U.S. borrowing costs reach record lows

[DomoArigato]

While the sheeple get worked into a frenzy by the political elites, the MSM, and the clowns at S&P over the non-existent debt crisis, U.S. borrowing costs have reached record lows. In fact, the latest U.S. notes and bond auction resulted in a savings of $647 million:

http://www.businessweek.com/news/2011-08-12/treasury-saves-647-million-in-first-bond-sales-after-s-p-cut.html

The unfortunate part is that the U.S. does have real problems that are completely unrelated to deficits: massive unemployment and underemployment, child poverty rates above 20%, and an underfunded education system.

Here is California, the once-great state university system is being gutted. The best professors are going to other universities, class sizes are rising, and tuition is going up:

http://www.pe.com/localnews/sbcounty/stories/PE_News_Local_D_ucrcuts20.3a24866.html

But never mind all that because LOOK! OVER THERE! INVISIBLE BOND VIGILANTES!

[EconProf]

I hope you are not taking comfort in the fact that the government’s servicing costs on our debt is low because of (temporarily?) low interest rates. This is disguising the true long term cost of our growing indebtedness. Servicing costs are part of our annual expenses, and low interest rates serve to keep our current deficit lower than it would normally be. If interest rates simply return to the average of the past ten years, our debt service costs will soar.
Add to this the fact that Treasury is loading up on short term debt (lower interest rates) instead of issuing longer term instruments, and we have one more example of short term expediency.

[EconProf]

I hope you are not taking comfort in the fact that the government’s servicing costs on our debt is low because of (temporarily?) low interest rates. This is disguising the true long term cost of our growing indebtedness. Servicing costs are part of our annual expenses, and low interest rates serve to keep our current deficit lower than it would normally be. If interest rates simply return to the average of the past ten years, our debt service costs will soar.
Add to this the fact that Treasury is loading up on short term debt (lower interest rates) instead of issuing longer term instruments, and we have one more example of short term expediency.

[EconProf]

I hope you are not taking comfort in the fact that the government’s servicing costs on our debt is low because of (temporarily?) low interest rates. This is disguising the true long term cost of our growing indebtedness. Servicing costs are part of our annual expenses, and low interest rates serve to keep our current deficit lower than it would normally be. If interest rates simply return to the average of the past ten years, our debt service costs will soar.
Add to this the fact that Treasury is loading up on short term debt (lower interest rates) instead of issuing longer term instruments, and we have one more example of short term expediency.

[EconProf]

I hope you are not taking comfort in the fact that the government’s servicing costs on our debt is low because of (temporarily?) low interest rates. This is disguising the true long term cost of our growing indebtedness. Servicing costs are part of our annual expenses, and low interest rates serve to keep our current deficit lower than it would normally be. If interest rates simply return to the average of the past ten years, our debt service costs will soar.
Add to this the fact that Treasury is loading up on short term debt (lower interest rates) instead of issuing longer term instruments, and we have one more example of short term expediency.

[EconProf]

I hope you are not taking comfort in the fact that the government’s servicing costs on our debt is low because of (temporarily?) low interest rates. This is disguising the true long term cost of our growing indebtedness. Servicing costs are part of our annual expenses, and low interest rates serve to keep our current deficit lower than it would normally be. If interest rates simply return to the average of the past ten years, our debt service costs will soar.
Add to this the fact that Treasury is loading up on short term debt (lower interest rates) instead of issuing longer term instruments, and we have one more example of short term expediency.

[DomoArigato]

And one of the sheeple (first response) responds with same predictable claptrap. Japan has had low interest rates since at least the mid 1990s. And their percentage of debt-to-GDP is more than twice that of the U.S.

And it’s not like the U.S. doesn’t have some easy ways to reduce debt. For example, we could end all these ridiculous wars and cut the defense budget. Not to mention that taxes could be raised as they are currently at the lowest rate as a percent of GDP since the 1950s.

But never mind all that because LOOK! BEHIND THAT TREE! INVISIBLE BOND VIGILANTES!

[DomoArigato]

And one of the sheeple (first response) responds with same predictable claptrap. Japan has had low interest rates since at least the mid 1990s. And their percentage of debt-to-GDP is more than twice that of the U.S.

And it’s not like the U.S. doesn’t have some easy ways to reduce debt. For example, we could end all these ridiculous wars and cut the defense budget. Not to mention that taxes could be raised as they are currently at the lowest rate as a percent of GDP since the 1950s.

But never mind all that because LOOK! BEHIND THAT TREE! INVISIBLE BOND VIGILANTES!

[DomoArigato]

And one of the sheeple (first response) responds with same predictable claptrap. Japan has had low interest rates since at least the mid 1990s. And their percentage of debt-to-GDP is more than twice that of the U.S.

And it’s not like the U.S. doesn’t have some easy ways to reduce debt. For example, we could end all these ridiculous wars and cut the defense budget. Not to mention that taxes could be raised as they are currently at the lowest rate as a percent of GDP since the 1950s.

But never mind all that because LOOK! BEHIND THAT TREE! INVISIBLE BOND VIGILANTES!

[DomoArigato]

And one of the sheeple (first response) responds with same predictable claptrap. Japan has had low interest rates since at least the mid 1990s. And their percentage of debt-to-GDP is more than twice that of the U.S.

And it’s not like the U.S. doesn’t have some easy ways to reduce debt. For example, we could end all these ridiculous wars and cut the defense budget. Not to mention that taxes could be raised as they are currently at the lowest rate as a percent of GDP since the 1950s.

But never mind all that because LOOK! BEHIND THAT TREE! INVISIBLE BOND VIGILANTES!

[DomoArigato]

And one of the sheeple (first response) responds with same predictable claptrap. Japan has had low interest rates since at least the mid 1990s. And their percentage of debt-to-GDP is more than twice that of the U.S.

And it’s not like the U.S. doesn’t have some easy ways to reduce debt. For example, we could end all these ridiculous wars and cut the defense budget. Not to mention that taxes could be raised as they are currently at the lowest rate as a percent of GDP since the 1950s.

But never mind all that because LOOK! BEHIND THAT TREE! INVISIBLE BOND VIGILANTES!

[Anonymous]

EconProf,

That was complete gibberish.

Do you understand that yields are set by the market?

The corrupt hacks at S&P can say what they want.

The market says something else.

The OP isn’t saying that there isn’t a debt problem – nobody is.

What he is saying is that there other, bigger, problems. Fixating solely on the debt is reckless and irresponsible.

[quote]Add to this the fact that Treasury is loading up on short term debt [/quote]
You forgot to add the “[citation needed]”

From the article:

The Treasury Department paid an average yield of 2.13 percent on the three-, 10- and 30-year securities, less than the previous refunding auctions in May of 3 percent and below the former record of 2.59 percent in February 2009, according to data compiled by Bloomberg.

[Anonymous]

EconProf,

That was complete gibberish.

Do you understand that yields are set by the market?

The corrupt hacks at S&P can say what they want.

The market says something else.

The OP isn’t saying that there isn’t a debt problem – nobody is.

What he is saying is that there other, bigger, problems. Fixating solely on the debt is reckless and irresponsible.

[quote]Add to this the fact that Treasury is loading up on short term debt [/quote]
You forgot to add the “[citation needed]”

From the article:

The Treasury Department paid an average yield of 2.13 percent on the three-, 10- and 30-year securities, less than the previous refunding auctions in May of 3 percent and below the former record of 2.59 percent in February 2009, according to data compiled by Bloomberg.

[Anonymous]

EconProf,

That was complete gibberish.

Do you understand that yields are set by the market?

The corrupt hacks at S&P can say what they want.

The market says something else.

The OP isn’t saying that there isn’t a debt problem – nobody is.

What he is saying is that there other, bigger, problems. Fixating solely on the debt is reckless and irresponsible.

[quote]Add to this the fact that Treasury is loading up on short term debt [/quote]
You forgot to add the “[citation needed]”

From the article:

The Treasury Department paid an average yield of 2.13 percent on the three-, 10- and 30-year securities, less than the previous refunding auctions in May of 3 percent and below the former record of 2.59 percent in February 2009, according to data compiled by Bloomberg.

[Anonymous]

EconProf,

That was complete gibberish.

Do you understand that yields are set by the market?

The corrupt hacks at S&P can say what they want.

The market says something else.

The OP isn’t saying that there isn’t a debt problem – nobody is.

What he is saying is that there other, bigger, problems. Fixating solely on the debt is reckless and irresponsible.

[quote]Add to this the fact that Treasury is loading up on short term debt [/quote]
You forgot to add the “[citation needed]”

From the article:

The Treasury Department paid an average yield of 2.13 percent on the three-, 10- and 30-year securities, less than the previous refunding auctions in May of 3 percent and below the former record of 2.59 percent in February 2009, according to data compiled by Bloomberg.

[Author]

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