tag:blogger.com,1999:blog-7590806168352381335.post3737463834047655260..comments2023-05-22T07:06:20.045-04:00Comments on Funny Economist - Randall Parker's Completely Serious Macroeconomics Blog: The Treasury is now the Fed's biggest political constituency...and that frightens the hell out of me.Randall Parkerhttp://www.blogger.com/profile/10027493610187640456noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7590806168352381335.post-2417274333242923482013-03-08T13:57:45.066-05:002013-03-08T13:57:45.066-05:00"The Fed is still buying long-term bonds in a..."The Fed is still buying long-term bonds in an effort to temporarily drive down long-term interest rates by a few basis points. It has concluded it can survive the loss in mark-to-market value of its bond portfolio that higher interest rates will imply, when they come, by suspending its customary interest-rebate payments to the Treasury. If the Treasury was counting on that roughly $80 billion per year, that is Treasury's problem. If higher rates cost the Treasury $900 billion a year, that is Congress's problem."<br /><br /><br />How wonderful it is that the value of our money to exchange for debt is largely beholden to a handful of bankers (and money experts) unelected by the people.<br /><br />"Will Congress and the public really agree to spend $900 billion a year for monetary tightening?"<br /><br />But, why should we? Why would it be rational to do so?Anonymousnoreply@blogger.com