Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
Why Government Debt Is Cheaper Than Private Debt
Episode 75 explores the paradox that the U.S. government borrows at lower interest rates than almost any private company, even though its total debt exceeds $35 trillion. Lucas and Luna examine the structural reasons behind this phenomenon: the dollar's reserve currency status, the depth of the Treasury market, and the unique role of central banks. They walk through how this 'safe asset' premium affects everything from corporate borrowing costs to pension fund yields. Specific examples include the spread between 10-year Treasuries and investment-grade corporate bonds, the…
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