why doesn't the us government do this to reduce debt

[the_tyrant]

instead of borrowing money from other countries, why doesn't the government do this:
sell more bonds, instead of paying other countries interest why not pay it to your citizens?
market it as "an investment in your country's future"

[Diopos]

Originally Posted by the_tyrant

instead of borrowing money from other countries, why doesn't the government do this:
sell more bonds, instead of paying other countries interest why not pay it to your citizens?
market it as "an investment in your country's future"

Because taxing your creditors shows bad manners!



.

[TarJak]

In before Obama.

Simply because it won't work. Doe some very basic economic study and you'll see why.

[SteamWake]

Also the fact that Bonds basically suck as an investment so there kind of hard to 'sell'.

Long duration, low return. Frankly you can earn better return by putting your money in a savings account.

About the only good thing about them is the tax deferrment and that will probably get stripped away as well.

[Takeda Shingen]

The United States already does this. 70% of the US bond market is through domestic bonds, ie the ones that you or I usually buy. Last year, the outstanding market bonds were worth $91 trillion US, a new record. The short answer to your question is that the bond market is inherently volitile which, in today's market, reduces the premiums paid for each bond. Personally, I used to invest substantially in them, but have more recently moved more capital into the money markets due to the fact that I have little faith in the long-term.

The bottom line is that many people do not trust the bond market, and they have little reason to do so.

[Happy Times]

The only way to reduce the present debts in US is inflation but the risk is it turning hyper.

[Oberon]

Originally Posted by TarJak

In before Obama.

Damn you!!

[mookiemookie]

Originally Posted by SteamWake

Also the fact that Bonds basically suck as an investment so there kind of hard to 'sell'.

Long duration, low return. Frankly you can earn better return by putting your money in a savings account.

About the only good thing about them is the tax deferrment and that will probably get stripped away as well.

I take it you mean U.S. savings bonds and not U.S. Treasury bills/notes/bonds.

[gimpy117]

because its better to be slaves to china's economy than too our citizens

[Platapus]

Originally Posted by the_tyrant

instead of borrowing money from other countries, why doesn't the government do this:
sell more bonds, instead of paying other countries interest why not pay it to your citizens?
market it as "an investment in your country's future"

I guess you are not aware that over 50% of the federal debt is owned by US persons, companies, States, and the Federal Government itself?

The federal government, itself, owns over 40% of our national debt.

http://upload.wikimedia.org/wikipedi...ted_States.gif

http://upload.wikimedia.org/wikipedi...egory_0608.jpg

[UnderseaLcpl]

Originally Posted by mookiemookie

I take it you mean U.S. savings bonds and not U.S. Treasury bills/notes/bonds.

Once again, you have confused me, Mark. Treasury bonds are hardly a better investment then savings bonds for the same reason; they're tied to the value of the currency, which is tied to the rate of inflation and the comparitive value of other currencies. Often, the interest rate doesn't outpace the rate of inflation or the comparitive devaluation of the dollar, making them poor investments.

From a macroeconomic standpoint, treasury notes are even worse because they rarely manage to purchase anything that is worth the cost of their production and the subsequent devaluation of the rest of the currency. You know the saying; "money doesn't grow on trees". I fail to see the investment potential in the long term on a personal or national level.

Don't take my word for it, though. There's a reason that major investors don't bother with treasury junk. The low ROI after taxation pretty much guarantees a negative retun.

[mookiemookie]

Originally Posted by UnderseaLcpl

Once again, you have confused me, Mark. Treasury bonds are hardly a better investment then savings bonds for the same reason; they're tied to the value of the currency, which is tied to the rate of inflation and the comparitive value of other currencies. Often, the interest rate doesn't outpace the rate of inflation or the comparitive devaluation of the dollar, making them poor investments.

From a macroeconomic standpoint, treasury notes are even worse because they rarely manage to purchase anything that is worth the cost of their production and the subsequent devaluation of the rest of the currency. You know the saying; "money doesn't grow on trees". I fail to see the investment potential in the long term on a personal or national level.

Don't take my word for it, though. There's a reason that major investors don't bother with treasury junk. The low ROI after taxation pretty much guarantees a negative retun.

Treasuries are one of the most liquid investments in the world. They do not necessarily offer a "long duration" (ignoring what the word duration means in an investment sense) as T-bills can be as short as 30 days. And yes, major investors do bother with Treasuries. I should know.

And Treasuries can be a fine investment on a total return basis.