Opinion | Politics

Mark Trahant: Why the fight over debt limit matters so much

"It’s easy to be gloomy about the prospects of the United States government. The country, after all, owes a boat load of money and the political debate about how to solve that problem is both rancorous and ineffective.

And programs for American Indians and Alaska Natives are a tiny fraction of that spending -- yet we will soon see the impact from substantial, across-the-board budget cuts, hitting communities were jobs are scarce.

So how about a little good news? The United States can borrow money for almost nothing. A two-year Treasury bond pays one-quarter of one percent. A five-year note is a bit more expensive, three-quarters of one percent. And, a thirty-year note is 3.01 percent. (How does this compare to other nations? Investors in Swiss bonds actually get a return of less than what they pay for bonds. On the other hand, an investment in some Greek bonds earned 80 percent last year because of the risk.)

That’s what’s crazy about the current debt limit fight. Investors from all over the world are willing to pay the United States practically nothing for a promise that we will pay them later."

Get the Story:
Cheap money: Why the debt-limit fight matters (Mark Trahant 1/15)

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