You seem to be confused: 1. US Treasury bills and bonds are not exempt from Federal taxation. 2. In your original comment, you referred to "20 year t-bills."

You seem to be confused: 1. US Treasury bills and bonds are not exempt from Federal taxation. 2. In your original comment, you referred to "20 year t-bills." There is no such thing. The longest dated Treasury bill is 52 weeks; they are most frequently issued with maturities of a year or less. You are confusing Treasury bills and Treasury bonds, which are not the same thing. 3. T-bills are short-term investments purchased for the security they offer; nobody buys them to beat inflation. Historically, they have never provided a real return significantly above that of inflation[1]. 4. That the yields of 10 year Treasury bonds are not keeping up with inflation is not a news story. It's been talked about widely for years[2]. [1] http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/... [2] http://www.bloomberg.com/news/2012-12-14/treasury-yields-below-inflation-may-last-years-chart-of-the-day.html http://www.bloomberg.com/news/2012-12-14/treasury-yields-bel...