For those who viewed negative interest rates as a bridge too far for central banks, it might be time to think again. Right now, in the United States, the Federal Reserve - supported both implicitly and explicitly by the Treasury - is on track to backstop virtually every private, state, and city credit in the economy. Many other governments have felt compelled to take similar steps. A once-in-a-century (we hope) crisis calls for massive government intervention. But does that have to mean dispensing with market-based allocation mechanisms?

Blanket debt guarantees are a great device if one...