A Boon for the U.S. in Low-Cost Borrowing
These are the best of times for the world’s most ravenous borrower, the United States of America.
A combination of unusual and unsustainable forces has pushed the cost of borrowing as low as it has ever been, so low that many investors effectively are paying to lend money to the government.
Investors buying five-year federal debt are accepting such low interest rates that inflation is on pace to reduce the value of their investments by more than 1 percent each year. Yet demand for United States Treasuries remains much greater than the supply.
The glut of cheap money has allowed the government to keep its annual deficits much smaller than it had expected, holding down the growth of the federal debt.
full: http://www.nytimes.com/2012/02/28/business/era-of-low-cost-borrowing-benefits-federal-government.html
