6 ms·

So pretty sure that’d be a form of institutional capital “parking” for later generations. I could see pension plans buying into them, maybe?

by ianai 7y ago

option_greek 7y ago
That's one way to put it. Another way to put it is saddling future generations of Americans with debt.
- chewz 7y ago
  > Another way to put it is saddling future generations of Americans with debt. It would be wasteful not to borrow money at near zero rates
  - romaaeterna 7y ago
    Yes and no. The borrowing can prop up counterproductive spending, such as hiring smart people for government sinecures, keeping them from being creative in the public sector, etc. Also, budget dependence on cheap debt has in the past been a very costly habit for many countries when the high interest times come along again.
  - option_greek 7y ago
    Only if the generation borrowing is approximately same as the one paying it back :)
    - chewz 7y ago
      Relax - we live in MMT era ;-)
      - ianai 7y ago
        Glad I’m not alone!!
  - scottlocklin 7y ago
    >It would be wasteful not to borrow money at near zero rates Someone gave me this argument recently. Mostly because she would have made a couple thousand in fees. I'd have been out tens of thousands in fees and interest. It wouldn't have done me a lick of good unless I had something amazing to invest in, which means I could have borrowed some money later. The same actually does apply to the government spending dumb ass Saudi/Japanese tribute money. If they're not investing it in something useful for the future, it's just lighting money on fire.
- ianai 7y ago
  When the US government has a debt there is wealth out in the non-US government above what clearing the balance sheet would allow. It’s actually a measure of the governmental contribution to social wealth. The pickle is in making the other side of the balance sheet positively affect the wealth of the nation the greatest. “Or it should be.” A surplus would be the government taking wealth in from the non-US government side. Something that sounds a lot more like governmental corruption and waste than the other option. Exactly equalling it out would make the entire economy zero sum.
nostromo 7y ago
No, you can sell bonds at anytime, just like any other security. Existing 30 year bonds change hands all the time.
- beezle 7y ago
  Generally yes but off the run issues have much poorer liquidity and spreads can be much wider.
deleted 7y ago
[deleted]
jazzkingrt 7y ago
Many institutions, such as university endowments or sovereign wealth funds, invest on these time scales. Example: https://www.bloomberg.com/news/articles/2017-08-29/why-yale-owns-a-forest https://www.bloomberg.com/news/articles/2017-08-29/why-yale-... And as another commented, these bonds can be traded long before they mature.
- ianai 7y ago
  Of course they can be traded at anytime. I think I’m somewhere between “why doesn’t this already exist” and “who cares”. It sounds at once both useful for creating long term assurances and highlights how different such financial choices are from common individual personal finance choices.

So pretty sure that’d be a form of institutional capital “parking” for later generations. I could see pension plans buying into them, maybe?

by ianai 7y ago

So pretty sure that’d be a form of institutional capital “parking” for later generations. I could see pension plans buying into them, maybe?

option_greek 7y ago

That's one way to put it. Another way to put it is saddling future generations of Americans with debt.

chewz 7y ago
> Another way to put it is saddling future generations of Americans with debt. It would be wasteful not to borrow money at near zero rates
- romaaeterna 7y ago
  Yes and no. The borrowing can prop up counterproductive spending, such as hiring smart people for government sinecures, keeping them from being creative in the public sector, etc. Also, budget dependence on cheap debt has in the past been a very costly habit for many countries when the high interest times come along again.
- option_greek 7y ago
  Only if the generation borrowing is approximately same as the one paying it back :)
  - chewz 7y ago
    Relax - we live in MMT era ;-)
    - ianai 7y ago
      Glad I’m not alone!!
- scottlocklin 7y ago
  >It would be wasteful not to borrow money at near zero rates Someone gave me this argument recently. Mostly because she would have made a couple thousand in fees. I'd have been out tens of thousands in fees and interest. It wouldn't have done me a lick of good unless I had something amazing to invest in, which means I could have borrowed some money later. The same actually does apply to the government spending dumb ass Saudi/Japanese tribute money. If they're not investing it in something useful for the future, it's just lighting money on fire.
ianai 7y ago
When the US government has a debt there is wealth out in the non-US government above what clearing the balance sheet would allow. It’s actually a measure of the governmental contribution to social wealth. The pickle is in making the other side of the balance sheet positively affect the wealth of the nation the greatest. “Or it should be.” A surplus would be the government taking wealth in from the non-US government side. Something that sounds a lot more like governmental corruption and waste than the other option. Exactly equalling it out would make the entire economy zero sum.

nostromo 7y ago

No, you can sell bonds at anytime, just like any other security. Existing 30 year bonds change hands all the time.

beezle 7y ago
Generally yes but off the run issues have much poorer liquidity and spreads can be much wider.

deleted 7y ago

[deleted]

jazzkingrt 7y ago

Many institutions, such as university endowments or sovereign wealth funds, invest on these time scales. Example: https://www.bloomberg.com/news/articles/2017-08-29/why-yale-owns-a-forest https://www.bloomberg.com/news/articles/2017-08-29/why-yale-... And as another commented, these bonds can be traded long before they mature.

ianai 7y ago
Of course they can be traded at anytime. I think I’m somewhere between “why doesn’t this already exist” and “who cares”. It sounds at once both useful for creating long term assurances and highlights how different such financial choices are from common individual personal finance choices.