Is it not a good idea?
[cynic]
I think they are still paying off the ones from WWII.
Because they’re already selling various debt instruments. Treasury bills. Government bonds. The stuff your investment counselor tells you to add to your portfolio for security.
There’s no practical difference between those and “war bonds.” “War bonds” were just a way to market them at a time when they REALLY needed people to buy them, right away, even more than they do now. If the U.S. suddenly found itself at war with Iran, North Korea and Belgium and desperately needed to raise a vastly alrger army, you might see them rename some existing bonds as “War Bonds,” slap the Old Glory on them, and sell them that way, but as it stands they’re sufficiently popular that there’s no need to do that.
http://www.ustreas.gov/education/faq/international/terror.html#q4
I know this is GQ, but I have GOT to give the term “Patriot Bond” a big ol’ :rolleyes:
Apparently, the absurdity of real life has already caught up with my own hypotheticals.
That’s not the same thing.
In what tangible way is it different?
“War Bonds” in the US were Series E bonds, which were sold through 1980. They were replaced by Series EE in 1980 which are now being marketed as a type of war bond.
The ones sold through 1965 stop earning interest after 40 years.
http://www.cleveland.com/business/plaindealer/index.ssf?/base/business/110466186639410.xml
There were two factors underlying encouraging the purchase of War Bonds that no longer are applicable.
One is that today huge amounts of government bonds are purchased by other governments, so that we have no problems collecting all the money we need to finance the deficit. Obviously, we could not count on other countries, which desperately needed their own money for their own war effort to buy our bonds, not to mention that some of the wealthiest were our enemies. We needed an immediate and continuing cash flow beyond the taxes collected and voluntary bond purchases suited the bill.
The other reason is largely forgotten today. Consumer goods manufacturing nearly shut down at the start of WWII. Virtually all factories were converted to war goods manufacturing. The public also was making more money as the war factories swept up every able body and with good wages. The combination of high wages with nothing to spend them on had the potential for vast amounts of griping and grumbling. The ability to bleed off these extra dollars into the Good Cause of Wars Bonds rather than black market liquor or gambling or some other activity less societally useful kept the public content during the war. It also had the happy effect of creating a whole pool of forced savings that could be used to buy consumer products once the factories reconverted. While almost everybody expected a recession if not depression after the war, it never happened. People spent and spent and the consumer society of the 1950s was born.
Today people are already spending more money than they should, the money owed on credit cards, loans, and mortgages is enough to push many families into bankruptcy, and our savings rate is unbelievably low. Yet as long as the economy depends on the amount of money spent on consumer items while incomes drop in real terms, a type of forced savings may even be destabilizing.
What to do with the U.S. savings rate is a GD issue. For years U.S. economists have been screaming that the savings rate needs to go up, but there was just a Wall Street Journal article on how the economies of European countries are suffering because people there save their money instead of purchasing consumer goods. Where the sweet spot is between them, in which we start saving more while consuming less without hurting a fragile economy is a mystery to me. Socially speaking, there may never have been a time when newer, glitzier, and more expensive consumer items are advertised more heavily every second of every day and expecting the mass of people to forego those goods is massively unrealistic.