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So, what is the correct amount of debt to carry?
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May 20, 2012 16:57
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Armyman25 posted:So, what is the correct amount of debt to carry? If my calculations are correct... ten.
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May 20, 2012 17:03
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Armyman25 posted:So, what is the correct amount of debt to carry? Generally its expressed as a ratio of Debt to GDP. 60-65% is. What I see listed as sustainable; but I'm not an economist so I don't know how that number is determined, and I suspect there are plenty of economists who will tell you a different number. Right now we are around 75% and most seem to agree that is too high. The key though is that fixing that number doesn't mean needing to run a surplus for years on end. It means running deficits that cause the nominal debt to increase more slowly than GDP increases.
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May 20, 2012 17:28
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Okay, can anyone source the whole Fannie and Freddie were going to be stopped 17 times by Republicans thing? All I can find was Chuck Hagel's bill for their regulatory structure to be evaluated in 2006 that didn't go anywhere because other reviews of their structure proved favorable.
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May 20, 2012 17:29
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Sarion posted:Generally its expressed as a ratio of Debt to GDP. 60-65% is. What I see listed as sustainable; but I'm not an economist so I don't know how that number is determined, and I suspect there are plenty of economists who will tell you a different number. Right now we are around 75% and most seem to agree that is too high. The key though is that fixing that number doesn't mean needing to run a surplus for years on end. It means running deficits that cause the nominal debt to increase more slowly than GDP increases. Having an economy strong enough to run surpluses for years on end would certainly help though. Getting debt down to zero is actually a frightening thought that the Clinton administration had to start thinking about. A world with no treasury bonds would be unprecedented in modern finance and possibly wreck the international bond market and leave the Fed spinning its wheels helplessly. Also, Paul Krugman would be quick to point out that Japan's Debt to GDP ratio is over 200% and they are still borrowing at interest rates below 2%. Obviously we'd like to avoid that situation, but sovereign debtors, i.e. countries that borrow in their own currency, are incredibly resilient to high debt levels. The great defaulters (Argentina, Greece) all borrowed in someone else's currency.
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May 20, 2012 17:37
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Blindeye posted:Okay, can anyone source the whole Fannie and Freddie were going to be stopped 17 times by Republicans thing? All I can find was Chuck Hagel's bill for their regulatory structure to be evaluated in 2006 that didn't go anywhere because other reviews of their structure proved favorable. Given that Freddie and Fannie have nearly gently caress-all to do with the housing crisis, then I would say any efforts by Republicans to "stop them" was nothing more than a red herring and political ploy, even if it were true.
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May 20, 2012 17:40
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kitten smoothie posted:Also, Obama's dog flies in his own jet This really bothers me. I'm sure it bothers all of you. I don't care about the story, but how they say "Barack Hussein Obama" We get it, you think he's a Muslim. Nobody says a president's name that way. We only called George Bush II "W" because otherwise it would confuse us with his dad! And we didn't call him George WALKER Bush everytime anyway. The only other one was John Quincy Adams, again to not confuse him with his dad. I understand that there are people who object to Obama for purely logical (and legitimate) reasons. Saying HUSSEIN marks you as a racist. (I didn't need to explain that to anyone in this thread it just bothers me  )
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May 20, 2012 18:12
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I like it. It's like a huge flashing *IGNORE THIS PERSON* sign.
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May 20, 2012 18:19
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Sarion posted:What's more, running a surplus is a bad idea too because it means that the Government is pulling money out of the economy through taxes and not reinvesting it in growth which then puts the money back into the economy in the short term and grows it in the long term. While running a surplus is nominally 'bad' for the economy, combining this with the fact that you can't take out more and more debt forever leads naturally to the Keynesian notion of countercyclical spending - you take on debt when the economy is bad in order to spur it going again, and you run surpluses when the economy is good, when it can 'take the hit,' in order to keep state finances in order for the next downturn. Do not, for the love of god, confuse "deficit spending is desirable during a recession" for "deficit spending is desirable always and forever." Sarion posted:The key though is that fixing that number doesn't mean needing to run a surplus for years on end. It means running deficits that cause the nominal debt to increase more slowly than GDP increases. Strudel Man fucked around with this message at 18:48 on May 20, 2012 |
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May 20, 2012 18:32
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TinTower posted:Whenever I hear someone use the Second Law to disprove evolution, I say "well, I agree. For evolution to occur on Earth there needs to be a massive source of energy that can cover the entire planet. Akin to this submission to FSTDT: You'll have to forgive me for pulling stuff a couple pages back but I've been catching up on this thread. The guy who originally posted that also posted a follow-up explaining why the sun doesn't count. I went to the original forum and found it, because I loathe myself. awesomestnerd posted:Sorry, my mistake guys, I didn't explain why the Sun doesn't count. Here is the info on that from ChristianAnswers.net: Also, in respect to that picture of Air Force One flying near the Statue of Liberty, why did a staffer get fired over that? Is it just because the imagery of a plane being that close to Manhattan is "too soon"? I can't imagine it was his decision on the flight path.
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May 20, 2012 18:48
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Arglebargle III posted:Having an economy strong enough to run surpluses for years on end would certainly help though. Getting debt down to zero is actually a frightening thought that the Clinton administration had to start thinking about. A world with no treasury bonds would be unprecedented in modern finance and possibly wreck the international bond market and leave the Fed spinning its wheels helplessly. Since you seem to be fairly knowledgeable about that stuff and I'm not, I'd like to ask: What is in it for the creditors, specifically those that don't actually make a profit by loaning that money? Is it really just that it's pretty much a 100% safe investment, that they are completely guaranteed to get that money back by the set date? I barely know anything about large-scale economics, so it kind of blows my mind that this certainity would be so unique to treasury bonds.
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May 20, 2012 19:10
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Perestroika posted:Since you seem to be fairly knowledgeable about that stuff and I'm not, I'd like to ask: What is in it for the creditors, specifically those that don't actually make a profit by loaning that money? Is it really just that it's pretty much a 100% safe investment, that they are completely guaranteed to get that money back by the set date? I barely know anything about large-scale economics, so it kind of blows my mind that this certainity would be so unique to treasury bonds.
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May 20, 2012 19:12
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While that response is funny enough for its complete misunderstanding of thermodynamics, biology, chemistry, and a few other sciences, and its abuse of moving the goalposts is rage-inducing, the best part is this line:quote:You were born perfect, now I don't mean perfect like muscly body and everything is the "normal" conditions. I mean perfect as in you haven't sinned. I doubt that anybody has come out of their mother and shouted the f word. The closest it comes to something I'm aware of is modern psychology and the idea of children each being a tabula rasa, a blank slate that is only corrupted later by the influence of the world. Moron can't get his own religion right. (Edit: by "modern" I meant a comparatively recent development, not that it's a tenet of actual psychology in modern practice. The blank slate theory has been disproven in so many ways it doesn't really get discussed much) Really though, I'm having trouble not dissolving into a puddle of spleen when the guy goes from "If 2nd Law, then how order from evolution?  " When it's pointed out that 2nd Law doesn't apply unless you include the entire sun and the unfathomable amount of entropy generated by it, suddenly the argument is "If sun, then how death?" I hate moving goalposts! 
DarkHorse fucked around with this message at 19:52 on May 20, 2012 |
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May 20, 2012 19:16
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Infants are entirely focused on themselves. They have to learn where the boundary between their body and the universe exists, and later, that people don't just exist to feed and nurture them. It's mostly the fact that toddlers are too weak to do much damage that mitigates their incredible propensity for violence. Kids are charming, but their egocentrism and lack of impulse control would be the hallmarks of a serious personality disorder in an adult. It's no wonder ancient societies came up with that the 'born a sinner' stuff. 
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May 20, 2012 19:30
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DarkHorse posted:While that response is funny enough for its complete misunderstanding of thermodynamics, biology, chemistry, and a few other sciences, and its abuse of moving the goalposts is rage-inducing, the best part is this line: Why are we still being held accountable for Adam and Eve's sin? This is a mostly serious question (although perhaps in the wrong thread). I'm not religious at all, is the reason just BECAUSE?
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May 20, 2012 22:15
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myron cope posted:Why are we still being held accountable for Adam and Eve's sin? This is a mostly serious question (although perhaps in the wrong thread). I'm not religious at all, is the reason just BECAUSE? Because they need an explanation for why Gods "perfect" design suffers horribly in childbirth. The only alternative is God is a spiteful dick. But the story of passover supports that argument too...
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May 20, 2012 23:06
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myron cope posted:Why are we still being held accountable for Adam and Eve's sin? This is a mostly serious question (although perhaps in the wrong thread). I'm not religious at all, is the reason just BECAUSE? http://www.vatican.va/archive/ccc_css/archive/catechism/p1s2c1p7.htm Catholic Catechism posted:The consequences of Adam's sin for humanity Armyman25 fucked around with this message at 23:09 on May 20, 2012 |
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May 20, 2012 23:07
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Spalec posted:Because they need an explanation for why Gods "perfect" design suffers horribly in childbirth.
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May 20, 2012 23:24
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RoboChrist 9000 posted:Because keeping a grudge for six thousand years and holding every single human being responsible for the crimes of two of their ancestors doesn't suggest God is a spiteful dick?
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May 20, 2012 23:26
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Arglebargle III posted:Having an economy strong enough to run surpluses for years on end would certainly help though. Getting debt down to zero is actually a frightening thought that the Clinton administration had to start thinking about. A world with no treasury bonds would be unprecedented in modern finance and possibly wreck the international bond market and leave the Fed spinning its wheels helplessly. Debt-to-GDP isn't really a useful figure and can be actively harmful though (UK posters will remember that graph the Tories were touting around before the election "proving" the UK was in worse shape than Greece et. al. because we were carrying higher debt as a ratio of GDP). 200% of GDP when it's at 1 or 2% and your economy is growing at or higher than that rate isn't a problem. 50% or less of GDP at 10% when your economy is contracting will gently caress you up in short order. Like you say, other factors like the currency you've borrowed in and your currencies relation to it are really important too. It also depends what you're doing with that debt (and this is the only place where the household debt comparison is useful). A country borrowing 10% of their GDP to build infrastructure (or even to bail out a ridiculously corrupt banking system that threatened to take down the whole world economy with it) is a very different beast from a country borrowing 10% of their GDP to rectify a current account deficit (for example caused by cutting taxes and going to war twice in 2 years on the other side of the world...).
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May 20, 2012 23:35
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RoboChrist 9000 posted:Because keeping a grudge for six thousand years and holding every single human being responsible for the crimes of two of their ancestors doesn't suggest God is a spiteful dick? You know how the abusive one in a relationship screams how you'll never do better, slaps you around and then asks why you make Him hurt you? It's like that times a billion. Why is there pain and suffering, Lord? BECAUSE YOU MAKE ME DO THIS TO YOU. YOU MAKE ME DO THIS TO YOU!
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May 21, 2012 00:10
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I always saw it as sorta like a genetics thing, passes down to every human from Adam. I'm not religious but I think anyone will admit we are predisposed to "sin" on alot of occasions. Now we're not going to murder anyone but who hasn't been tempted to steal something small on a few occasions? (This doesn't even count that "sin" is a relative term that varies from culture to culture). The idea is that we're predisposed to do bad things sometimes, because we're not perfect, and society/God teaches us to not do these things. Not every Christian sect believe you must worship "The One True God" to be saved. The Catholic Church of all institutions believes you can get into Heaven even if you don't believe in God just by not being a dick.
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May 21, 2012 01:28
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The reason for it is to solve the problem of theodicy: why bad things happen to good people when there's an omnipotent, omniscient, and omnibenevolent god. I'm not really a fan of the explanation, but when you're starting from the point that God exists and has those three qualities you have to come up for some reason why things suck.
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May 21, 2012 01:57
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Perestroika posted:What is in it for the creditors, specifically those that don't actually make a profit by loaning that money? Is it really just that it's pretty much a 100% safe investment, that they are completely guaranteed to get that money back by the set date? I barely know anything about large-scale economics, so it kind of blows my mind that this certainity would be so unique to treasury bonds. The certainty is part of it, since sovereign debtors have no real reason to ever default on their debts or even miss interest payments because they can always print money to cover it. A big factor is that some investors have truly huge amounts of dollars lying around that they can't or won't sell for a variety of reasons. Parking that enormous amount of money in U.S. Treasuries makes a lot of sense because it's a guaranteed way to make about enough interest to keep up with inflation. For example China, because of its huge trade surplus with the U.S. has a zillion dollars just sitting around. They can't sell them without hurting the value of the dollar, which they don't want to do for trade reasons, but if they literally sit on them they will lose value. China also really can't afford for the U.S. to run out of money, because then who will buy its exports? So China parks truly enormous amounts of money in U.S. Treasuries. It gets to keep its dollar assets at the same real value over time through interest payments, and it makes sure that the U.S. has enough money to keep buying Chinese products. This is the huge "in hock to China" debt that people like to get worked up about by the way. It's a result of China having huge dollar assets that need a home, not some sort of crafty Chinese ploy. If China refused to roll over all those t-bills tomorrow it would have gobs and gobs of dollars and suddenly nowhere to put them, and the U.S. would probably print money, so either way the value of the dollar would go down and China would lose a lot of money while simultaneously hurting its export trade with the U.S. This is why Paul Krugman remarked "China has an empty water pistol to our heads." in response to the panicked "China has a gun to our heads." pundits. Also just for reference China holds I think 7% of U.S. debt, while again Americans hold 70%. Pundits of course do not mention this, they just say "biggest creditor" because it is technically true. The talking heads on TV want you to be scared so you'll keep watching and so you'll be more receptive to their political ideas, and if you have to stay ignorant to be scared then by god they'll keep you ignorant. Arglebargle III fucked around with this message at 05:34 on May 21, 2012 |
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May 21, 2012 05:28
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Arglebargle III posted:The certainty is part of it, since sovereign debtors have no real reason to ever default on their debts or even miss interest payments because they can always print money to cover it. A big factor is that some investors have truly huge amounts of dollars lying around that they can't or won't sell for a variety of reasons. Parking that enormous amount of money in U.S. Treasuries makes a lot of sense because it's a guaranteed way to make about enough interest to keep up with inflation. I wasn't old enough to be aware of it, but was the xenophobic rhetoric towards Japan in the late 1970s and 1980s similar to that towards the Chinese today? From what little I know of it from history books, the rhetoric looks at least kind of similar.
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May 21, 2012 11:40
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It was worse. Go watch Back to the Future II or whatever. In the 80s everyone knew the Japanese were about to take over the world for poorly articulated reasons.
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May 21, 2012 12:10
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Arglebargle III posted:It was worse. Go watch Back to the Future II or whatever. In the 80s everyone knew the Japanese were about to take over the world for poorly articulated reasons. We beat them Japs in the forties and now they're trying some sneaky long term revenge plan! 
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May 21, 2012 12:18
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Sarion posted:Generally its expressed as a ratio of Debt to GDP. 60-65% is. What I see listed as sustainable; but I'm not an economist so I don't know how that number is determined, and I suspect there are plenty of economists who will tell you a different number. Right now we are around 75% and most seem to agree that is too high. The key though is that fixing that number doesn't mean needing to run a surplus for years on end. It means running deficits that cause the nominal debt to increase more slowly than GDP increases. PerniciousKnid previously posted:The correct question is about, not the affordable notional amount of debt, but the amount of debt interest payments the US could afford. PerniciousKnid fucked around with this message at 12:47 on May 21, 2012 |
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May 21, 2012 12:44
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Strudel Man posted:God, no. The dangers of debt may be somewhat overblown, but a country cannot run deficits forever without issue; a favorable rate of interest is not no interest. As of 2011, we were spending $227 billion, 6% of the federal budget, on interest, and I'm sure everyone can think of something that they'd rather use that money for. We already spent that money though. We already got something out of it and continue to benefit from it (presumably). Just because we're paying for it later doesn't mean we could have spent it better. Now, I will agree that in this case you're probably right, because that $227B is probably mostly paying for tax breaks for the wealthy and two wars; neither of which is beneficial to us. But generally, if it's spent well than paying for it later shouldn't be seen as some waste that provides us with no benefit. Sure you could argue the interest itself isn't any real benefit, but since the interest rates are so low, we're practically paying it back at cost. When you factor in inflation, its possible for us to be paying it back below cost. Strudel Man posted:While running a surplus is nominally 'bad' for the economy, combining this with the fact that you can't take out more and more debt forever leads naturally to the Keynesian notion of countercyclical spending - you take on debt when the economy is bad in order to spur it going again, and you run surpluses when the economy is good, when it can 'take the hit,' in order to keep state finances in order for the next downturn. But what's the point of the Surplus? It's just pulling money out of the economy, the debts already have a fixed payment schedule. I guess we could use the Surplus to buy up T-Bills and then just forgive the loan to ourselves or something? Can they even be paid off early? In any case, I still think its a waste. We collectively have access to extremely cheap credit, credit which can be used to invest in infrastructure, education (both K-12 level, and helping more people get through college), and research. All of which pay off in the long run at much better rates than the 1-2% interest we'll be paying for them. Using the debt for boneheaded bullshit like pointless wars and tax cuts for the rich are obviously very bad uses of the debt. In bad times that spending obviously has to be ramped up. Increased social spending, assistance to the States to prevent State employee cut backs, increased infrastructure spending. All to help spur the economy back out of a recession. But then you cut back in the good times. But that doesn't necessarily mean cutting all the way back to a surplus. We can still make use of the cheap credit to invest in the economy. For example, if our annual debt payments were $500B and we ran a $250B defecit in a good year, then we'd be lowering our total debt in both real and nominal terms. Strudel Man posted:The US's annual GDP growth over the past decade has been about 2%, with some rather large upswings and nasty drops. U.S. debt is already over 100% of GDP. Even if we took on literally no new debt at all, it would take 25 years for economic growth to drop that to 60% of GDP. The risk of another significant economic disturbance in that time which would require substantial additional debt is, to put it lightly, high. That's total debt. I should have been more specific, I'm talking about Public Debt. Total debt includes Intragovernmental debt. Every year payroll taxes are collected to pay for Medicare and Social Security for that year, and there's usually a surplus. That surplus is set aside to help pay for future Medicare and Social Security obligations in years when payroll tax revenues fall short. Of course, sticking them in a checking account would be stupid cause then that cash would be eaten away by decades of inflation. So instead the Government takes that surplus and buys T-Bills with it so that the Medicare and Social Security trust funds collect enough interest to fend off some/all of the effects of inflation. We don't want to pay off this portion of the debt, we want to keep paying interest on it so that there's enough money in the trust funds to still be useful when we need it later. Anyways, that part of our debt, debt the government owes to itself, is roughly $4.5T. Our Public Debt, the debt we have incurred by spending more than we take in in taxes, is around $11T. Compared to our GDP of around $15T, that's about 75% Debt to GDP. That's the portion of our debt that it is suggested should be 60-65%. PerniciousKnid posted:The sustainability of debt is determined by the amount of the payments, not the principal. If the payments are zero you can sustain unlimited amounts of debt. I would agree with this too. Someone asked, "how much debt should we carry", and my answer was that its not a fixed amount but rather relational to GDP. 60-65% is what I've read most commonly, for the US. Every country is different and can carry different amounts of debt. The amount that's acceptable for the US is of course dependent on the interest rate the US is expected to get. But measuring it in terms of annual payments with respect to GDP would work, too. Of course, the two are linked, since the size of the payment is related to both the principle and the interest rate. As goddamnedtwisto pointed out already, if our interest rates suddenly shifted to 10%, we'd be boned with the debt we have now. I think both work, and Debt to GDP is what I see more often. However, I would say Payment to GDP is probably a better measure than pure Debt to GDP, since it factors in the interest and principle together. It's just not one I've seen offered around before.
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May 21, 2012 16:14
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Sarion posted:Anyways, that part of our debt, debt the government owes to itself, is roughly $4.5T. Sometimes, none of this makes any sense at all. Debt we owe to ourselves  (I get that somewhere it makes sense, it's just beyond my non-economist brain)
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May 21, 2012 17:45
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On the topic of debt, while this isn't a forwarded email, I ordered chinese takeout last night and was greeted with this inside my fortune cookie. It's pretty hard to read thanks to my old-rear end phone, but it says "Blessed are the children, for they shall inherit the national debt." I mean c'mon, seriously? A loving fortune cookie now?
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May 21, 2012 18:32
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myron cope posted:Sometimes, none of this makes any sense at all. Debt we owe to ourselves The social security trust fund operates by buying treasuries, meaning that since it is a government program it is effectively the government just writing IOUs for future social security payments. I would say it is fair to call this debt since it really should be paid back as it becomes necessary. It is also handled by different arms of the government, and social security really cannot possibly place the money anywhere else either way. Right-wingers tend to simultaneously claim that social security is bankrupt and that the debt is the full 15+ trillion though, which is obviously dishonest since at most one of those are true (which one depends on whether you expect the government to make good on SS or not).
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May 21, 2012 18:35
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Sarion posted:We already spent that money though. We already got something out of it and continue to benefit from it (presumably)...When you factor in inflation, its possible for us to be paying it back below cost. In any case, when debt is used to finance everyday government operations (the way it is with our current, substantially underfunded federal expenditures), it becomes quite arbitrary which spending in particular you count as being funded by the debt. You could claim that we're using the debt to finance our military expenditures, or that we're using it to finance grants to schools - but in reality, it's just being used to keep the engine running overall. quote:But what's the point of the Surplus? quote:All of which pay off in the long run at much better rates than the 1-2% interest we'll be paying for them. Using the debt for boneheaded bullshit like pointless wars and tax cuts for the rich are obviously very bad uses of the debt. The answer, of course, is that it doesn't pay off at better rates - at least, not with any reliability. Much of what debt can pay for is socially desirable without being directly economically advantageous to the federal government. quote:For example, if our annual debt payments were $500B and we ran a $250B defecit in a good year, then we'd be lowering our total debt in both real and nominal terms. quote:That's total debt.
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May 21, 2012 19:50
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Countblanc posted:On the topic of debt, while this isn't a forwarded email, I ordered chinese takeout last night and was greeted with this inside my fortune cookie. Listen man they have lucky numbers right there. They're giving you a problem and a solution.
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May 21, 2012 19:52
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myron cope posted:Sometimes, none of this makes any sense at all. Debt we owe to ourselves Yeah, it's screwy. The government routinely takes in more in Payroll taxes than it pays out in Medicare/Social Security payments. So it puts the left over money into a Medicare Trust Fund and Social Security Trust Fund. Rather than letting the money sit there for decades doing nothing, they use it buy Treasuries. This lets the government put the money to work now, and keeps away losses due to inflation. It just hurts sometimes to think that the largest single owner of US Federal Debt, is the US Federal Government. Also, like Cybernetic Vermin pointed out, it makes the "Social Security is bankrupt" and "the Debt is $15T" claims incompatible. Generally though, Intragovernmental debt is treated separate from Public debt. Part of the reason being that we don't actually want the Intragovernmental Debt to go down. If you think about it, if we "paid off" that $4.5T we owe to Social Security, it would mean we had to have paid out all the excess funds to Medicare/SS recipients. Not that its totally wrong to say we have $15T in debt either. It's just that part (33%) of the debt is weird and doesn't really work the way we usually think of. Oh, you can put this down as another way US Debt is not like household debt. Out of the maybe $300,000 in debt my family has, I don't owe $100,000 of it to myself. Countblanc posted:On the topic of debt, while this isn't a forwarded email, I ordered chinese takeout last night and was greeted with this inside my fortune cookie. I thought the Chinese wanted us to take on MORE debt, so that we will become their slaves later! 
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May 21, 2012 20:07
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Arglebargle III posted:China also really can't afford for the U.S. to run out of money, because then who will buy its exports? So China parks truly enormous amounts of money in U.S. Treasuries. It gets to keep its dollar assets at the same real value over time through interest payments, and it makes sure that the U.S. has enough money to keep buying Chinese products. Just to expand on this, the Communist Party leaders are deathly afraid of unemployment. If the US suddenly stopped buying Chinese exports, they would have hundreds of thousands of unemployed people rioting in the cities. Walk into any retail store in Beijing, and they already have more employees than they need. One person helps you pick out what you want, then you bring that to another person. They give you a receipt, which you a bring to a third person, who you actually pay for the product. It's also why China continues to support North Korea. NK is a huge diplomatic pain in the rear end for China, but if it collapses, low-skill refugees will flood into China.
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May 21, 2012 20:17
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Countblanc posted:On the topic of debt, while this isn't a forwarded email, I ordered chinese takeout last night and was greeted with this inside my fortune cookie. I've been getting this particular gem in fortune cookies every now and then for the last 20 years or so, if not longer.
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May 21, 2012 20:26
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Also, as I've been told by family members, the Bureau of the Public Debt HQ is in...CHINATOWN! They LITERALLY sell our debt to Chinamen in CHINATOWN! Actually it's a few blocks away from there in the Shaw neighborhood, I believe, but that doesn't hammer home the YELLOW PERIL.
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May 21, 2012 21:33
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Strudel Man posted:Unlikely. A rate of interest less than the rate of inflation wouldn't provide much in the way of buyers. Or, since treasury bills are sold at auction, will result in lower revenues from the issuance of debt, due to buyers being unwilling to take a loss. Except they literally do. Inflation is currently around 2-3%. 10-year treasuries are currently under 2%, and shorter bills are paying <1% interest. The important thing is that you're losing less than if you were to just sit on the money, which is really the only other option for a lot of the investors who buy T-bills.
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May 21, 2012 22:55
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Jabor posted:Except they literally do. Inflation is currently around 2-3%. 10-year treasuries are currently under 2%, and shorter bills are paying <1% interest. Strudel Man posted:Or, since treasury bills are sold at auction, will result in lower revenues from the issuance of debt
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May 21, 2012 23:13
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