Some things in life are just really expensive, like college, home ownership, and snacks at the movies. Happily for us, we have the option to take out loans for our bigger expenses (not our purchase of Junior Mints).
But you know what else is really expensive? War. And it’s not like the government can just take out a loan from B of A to fund its war efforts.
So how do nations pay for it all?
Well, one option is bonds. During World War I, the U.S. government issued what are known as “Liberty Bonds”: bonds that the average American could buy to support the war effort and show some patriotic pride. Liberty Bonds were offered four times throughout the course of the war, and offered interest rates that varied from 3.5% to 4.25%. The first issue, which was offered on April 24, 1917, was even tax-exempt up to $30,000, which was a nice little added incentive. The last of the WWI Liberty Bonds matured in 1938, but the bond certificates are still coveted collector’s items.
Related or Semi-related Video
Finance: What is a Savings Bond?2 Views
finance a la Shmoop what is a savings bond well it's kind of like charity
charity because interest rates on savings bonds are exceptionally low even
by government standards well there was an era in America when taxpayers happily
and willingly loaned money to Uncle Sam and were happy to do so because they had
great faith and trust that the people we elected were in fact decent honest [old government photos]
hard-working representatives who had the interests of the nation placed far ahead
of their own personal gain it was the era of Jimmy Stewart and a whole bunch [photo of Jimmy Stewart]
of others you should think the greatest generation yeah we know even a pretty [picture of John Wayne]
good generation check Congress for details so savings bonds used to be a
standard birthday present for young people kind of like the cross pin that [kid's birthday party]
nice Jewish boys would get at their bar mitzvahs grandmother's after slathering [boy's mar mitzvah]
in a bathtub of angry perfume loved handing the $50 savings bond envelope to [woman in hot bath]
their college-bound progeny well savings bonds are issued by the US
Treasury and have no stated maturity date instead what happens is that the
savings bond welljust pays the interest for some
period of time like say a decade and at the end of that 10 years while it simply
stops paying interest you can cash in the bond at that time or just let it
ride essentially renting money to the Gov for free and yeah you don't want to
confuse a savings bond with this bond yeah who needs no safety
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