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Is the US national debt interest rate fixed or variable?

Submitted by britterm on Sun, 11/04/2012 - 15:43
in

I'm wondering if the US national debt interest rate is fixed or variable? I know that when I buy a bond, the return on that bond is fixed at a rate calculated by today's rates. It this true for all debt that the US owes, or is some of it variable?

Thanks!


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It's fixed all right

Submitted by chris cudnoski on Mon, 11/05/2012 - 02:34.

ad infinitum.

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Both Treasury Inflation

Submitted by AZJoe on Sun, 11/04/2012 - 22:12.

Both

Treasury Inflation Protected Securities are effectively variable
Other US treasuries and bonds are fixed.

Unfunded mandates like Social Security and Medicare obligations are variable to the extent benefits are tied to COLA, and to the extent expenses, costs and Medical prices increase with inflation. Repayment of the monies taken from prior surplus years are fixed because the surpluses were replaced with IOUs in fixed treasuries.

The rate of acquisition of additional debt to maintain existing functions and obligations is effectively variable because other present and future spending obligations increase with inflation. (The rate of debt acquisition is increasing, although the interest on the new debt acquired may be fixed depending on the type of debt sold.)

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Thanks, that helps very much.

Submitted by britterm on Mon, 11/05/2012 - 02:33.

Thanks, that helps very much. My brother and I were discussing this and he asked how a rising interest rate can effect the government's outstanding debt. I didn't have much of an answer then, but now I do.

It's based on a viariable interest rate, most of it is anyway

Submitted by truxtonc on Sun, 11/04/2012 - 22:03.

At least that's what I understand it to be. When they discuss the financial system and the debt crises, the danger for the federal debt is that if interest rates go up now. When or if the recession is over and we bounce out of this, rates go up as do tax revenues and inflation (like the 70s). IMO, then the fed will attempt to pull liquidity out of the system with a reverse QE, thereby easing inflation. Not saying I agree with it, that is what appears to be the Bernake plan.

I know what you are thinking, if interest rates go up now, well we can't, oh well, never mind> LOL

i'm bumping hoping someone

Submitted by ggb45601 on Sun, 11/04/2012 - 21:42.

i'm bumping hoping someone can answer your question. I tried to look it up but didn't find anything

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"and the truth shall make you free"
John 8:32

Bump!

Submitted by britterm on Sun, 11/04/2012 - 20:44.

Bump!