Dan Harris Explores How Treasury Bonds Work -- and the Economic Risks Involved
President-elect Barack Obama and the incoming Congress need to quickly pass a huge economic stimulus plan. Since the U.S. Treasury doesn't have the extra $775 billion needed, the money must be borrowed.
So where will the government get the money? To raise the billions of dollars for the stimulus, the federal government will sell bonds.
The sale of U.S. Treasury bonds can easily be explained as a loan to the government. "A bond is simply an IOU issued by the government of business," said Mark... Full Story
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