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Did Congress just nationalize the Fed? No. But the door to that result has been cracked open
Mainstream politicians have long insisted that Medicare for all, a universal basic income, student debt relief and a slew of other much-needed public programs are off the table because the federal government cannot afford them.
But that was before Wall Street and the stock market were driven onto life-support by a virus.
Congress has now suddenly discovered the magic money tree.
It took only a few days for Congress to unanimously pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be doling out $2.2 trillion in crisis relief, most of it going to Corporate America with few strings attached.
Beyond that, the Federal Reserve is making over $4 trillion available to banks, hedge funds and other financial entities of all stripes; it has dropped the fed funds rate (the rate at which banks borrow from each other) effectively to zero; and it has made $1.5 trillion available to the repo market.
It is also the Federal Reserve that will be picking up the tab for this bonanza, at least to start.
The US central bank has opened the sluice gates to unlimited quantitative easing, buying Treasury securities and mortgage-backed securities “in the amounts needed to support smooth market functions.”
Last month, the Fed bought $650 billion worth of federal securities. At that rate, notes Wall Street on Parade, it will own the entire Treasury market in about 22 months. As Minneapolis Fed President Neel Kashkari acknowledged on 60 Minutes, “There is an infinite amount of cash at the Federal Reserve.”
The taxpayers have obviously been shortchanged in this deal.
David Dayen calls it “a robbery in progress.”
But there have been some promising developments that could be harnessed for the benefit of the people.
The Fed has evidently abandoned its vaunted “independence” and is now working in partnership with the Treasury. In some sense, it has been nationalized.
A true partnership, however, would make the printing press available for more than just buying toxic corporate assets. A central bank that was run as a public utility could fund programs designed to kickstart the economy, stimulate productivity and generally serve the public.
originally posted by: ignorant_ape
a reply to: FyreByrd
Did Congress just nationalize the Fed? No. But
clickbait idiocy at its " finest "
originally posted by: Fallingdown
Won’t the majority of that be sold back once the economy straightens out .
Hell I wouldn’t be surprised if Trump turned a profit . (Jk)
But it’s not like we really have a choice this time .