Sure has been a while…
❝ There are times when a confluence of events creates a rare opportunity. The U.S. now is at one of those moments…
❝ Campaign promises were made by the president-elect to upgrade infrastructure;
The U.S. federal debt is almost $20 trillion;
The U.S. has both a high credit rating and a stable, growing economy;
There is a worldwide shortage of sovereign, A-rated bonds;
Negative interest rates are prevalent around the world;
The U.S.’s infrastructure is outdated and deteriorating;
Interest rates are very low, but will likely rise in the near future;
The president-elect comes to office with a background in real-estate development and understands the use of debt.
❝ If this were an equation, the above points would result in an obvious answer: the refinancing of long-term debt and obligations at the lowest possible rate for the longest possible time. I am suggesting that the U.S. issue bonds that mature in 50 or 100 years…
❝ Improving U.S. roads, highways, bridges and tunnels as well replacing or constructing new transport systems is a two-part project: first, commit to making the basic repairs to counter the effects of wear, tear, weather and age. One part of the solution is to fully fund the national Highway Trust Fund by raising the federal gasoline tax. Second, use long-term bonds to upgrade the transportation system, electrical grid and water works that are so crucial to the U.S.’s well-being.
RTFA for the details of Barry Ritholtz’ outline in the issuance and sale of bonds up to 100 year term. We wouldn’t even be the first in North America on the street. Doesn’t lessen the sensible character of his proposal.
Thanks, Barry Ritholtz