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Politics : Al Gore vs George Bush: the moderate's perspective -- Ignore unavailable to you. Want to Upgrade?

To: Lane3 who wrote (5261)	11/9/2000 10:44:17 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 10042

Karen, you can't pay down the debt to any meaningful degree without severely distorting the markets. Just as deficit spending by the govt tends to "prime the economic pump", taking in surplus revenues results in depriving the private markets of capital they require to function. As of now, the market for US treasuries is pretty well established. But throw in the US govt as a annual buyer of $200 billion in T-bills and it will result in conservative investors turning to guaranteed returns in T-bills, and away from AAA corporate and mortgage bonds. But of course, there has to remain this implicit anticipation the govt will buy back publicly held govt debt each year or 30-year yields will rise. Now what I was thinking about as a potential solution is giving everyone back a rebate on their taxes paid ever year. That way the money gets collected by the government, can be used for paying down as much debt as possible without overly distorting the markets, and the remainder given back to the US taxpayer at the end of the year, or applied to the tax obligations for the next year. But in sum, there is just no way they can buy back $200 billion in annual debt from the public without distorting the strength of the dollar to the detriment of the Euro and Yen. Regards, Ron