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To: chic_hearne who wrote (2470)	7/6/2000 11:08:38 PM
From: pater tenebrarum	Respond to of 436258

chic, the buybacks have definitely a stimulative effect, on both the economy and the stock market. for one thing they affect the interest rate on the bonds and notes that are the subject of the buybacks, and what's more, they effectively act as an equivalent to permanent reserve injections (coupon passes in Fed-speak - the monetization of govt. debt) for the banking system, thus helping to expand private sector debt. since the govt. uses accounting sleight of hand (the social security fund gets IOU's and the cash surplus from there is used to buy back the bonds) to effect these buybacks, i regard them as part of a wider market manipulation scheme. they definitely have a stimulative effect...no doubt about that. note that the governments overall debt levels continue to grow... so on the bottom line the 'surplus' is a mirage.