You misread. I will try to be clearer:
Why spend money unnecessarily by calling in bonds for early pay off?
We cannot force them to take less than the full value of the bond at maturity. Therefore, we are always paying the interest. The question is, in current or slightly inflated dollars? And why pay at full maturity when some will cash in before full maturity?
Thus, we do not gain an advantage by paying off future obligations now,but, in fact, lose money. That is why I assume that we would reserve the money, and therefore withdraw it from circulation. Now, if we banked it, I guess that that objection could be eliminated, but that assumes that we never came to a crisis where we had to withdraw a lot at once. If we did withdraw a lot at once, those banks that held the money would suffer substantial losses, and could cause a lot of instability in financial markets. |
