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Making Sense: Should We All Buy Savings Bonds?

Paul Solman answers questions from NewsHour viewers and web users on business and economic news on his Making Sen$e page. Here’s Thursday’s query:

Name: Sue Pruner

Question: In this debt crisis, what would the effect be if many citizens bought savings bonds? What would the effect be on the citizens and on the debt situation?

Paul Solman: Oh, maybe the interest rates we’d have to pay to borrow money would go down a touch. But they’re already at historic lows. The problem isn’t that the United States can’t borrow money cheaply. If there’s a “debt crisis,” it’s because we, as a people, can’t (or won’t) close the gap between federal revenues and federal expenses.

As to savings bonds, our personal finance guru here on Making Sen$e, Boston University professor Zvi Bodie(sattva), recommends I-bonds, which guarantee a return of at least the rate of inflation. Go to the Treasury’s website to learn more about them, and BUY them if you wish.

Editor’s Note: We’ll have a personal update upcoming from Paul on the Occupy Wall Street protests, and what it means to be a member of the media.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions. Follow Paul on Twitter.

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