QE3 only needed if economy deteriorates: Fed's Bullard

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Harry079 wrote:

“The Fed in late 2008 slashed interest rates to near zero and has since bought $2.3 trillion in long-term securities in an unprecedented drive to spur growth and revive the economy”

How was this done and where did they spend that 2.3 trillion dollars?

The continued raising of the debt limit allowed the Fed to buy government bonds in the form of Treasuries or Inter-governmental non-marketable Government Account Series.

The Treasury then spent the money on those ever economy stimulating things such as Social Security checks, medicare/medicaid payments, unemployment benefits, solar projects, Fanny Mae/Freddie Mac, AIG and last but not least the major banks.

Now I’m all for the continued payments for Social Security, Medicare/Medicaid, Unemployment Benefits, because if they didn’t they would have had a hard time explaining to the American People why if the debt limit wasn’t continually raised they would not be getting their checks.

Feb 24, 2012 12:39pm EST  --  Report as abuse
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