Ok- I've tried to think through what you've been saying.
And I see that we are talking from differing points of view. I'm thinking from the POV of me as a tax payer, and the future obligations our leadership may create on our behalf via policy decisions. Specifically, higher taxes to pay for policy decisions being made today.
You are speaking from a larger macro perspective. How the decision might effect the larger picture, which then effects me as a tax payer. Your larger macro perspective is so large, it's difficult for me to fit within my limited cranial capacity, without substantial effort and compression algorithms <g>, so I ignored it, because you seemed to be missing my most serious concern, about my future tax rates.<g> Hey, I don't care about marginal projects and rates of returns for others, as I don't see the connection to the affordability of Absolute vs Smirnoff or Potters.
I don't disagree that it is silly to think that changing the duration of outstanding debt will have a significant effect on interest rates in general. I consider the position that suspending the buybacks will drive longer term rates higher and hurt the economy as a non starter.
But I do see the mucking around with duration as having frictional costs, and the potential for increasing future financing costs of the Govt Debt when it comes time to roll over.
Based on what you've said, those potential future higher costs would be accompanied by higher demand for money, which I would think portends higher investment (and possibly consumption) or 'better times' from the perspective of the average American, thus might be worth the price. And what should concern us, is that the debt may be rolled over at lower rates in the future, a bleak prospect. So my grubby little tax payer perspective should be hoping for higher debt financing costs going forward, not worrying about what his personal bill for prosperity will be. |
