As of today, the Federal government can borrow money for 10 years for FREE. Why don’t we?

How extraordinary. The “real” interest rate on the 10 year bond is precisely zero. The nominal rate is slightly over 2%, precisely matching inflation. In other words, the market believes the probability that the U.S. will default on its long-term debt is zero. No chance at all. Zilch.

Here’s Professor Brad DeLong:

10-Year Real Treasury Rate at Zero

Daily Treasury Real Yield Curve Rates

Time for everybody who has publicly worried about “crowding out” or about the deficit raising U.S. interest rates to make their Apology to the Emperor, and be quiet for llife.

Advertisements

About Guy N. Texas

Guy N. Texas is the pen name of a lawyer living in Dallas, who is now a liberal. He was once conservative, but this word has so morphed in meaning that he can no longer call himself that in good conscience. Guy has no political aspirations. He speaks only for himself.
This entry was posted in Economic policy. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s