcement says the limit was last set at $5000 back in 1973. What, we’ve got so many people wanting to buy our debt that we can afford to be choosy?

UPDATE: Here’s a news story, though it doesn’t really say much that isn’t in the press release. Except this: “At a time when Americans are saving less than ever, the Treasury Department has lowered the amount that investors can spend on U.S. savings bonds in a year.” This seems like a bad idea, and I’d like to know more about the reasoning behind it. Plus this:

“Would you consider a person who buys a lot to be one of your best customers?” asked Daniel Pederson, a savings bond expert.

So why hurt your best customers?

His guess is that the strategy is to promote the sale of Treasury securities, instead of savings bonds.

Hmm.