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To: Don Lloyd who wrote (91164)	1/4/2001 3:55:30 AM
From: Peter J Hudson	Read Replies (1) \| Respond to of 152472

Don, I find it hard to believe that I am the only person you have ever heard suggest that we should pay down the national debt. This statement is certainly an exercise in simplicity. >> In any case, speaking in a generally simplified manner, unless you know how interest rates will change in an unknowable future, all cash flows will use a single interest rate to discount those flows over time. This means that your future tax relief, when discounted to present value, will exactly be offset by the payments you make in the present to create it by paying off debt.<< Your discounted present value equation makes the tax relief equal the payments made referenced to the date the debt is paid off. It doesn't account for the fact that the reduction of interest payments continues indefinitely, just as the tax burden created by the interest payments continues indefinitely if we don't pay down the debt. Pete