Written by Scott Dunn   

According to a short post on his “Beat the Press” blog (imagine a rolled up newspaper used on the Press when they make a mess), noted economist Dean Baker says “that the decision to pay interest to wealthy bondholders is a policy choice, not a fact of nature.” He goes on to say that it is possible for the Fed to buy and hold the bonds refunding the interest to the Treasury. He also points out that the Fed refunded nearly $80 billion to the Treasury last year and he says that is normal operating procedure. In other words, all that “Tea Party Talk” about the Fed being a private bank collecting interest on our debts for their shareholders was wrong.

So, what about these wealthy bondholders? Say, aren’t they the same guys who want to retain historically low tax rates so they can keep more of what they earn? Their plan seems to work like this: lower tax rates, create deficits, buy bonds, sit back and watch the checks roll in.

If that isn’t a conflict of interest, I don’t know what is.