“Am I going to get paid?” is the concern of anyone holding Treasury bills, bonds or notes, Syracuse University economics professor Don Dutkowsky told OpenSecrets Blog
Edited excerpt, re-reporting, brief comment by Carolyn Bennett
Among Treasury bills, Treasury notes and Treasury bonds, T-bills have the shortest maturity — ranging anywhere from one week to 52 weeks. The Center for Responsive Politics puts in perspective vested (conflicts of) interests of those who would represent the best interests of the people of the United States.
Treasury notes have a slightly longer maturity and interest is paid every six months. Bonds take 30 years to mature and also pay interest every six months.
Buy a Treasury note with a two-year maturity at $500 and you own $500 of U.S. debt. Every six months you are paid a set amount of interest on that $500. When two years elapse, you get $500 back, which means that, overtime, you earn more than your initial payment for the note.
Therefore, if the U.S. debt ceiling is not raised and government runs out of money and is unable to pay all of its bills — the result is bad news for people invested in the U.S. Treasury’s debt.
Depending on how long the crisis lasts, those holding Treasury bills with the shortest maturity are at the most immediate risk of not receiving their payments on time. If the crisis is not solved within six months, those holding Treasury notes and bonds and expecting interest payments are also at risk.
VESTED
Republicans and Democrats hold U.S. Treasury Bills, Bonds and Notes, says to OpenSecrets Blog.
KERRY
Democratic (Mass.) Senator John Kerry’s most recent personal financial reports, according to CRP reviews, “disclosed investments in U.S. treasury notes valued between $1,001 and $15,000” and Kerry’s spouse “has holdings of at least $350,000 in U.S. Treasury bills.”
Senator Kerry “‘voted to ensure seniors in Massachusetts received their Social Security checks on time, veterans still received their benefits, and to prevent a downgrade in America’s credit rating and an economic meltdown that would have triggered a global economic catastrophe.’”
LAUTENBERG
Democratic Senator (N J) Frank Lautenberg in 2009 [his 2010 personal financial report will not be filed with the Senate until mid August] held “U.S. Treasury bills valued at $4 MILION to $6 MILLION.” His spouse’s holdings are reportedly part of this huge amount.
BOEHNER
Republican Representative and House Speaker (Ohio) “John Boehner’s investments in 2010 were valued between $15,001 and $50,000 and last year, Boehner sold between $1,001 and $15,000 worth of Treasury bills.”
BIGGERT
Republican Representative (Illinois) Judy Biggert “had investments in U.S. Treasury notes and bills in 2010 worth at least $250,000 (possibly as much as $600,000).”
HOLDING U.S. DEBT
Investments in U.S. Treasury bills, notes and bonds held by current members of the U.S. Congress who were also members of the 111th Congress. Data based on Center for Responsive Politics’ analysis of their reports covering calendar year 2009
Member of Congress | Investment | Minimum | Maximum |
Sen. Frank R. Lautenberg (D-N.J.) | U.S. Treasury Bill | $4,467,011 | $6,080,003 |
Rep. Judy Biggert (R-Ill.) | U.S. Treasury Bonds/Notes | $1,250,004 | $850,000 |
Sen. Olympia J. Snowe (R-Maine) | U.S. Treasury Bills | $750,002 | $1,500,000 |
Rep. Rodney Frelinghuysen (R-N.J.) | U.S. Treasury Note | $300,002 | $600,000 |
Rep. Nita M. Lowey (D-N.Y.) | U.S. Treasury Bills | $100,001 | $250,000 |
Sen. Claire McCaskill (D-Mo.) | U.S. Treasury Notes | $80,003 | $200,000 |
Rep. Carolyn McCarthy (D-N.Y.) | U.S. Treasury Bond | $35,106 | $35,106 |
Rep. Lamar Smith (R-Texas) | U.S. Treasury Note | $30,002 | $100,000 |
Rep. Shelley Berkley (D-Nev.) | U.S. Treasury Note | $24,269 | $24,269 |
Rep. Phil Roe (R-Tenn.) | U.S. Treasury Note | $19,872 | $19,872 |
Sen. John Kerry (D-Mass.) | U.S. Treasury Bill/Note | $16,002 | $66,000 |
Rep. Niki Tsongas (D-Mass.) | U.S. Treasury Note | $15,001 | $50,000 |
Rep. John Boehner (R-Ohio) | U.S. Treasury Notes | $15,001 | $50,000 |
Sen. Roger Wicker (R-Miss.) | U.S. Treasury Bond | $1,001 | $15,000 |
There are personal, vested reasons why men and women of wealth wield power and wink and nod the way they do.
A U.S. default in this context means, according to OpenSecrets Blog quoting economics professor Esther Redmount, holders of U.S. Treasury bills, bonds and notes “would not realize the capital gains they expected,’” the value of their assets decline, and “‘they stand to lose a lot of money.’”
Sources and notes
“Amid Budget Debate, Some Members of Congress Own Bits of U.S. Debt” (Kathleen Ronayne), August 1, 2011, OpenSecrets Blog, http://www.opensecrets.org/news/2011/08/members-of-congress-invested-in-treasury-bills.html
Don Dutkowsky is professor of economics at the Maxwell School Economics Department of Syracuse University. He teaches courses in Money and Banking and Macroeconomics. His research interests include Monetary Policy, Discount window borrowing and Output Price determination.” http://faculty.maxwell.syr.edu/ddutkowsky/
Dr. Esther Redmount is professor of economics at Colorado College (1987-present) and John D. and Catherine T. MacArthur Professor (1988-90). She teaches Principles of Microeconomics and Microeconomic Theory, Economics of Labor and Game Theory among other related courses.
http://www.coloradocollege.edu/dept/EC/faculty/Red.html
http://www.coloradocollege.edu/dept/EC/Redmount.asp
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