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To: JF Quinnelly who wrote (7777)	8/16/1999 9:15:00 AM
From: Oblomov	Read Replies (2) \| Respond to of 15132

JFQ, there is a loss of money in the system because it is not a closed system. Money comes into the system in the form of foreign investment. In fact, a "trade deficit" is just another way of saying that money is flowing into our economy from foreign sources. If Treasuries were retired, then capital would begin to flow out of the economy. I would not be surprised if the U.S. began to have a positive trade balance again. AA

To: JF Quinnelly who wrote (7777)	8/16/1999 9:38:00 AM
From: Boca_PETE	Read Replies (1) \| Respond to of 15132

JFQ: RE: < By retiring national debt, there is no loss of money in the system. > I'd say your statement is true if you are narrowly focused solely on the transaction to buy back national debt. However, I believe a broader focus on the effect is necessary. The consequence and sequel to national debt retirement is lower go-forward government expenditures for interest expense on the retired debt. Thus, cash is paid out initially to retire debt. Then that cash is recovered over time in the form of lower than otherwise government expenditures for future interest until such time as the entire initial outlay to buy back national debt is recovered. From that point forward, the effect is an annual loss of money in the system imho. P