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BROOKINGS INSTITUTION PRESS Washington, D.C. COVER BY NANCY BRATTON What is the best way for the U.S. Treasury to finance the federal government’s huge debt? Everyone talks about the size of the national debt: now at $13 trillion and climbing. Few talk about how the Treasury does the borrowing, even though it is one of the world’s largest borrowers. Yet everyone from bond traders to the home-buying public is affected by the Treasury’s decisions about whether to borrow short or long term and what types of bonds to sell to investors. In The $13 Trillion Question, Harvard’s Robin Greenwood, Sam Hanson, Joshua Rudolph, and Larry Summers argue that the Treasury could save taxpayers money and help the economy by borrowing more short term and less long term. They also argue that the Treasury and the Federal Reserve made a huge mistake in recent years by rowing in opposite directions: while the Fed was buying long-term bonds to push investors into other assets, the Treasury was doing the opposite—selling investors more long-term bonds. The Hoover Institution’s John Cochrane joins the discussion by suggesting a series of new and innovative ways for Treasury to finance the debt. Each chapter of The $13 Trillion Question includes responses from a variety of public and private sector experts on how the Treasury does its borrowing. Larry Summers offers concluding comments with a call for the policy community to pay greater attention to debt management. “Debt management is too important to leave to the debt managers,” he says. DAVID WESSEL is director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution and a contributing correspondent to the Wall Street Journal, where he was an editor, columnist, and reporter for thirty years. ...


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