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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (7850)	8/18/1999 10:08:00 AM
From: Boca_PETE	Read Replies (1) \| Respond to of 15132

JFQ: RE:< Interest is a flow of money, not a quantity. > From a cash flow into (out of) the narrow money supply viewpoint, annual government interest payments on the national debt (money flows as you call them) increase the narrow money supply (M1) just as much as one-time government payments (also a money flow, albeit a one-time money flow imho) to buy back government bonds (national debt) imho. Imho, one-time government outflows to buy back government bonds reduce annual government payments for interest on those bought back government bonds - thus an annual savings is recovered by the amount of such reduced annual interest obligation by the government. At the point in time cumulative such annual savings exceed the one-time government outflow to buy back the government bonds, there is a break-even point. Annual government savings on interest after that break-even point represent less public expenditures by the government on a cumulative basis (less increases to the money supply than would have otherwise occurred had the government retired or bought back government bonds)imho. Interesting and enjoyable discussion, JFQ. You certainly know a lot about money and banking. Do you teach it ? P © Copyright 1999