WASHINGTON, June 1 (UPI) -- The public debt crisis unfolding in Europe has yet to cross the Atlantic Ocean, despite rising federal deficits, a recent bond issue proved.
Ten-year Treasury notes Friday were listed at 3.3 percent interest, while two days earlier the government borrowed $42 billion issuing five-year bonds at 2.13 percent interest, The Washington Post reported Tuesday.
That compares to interest rates of more than 6 percent in the 1990s, making U.S. borrowing surprisingly affordable despite the government's spending habits.
The political will to face the government's deficit appears sparse. But investors still view U.S. bonds as a safe haven during shaky economic times.
"You can talk about the deficit until you're blue in the face, but we'll only get political traction on meaningful deficit reduction when there is economic pain being caused by the deficit in the form of inflation or high interest rates or both," said George H.W. Bush era Treasury Department official Bruce Bartlett.
New Income Fund manager Dan Shackelford said the United States has historically responded well to rising debt although the pressure needs to build substantially before politicians agree to raise taxes or cut programs.
"It may take longer than anyone likes, but we have a history of getting the message," he said.
