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I heard an announcement that the Gov't will issue War Bonds for the first time since WWII. No details, but this is worth monitoring.

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No. of Recommendations: 0
I heard an announcement that the Gov't will issue War Bonds for the first time since WWII. No details, but this is worth monitoring.

I've heard that this is being discussed, but nothing official.

In any event it is utterly without signifigance for two reasons:

(1) It would be pretty much pointless
(2) Something functionally identical is available right now.

Pointless: In WWII the US dived heavily into deficit spending and creating money out of thin air in order to pay for the war effort. Also, the federal tax base was much thinner than it is today - only about 1% of the population paid the personal income tax. Selling the bonds was a way for the government to soak up and recycle the money it was printing and handing out, to curb inflation, and also was a quick source of cash.

The current military conflict is not going to be nearly as expensive, and it's starting in the midst of a deflationary trend. And the tax base is quite a bit wider, with monthly payments of employer-withheld taxes.

Available: War Bonds were identical to the Savings Bonds which the federal government had started selling a few years before, aside from having ink on the front that said "War Bonds". It was a marketing move, nothing else. When WWII was over, the government went back to selling Savings Bonds. It still does so. The most likely candidate to be converted to "War Bonds" is the Series E. The terms would probably not change at all.
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