Those same incentives have led our present-day Treasury to issue securities across a wide range of maturities and, I am pleased to note, to begin soon to offer debt indexed to consumer prices. Fifth, and this should come as no surprise from one of the authors of the Federalist Papers, Hamilton explained his policies in well-written, logically constructed arguments that remain a pleasure to read, even two hundred years later. Hamilton's lessons speak across the generations, both to policymakers in mature democracies and those coping, as he did, with financing newly independent states. If we are to protect his creation, the U.S. Treasury market, we must remember two facts he could not afford to forget. For one, buyers of Treasury securities do so through their own volition.
Investors have alternatives, and more so now than ever before.
For another, the issuer of those securities, the U.S. Treasury, must finance an amount, on net, that is determined by the political judgments of the congressional and executive branches of government. We at the Federal Reserve will do our part to contribute to financial stability, which is to preserve the purchasing power of money over time. To be sure, the dollar sums that preoccupied Alexander Hamilton were small. But the issues at stake were large. I can only hope that, by following his precedent, today's policymakers show some of the same wisdom in dealing with the public debt.