Word: federales
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
But if Build America Bonds have proved popular, they may also end up being costly. Already, the volume of bonds issued means the federal government is committed to spending a billion dollars in the first year of the program alone. The final price tag may end up reaching $90 billion...
"For municipalities, it's been good, but it raises some political-economy questions," says Vincent Reinhart, a resident scholar at the conservative think tank American Enterprise Institute and a former top Federal Reserve economist. "This might encourage even more expansion of government borrowing."
Under the program, the federal government subsidizes the bond payments that local governments make to investors, boosting the yield by 35%. So a typical muni bond that would normally pay 4.5% yields nearly 7% if it is issued through the Build America Bond program. The higher payments don't hurt...
The only question about BABs is the cost. So far local governments have issued just over $50 billion in BABs with an average yield of just under 6%. That means the federal government is paying just over 2% interest on that debt a year, or about $1 billion. Many estimate...
It's likely however the program won't cost nearly that much. First of all, some of the people buying BABs are individuals, who will owe taxes, though not all of them are in the highest tax bracket. What's more, BABs are bringing down the yields of all muni...