Here’s yet another UP idea that President Trump is wisely considering: issue long term bonds as a hedge against interest rate risk on the $36 trillion debt.
We first suggested this reform back in 2019 when the interest rate on the 10-year Treasury was between 2% and 3%. The rates are now closer to 4.7%.
If the Trump 1.0 White House had taken our advice, the federal government would have potentially saved hundreds of billions of dollars on interest costs.
It’s not too late, and it’s prudent for the federal government to have a safety precaution against bond sell-offs and rates rising. Other nations have issued 50 year bonds. Right now, the federal debt rolls over on average in just less than six years. Stretching that out seems financially prudent with the potential savings reaching close to $1 trillion over the next 30 years.
What interest rate would investors pay for a 50 or 100 year bond? There’s only one way to find out.