LETTERS: IS DEBT REASON FOR RATE JUMPS?

To the editor:

Unbeknownst to most Americans, the U.S. Treasury is going to market to refinance $22.8 billion in maturing short-term debt. Since the U.S. money machine must be fed an ever-richer diet, the Treasury will be selling $26 billion in new IOUs. This time around, foreign bankers won't be so eager to buy. Consequently, rates have to be made more attractive. Having become the world's largest borrower, more chances to make money have opened up in other places such as Asia and Europe.

Six times last year the Federal Reserve raised interest rates. It will probably do so again in early 1995. What for? To curb inflation? Maybe. Maybe not. The threatened inflation hasn't happened even though the economy is moving along at a satisfactory pace. Guess what? The real reason for increasing interest rates (not many are talking about this) is to be able to attract investors to fund our indebtedness so that we can continue to roll along oblivious of the reality that we are living on borrowed time.

GILBERT DEGENHARDT

Cape Girardeau