WASHINGTON (Pakistan Point News / Sputnik - 11th May, 2020) Historically low interest rates will allow the United States to borrow money needed for $3 trillion in coronavirus (COVID-19) relief packages approved by Congress thus far and also take advantage of lower borrowing costs to finance a portion of the nation's debt, Treasury Secretary Steven Mnuchin said in an interview on Monday.
"One of the reasons I do feel comfortable with us spending all this money is because interest rates are very low and we're taking advantage of long-term rates. Between ten years 20 years and 30 years, we're borrowing an awful lot of money long term so that we can lock in this $3 trillion [at low interest rates] for a very long period of time. We're going to take advantage of refinancing all of our debt to make sure that we have very low rates," Mnuchin told CNBC.
Munchin added, however, that the savings will apply only to new debt and the Treasury Department has no plans to begin buying back outstanding US government bonds and other securities issued when interest rates were higher.
Low interest rates also make it easier for US corporations to borrow money needed to weather the crisis, Mnuchin said, citing Boeing as an example.
The Treasury Secretary urged caution in spending another trillion Dollars or more to help state and local governments, the goal of legislation now being crafted by Democrats in the US House of Representatives.
Mnuchin added that US states are no longer required to spend money from the $2.1 billion CARES Act exclusively on medical care, but can use the extra cash to pay police, medical workers and other first responders at a time when state and local tax collections have dried up amid nationwide business closures to slow COVID-19 contagion.
