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At the risk of sounding fantastically ignorant... If the US decided to reduce its fiscal deficit, wouldn't that take short-term T-bills out of circulation and

• mywittyname 11y ago
  It's no an ignorant question at all, but this has happened before. In the late 90s the US government was projected by be debt-free by like 2003 and the prospect caused panic in the financial industry and the government reverse course and proceeded to run a deficit again. So short-term, it would not affect rates, but long term budget surpluses are worrisome.
  • AnimalMuppet 11y ago
    Um, no, that is not at all why the government reversed course. They did, but that's not why. (Why did they really? Because Republicans in Congress were fine with not letting a Democratic president spend money, but once they got a Republican president, they were unwilling to hold his feet to the fire.) To the parent's question: If such were to happen, they're at least as likely to pay back longer-term debt.
  • peter303 11y ago
    It would have taken to late 2020s for all the 30-years to mature. They did stop selling 30-years for short while around the turn of the century. But I dont know if for this reason.
    • AnimalMuppet 11y ago
      If I recall correctly, yes, it was for this reason.