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Changing the Budget Rules Could Alter How the Federal Government Lends - Brookings Institution - 1 views

www.brookings.edu/...3_federal_lending_elliott.aspx

budget federal government discount rate interest article

shared by Brian G. Dowling on 25 Feb 12 - No Cached

Brian G. Dowling on 25 Feb 12

The fundamental question revolves around what interest rate to use to calculate the cost in today's dollars of the government's future receipts. The government makes loans today and receives interest payments and principal repayments over a period of as much as thirty years. The only way to make a fair comparison between different loan programs, or between a grant program and a subsidized loan program, is to calculate the cost in today's dollars.

<div class="cArrow"> </div><div class="cContentInner">The fundamental question revolves around what interest rate to use to calculate the cost in today's dollars of the government's future receipts. The government makes loans today and receives interest payments and principal repayments over a period of as much as thirty years. The only way to make a fair comparison between different loan programs, or between a grant program and a subsidized loan program, is to calculate the cost in today's dollars.</div>

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