The Day the U.S. Treasury Rejected My Advice - And Doomed America

By Martin Hutchinson, Global Investing Strategist, Money Morning 



In the mid 1990s, when I was working as a U.S. Treasury advisor toCroatia, I met with the managers of the U.S. Treasury's debt.

In what would turn out to be terrific advice, the Treasury officials suggested that we extend Croatia s' debt maturities so the Central European country wouldn't have to refinance too often.

So in gratitude, I offered the U.S. officials some counsel of my own.

I told them they should follow their own counsel and lengthen the U.S. Treasury's average debt maturities, then about six years.

The Treasury officials should have taken my advice. But instead they ignored me and did the exact opposite.

The upshot: Today the United States' debt maturities are among the shortest in the Organization of Economic Cooperation and Development (OECD), and U.S. refinancing costs are exceptionally large.

So if you're already worried about soaring budget deficits and the solvency of the United States, brace yourself - it's only going to get worse.