The Economic Perspective: “100 Year Bonds”

This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at 100 year bonds. Mike, typically when people, businesses, or governments bon-ow money, the maximum length of the loan is 30 years. But I understand there is some talk of the government increasing this to 100 years. Why is this being discussed now, and does it make sense?

  • Reason being discussed now – record low interest rates
  • Argument is to take advantage of this
  • Two ways to do – borrow more, and b01row for longer period of time
  • Of course, federal government has been borrowing more due to rising deficit
  • But advocates of 100 year bonds say locking in interest rates for this period could save big bucks if rates eventually rise in the future
  • Realists say government will continue borrowing, so why not at least try to lower the costs
  • I’m MW

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.