Nobody "lent" money to normal people at prime rates. Almost the only people buying Treasuries are: 1) The Fed (to manipulate prices) 2) Foreign governments (

Nobody "lent" money to normal people at prime rates. Almost the only people buying Treasuries are: 1) The Fed (to manipulate prices) 2) Foreign governments (because they basically have to for international trade to function) 3) Pension funds (because they are literally mandated by federal governments) 4) bond traders (who don't think the yield is an investment, but that they know where the price is headed and can make money selling at a better price in the near future) 5) 401k funds - of which US Treasures are typically a very small percentage, given that "bonds" as an entire asset class rarely exceeds 40%.