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Politics : View from the Center and Left
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To: wonk who wrote (149728)11/12/2010 12:44:15 PM
From: Little Joe  Read Replies (1) of 541753
 
But wouldn't it also be true that the lock box money would be used to purchase bonds that would otherwise have to be purchased on the open market and repaid anyway. So either way the bonds will have to be paid.

So lets say the government wants to borrow 100. It borrows10 from the lock box and 90 from other sources. It still has to pay back 100.00, It is just a matter of who the debtor is.

Where am I going wrong here?

I think I am correct that the "lockbox" money is a loan to the government and bears interest as any bond, although I seem to recall that the interest rate is less.

lj
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