Let's see if this makes sense to anyone...

You work, you get paid some of what you've earned.

You take a bit of your after-tax income and buy a savings bond, i.e. you make a low (-er than the rate of inflation) interest loan to the gov't.

When you go to redeem your bond (which you bought with after-tax earnings), the interest due you is then taxable as income. 

Am I the only person who thinks the money you get back (even though nominally more) buys less than the money you entered this transaction with? Shouldn't they offer a little tube of vasoline with every purchase?

source ('cause you think I make this stuff up... ): 
http://www.treasurydirect.gov/indiv/products/prod_eebonds_glance.htm