Arnold Kling, commenting on John Taylor's observation that the Federal Reserve bought 77% of new federal debt in 2011, writes:
One side note is that some folks argue that the low interest rate on government debt is a sign that the government should issue more of it. This argument might be more persuasive to me if the Fed were buying a much smaller share. But the fact that the Fed is buying most of it says that (a) the markets do not necessarily agree with the low interest rate and (b) that as taxpayers we are not really benefiting from the low interest rate, since we are buying back (via the Fed) most of what we are issuing.