U.S. Receives Record Demand For Its Bonds Under Obama, Helping The Deficit


Bloomberg News reports that the U.S. government received record demand for its bonds in 2011, “pushing longer-maturity treasuries to their best performance since 1995 in a sign that President Obama may have little difficulty” financing the budget deficit. The European debt crisis is driving investors to buy U.S. assets, allowing the government to get an “all-time high bid-to-cover ratio of 9.07 for $30 billion of four-week bills it auctioned on Dec. 20 even though they pay zero interest.” Despite the GOP’s factually-challenged fear-mongering about the deficit, the high demand for U.S. bonds are “helping to contain borrowing costs and making it cheaper as a percentage of gross domestic product to finance deficits than when the nation last had budget surpluses.”