To me, the whole idea of a sovereign nation having to borrow its own currency is completely absurd. It's all fiat now anyway, so why not just print the stuff?

I know, the market is supposed to act as a brake on govt. borrowing through the interest rate mechanism, but how can that work when you have central bank intervention on behalf of that same government? The notion that you can separate the two is just laughable. The only people I see being served by this arrangement are the bankers themselves who play the spread and get bailed out when they overeach. The rest of us eventually get screwed no matter what the original intent.

Consider a government that only prints money - never borrows. Right away you eliminate interest costs. No need to tax us for that. You also don't have expansionary govt. crowding out private lending. With no govt. to lend to, people will have to look around for alternatives, the natural choice being local credit unions making conservative loans for home purchases, cars, small business, that sort of thing. Stuff that stimulates the economy. The other alternative would be municipal and state bonds I suppose. If they get in trouble, the central govt. can print the money to bail them out. Not a perfect arrangement, but what is?

Sure, money printing is inflationary, but reckless borrowing is even worse. Anyone who thinks the govt. is spending (printing) too much is free to put their savings in a different currency or buy gold. They're also free to vote the bums out once every 4 years, and the issues at election time will be a lot less fuzzy once you remove the banking lobby from the mix.

Seriously, there is no greater fraud in history than government bonds. Sooner or later they ALL default.

ebear