“Because the price we pay to purchase the debt back would increase to reflect the less valuable dollar.”
That’s what I don’t understand.
When a bind matures, do we pay to the holder something different than it’s nominal value in dollars no matter what those dollars are worth at the time? And is that not how we would “buy back” our debt, by paying the nominal value of the matured bond in dollars?
Sorry, I misunderstood your plan. Treasury bonds have a maturity date of 20 or 30 years in the future. I had assumed you had a shorter timeline.
At maturity you will be paid back with dollars worth whatever they are worth at the maturity date. By the same token, in the case of bonds your interest payments will be paid in dollars worth whatever they are worth at the time as well. Things like that are factored in to the selling price on the open market.