How Rand Paul Could Have Profited From a Debt Ceiling Crisis He Helped Create

Senator Rand Paul is invested in a fund that would skyrocket in value if the United States economy were to default. He’d also like your vote for president.

According to personal financial disclosure forms, as of November 14, 2014, the Kentucky senator had between $1,001 and $15,000 invested in ProFunds’ Rising Rates Opportunity Fund Investor Class, or RRPIX for short. According to the fund’s website, RRPIX allows investors to “seek potential profits from Treasury price declines when interest rates increase.”

In other words, if the value of Treasury bonds were to drastically decrease, owners of RRPIX could reap significant profits. This maneuver of essentially betting against the US economy is known as “shorting T-bills.”

After the GOP ultimately agreed to raise the debt ceiling without securing such draconian cuts, Paul was furious. He lambasted House Republicans for having “retreated” after they passed a short-term debt ceiling extension in 2013. When the matter came up again later that year, Paul dabbled in debt ceiling trutherism, insisting that United States wouldn’t actually default if the debt limit were breached. He instead accused President Obama of trying “to scare people” about the economic impacts of a default.

In 2013, Paul again made the same demand. “I will not vote to raise the debt ceiling unless we get a balanced budget amendment to the Constitution,” he declared on Facebook.

During both showdowns, Paul never publicly discussed his own financial conflict of interest, and his interest in the debt ceiling was likely much more ideological and political than it was a gambit to boost his portfolio.

But when Paul filed his personal financial disclosure in the midst of the crisis, on August 13, his RRPIX holding was not listed among his assets. Anyone examining Paul’s finances in August 2013, therefore, might have assumed that Paul had sold off his RRPIX investment, since it had appeared on his previous annual disclosure.

Four months after Congress raised the debt ceiling, however, Paul filed an amendment to his annual report indicating holdings that had been left off his August filing. Among those holdings, on page five: an investment of between $1,001 and $15,000 in RRPIX.