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Politics : Mainstream Politics and Economics

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To: Thehammer who wrote (33549)

11/7/2012 12:07:43 PM

From: Wharf Rat

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If we were a credit risk, we couldn't get money for almost nothing.

the Moment
By: David Dayen Wednesday May 30, 2012 10:15 am

This is your occasional reminder that the US has the ability to borrow right now at just about the lowest rates in history. 2% for a 10-year Treasury bond was a dream; we’re now in the range of 1.64%. The reasons for that are actually not auspicious: fear over potential economic headwinds have caused a flight to safety in the bond markets, with almost every country in control of their currency seeing their borrowing rates drop. But in the context of a country with stubbornly high unemployment, this is a gift. The markets are begging the United States to borrow more – offering real negative interest rates over a ten-year horizon. The US can use that borrowed money to jumpstart hiring and make a significant dent in the jobless rate. And they can pay back the money, again, AT A NEGATIVE INTEREST RATE, adjusted for inflation. There’s no good reason not to do this, which of course is why we’re not doing it.

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