While nobody is certain just how the coronavirus pandemic will end (or when exactly it will end) both in the United States and globally, one thing we can expect is for various stimulus packages to be passed and go into effect as various industries, businesses and individuals face the reality of the situation and struggle to make ends meet.
And while the Senate recently failed to pass a stimulus package, it’s safe to bet that more will be on the way in subsequent weeks as this fluid situation continues to develop. As such, one way to aid in the recovery of the American economy actually evolves from wartime strategies to help mitigate fallout: special treasury bonds.
There’s some thought that the United States Treasury could issue special coronavirus bonds, where proceeds from purchased bonds could go immediately to displaced workers or be used to issue low-interest loans to businesses that have been impacted by the virus. There’s the first win that such a policy would provide.
The second win would be for those who invest in the bonds, which would offer an incentive in an interest rate higher than the current 1 percent bond rate. The ideal investor would likely be individuals too nervous to invest in the stock market right now amid its rapid decline. Bonds typically offer a more attractive investment option during times of uncertainty, as they’re more of a low-risk option. With any type of interest rate, investors can be sure that they’ll see ROI on their purchase, and while it’s not likely to be as significant as the stock market at its peak, it’s still an investment.
Specially issued bonds have been a popular go-to for the government in times of economic hardship. They were popularly offered after World War I and World War II, after the September 11 terrorist attacks, and then again amid the 2008 financial crisis that started the great recession.
While we all hope that the economic impact suffered from the coronavirus pandemic is a short-lived one, there’s no question that Americans and American businesses are going to need some assistance in their recovery in the meantime. In addition to the other packages that are likely going to be passed in the coming weeks as this very fluid situation evolves, these treasury bonds are something else that could help those that are suffering the most from the pandemic.
Coronavirus treasury bonds could be issued yearly or offer denominations out to 10 years, making them attractive for beyond growing wealth, but saving for future life expenses, such as college, retirement or a future significant down-the-road purchase.
What do you think? Should special treasury bonds be a part of the United States’ strategy to help mitigate the economic fallout from everything? Would you consider purchasing one if they were? Nothing is imminent, but this could be one option that lawmakers pursue moving forward.