Go look at the actual interest rate the government pays. You can figure that out by looking at the rate of return on T-bills, T-notes, T-bonds, etc. I'll wait.
The basic premise of your argument is apparently an old CBO projection of rising interest rates. The government sets the rate of return on its debts, and the American people and governmental organizations are clamoring to buy up that debt that the interest rates on this debt is as low as it's ever been.
Inflation rates have been extraordinarily low over the past few years, but the interest rates the government is paying on its debt has been *below* that rate.
I'm afraid you're just trying to convince yourself.
Don't forget that over the last 3 years, the Republican house has managed to cut $600 million from embassy security. Of course, I'm sure that has nothing to do with the recent deaths at the embassy.
Though many complain about defense expenditure for FY 2013 defense spending is projected to be only about 3.6 times the cost to service the debt. The cost to service the debt is projected to be about 1.8 times projected expenditure on education. A heavy price to pay to stabilize(?) the dollar.
Though many complain about defense expenditure for FY 2013 defense spending is projected to be only about 3.6 times the cost to service the debt. The cost to service the debt is projected to be about 1.8 times projected expenditure on education. A heavy price to pay to stabilize(?) the dollar.
And again, the government is currently *gaining* real value through it's borrowing. What the government is currently doing is taking out a mortgage at an incredibly low interest rate and investing that money at a slightly higher interest rate. The government is *gaining* real value on that arbitrage.
Typical market rules suggest that when a borrower massively increases his debt, it creates a larger risk to the creditor, and the creditor responds by increasing the interest rates he charges that creditor. Except that hasn't happened. Government debt is paying out at record low rates.
Basically, when everything you know about the market says one thing should be happening, and, in fact, something completely opposite is actually happening, the problem is not with the market, but with your understanding of the market.
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We work together every damn day. --Jon Stewart
Banks are sitting on $1.5 trillion rather than assuming risk for low interest mortgages and are beginning to purchase securities with the excess. Banks need interest to make loans and run of the mill citizens seek interest for savings. My CDs have negative earnings as they will purchase less at maturity than at the present due to real inflation (which the government refuses to measure).
Banks are sitting on $1.5 trillion rather than assuming risk for low interest mortgages and are beginning to purchase securities with the excess. Banks need interest to make loans and run of the mill citizens seek interest for savings. My CDs have negative earnings as they will purchase less at maturity than at the present due to real inflation (which the government refuses to measure).
Are you seriously trying to argue that because you're not able to earn money on CDs, it's the government's fault and not your own?
Yes, if you're invested in CDs, you will lose wealth as the interest rate on CDs is less than the inflation rate. Even with the low rate of return on t-bills, bonds, and notes, you're probably better off with them than CDs. I've got a higher rate of return on my savings account than on the CDs offered by my bank for anything less than 60-month terms.
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We work together every damn day. --Jon Stewart
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