Since the recession of 2007-2009, the FED has bought about $85 billion of federal debt each month directly from the government- That amounts to a little
over $1 trillion per year for about 7 years- The entire economy is only about $19 trillion- Because this money wasn’t in the economy before, this is the same
thing as printing over $1 trillion of new money each year- They talked about cutting back on this “monetizing the debt” for years, but generally, they conclude
that the economy is not strong enough on its own to pull the plug
What’s the difference between the FED buying government debt on the open market (from the public) and buying it directly from the federal government?
If the economy continues to “not be strong enough” to stop pouring this extra money into the economy, have we really “recovered”?
Other governments have printed a lot of extra money to help their economies recover from recessions before – and there were severe repercussions- What’s
the danger here?