Quote of the Day II

To Hillary Clinton:

In fact, foreign-government holdings of U.S. debt arguably make these governments "hostage to the economic decisions being made in Washington." The Fed, after all, could monetize this debt, inflating away its value. Or Uncle Sam could repudiate this debt, or unilaterally change its terms in ways unfavorable to holders. Or you and your colleagues could implement economically disastrous policies that drive up long-term interest rates and, hence, drive down the value of outstanding treasuries.

And if foreign holders of U.S. government debt dumped their holdings of U.S. treasuries for economic reasons -- worried that the value of this debt will soon fall -- then there's every reason to suppose that the very same dumping of this debt would occur if every cent of the debt were held by Americans.

~GMU economist Don Boudreaux's Letter to Senator Clinton