Fed generates enormous profits, reduces deficit

[opebo]

Interesting article about the huge profits the Fed makes from holding bonds[/quote]

Why all the talk of the Fed 'selling off' the bonds it has bought with fiat money?  Why not instead have the Fed soak up all the US gov't debt?  The debt could then either be forgiven or in any case the interest paid would go towards the budget.

Of course the argument would be that this would 'cause inflation', but it is rather obvious this is a red herring.