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Interest rates are at historical lows. I believe they went negative in parts of Europe recently. Since interest on the national debt is one of the biggest, if not the biggest, expense item of the U.S. federal budget, would it make sense to "refinance" the national debt somehow by borrowing new money at these lower rates to payoff the old debt at the higher rates?

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  • The Treasury continuously issues new debt, and retires matured issues. (This is called “rolling over debt.”)
  • The Treasury has no right to pay debt off early (“refinance”).
  • The closest thing that can be done is to repurchase debt. The Federal Reserve - whose common equity is owned by the Treasury - is repurchasing debt during “quantitative easing” operations.
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