You might lose interest depending up purchase price, however when redeemed at par=face value you don't lose principal. A bond with a 1% coupon sold in a higher interest rate environment would lose much more in principal that the 2 billion in lost interest.
“””To illustrate, in November, Social Security needed extra cash to pay the bills, and redeemed nearly $100 billion in bonds at par, which earned 4 percent interest. At the same time, it kept bonds that pay less than 1 percent on the books. Given the process, the program lost nearly $2 billion in interest.
You might lose interest depending up purchase price, however when redeemed at par=face value you don’t lose principal. A bond with a 1% coupon sold in a higher interest rate environment would lose much more in principal that the 2 billion in lost interest.”””
You are correct. Here are bond prices as of today.
4% 11/15/2042 $103.203
1.125% 08/15/2040 $66.285
The author of this story is an imbecile.
If the Social Security had sold the 1% bonds, they would have received about $65 billion on the $100 billion face value of the bonds.