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What individuals did the fed give money too? The stimulus payments were paid through the US Treasury like any other congressional spending bill.

by jjeaff 4y ago

deleted 4y ago
[deleted]
imtringued 4y ago
Stop that, you are breaking the illusion. People want a petty conspiracy theory. People approximate this and think they can just reduce it to one government office when the truth is that literally every single participant in the economy is responsible. If I had to dumb it down I would say that the economy tries to be in balance. If the government appears to be doing one thing, it isn't alone, there are private companies and private individuals doing the complement. In macro economy it is quite common to split an economy into two asymmetric entities. You, and the rest of the economy. If you earn, they spend, if they spend you earn. If you borrow (known as printing in conspiracy theory jargon), they save (in aggregate), if they save, you borrow. Of course I am assuming that the balance is being maintained. If someone spends less than they earn, they save but if there is no net borrowing the balance is being disrupted. What happens then is deflation but that implies that the economy is in disequilibrium and must shake off some of the people earning more than they spend. It is kind of ironic that savers want deflation because in a perfect market they would get fired and wouldn't be allowed to work more which prevents them building up more savings.
- yieldcrv 4y ago
  Mention the Federal Reserve once and someone thinks you are talking about a conspiracy theory. In any case, I think I was incorrect about the nature of the direct lending program, here is the report from Congress about the CARES Act (the first pandemic relief bill) and how its "expanding the Fed’s traditional role beyond lender of last resort to the banking system and even beyond the more expansive role it took in the 2007-2009 financial crisis" Its really not a simple "treasury does this, federal reserve does that" https://crsreports.congress.gov/product/pdf/R/R46329 https://crsreports.congress.gov/product/pdf/R/R46329
  - jjeaff 4y ago
    I believe the direct lending program consists mostly of the Fed buying corporate bonds, which is loaning money to private corporations. There is also a component where they can loan to small businesses (notably a business with 200 employees is generally considered "small". These programs are not handouts, they are loans. The Fed did this in 2008 when they bought bonds and even stock in some big companies. Overall, the Fed made a big profit on all of that when the bonds were paid back with interest and the stock was sold back in tranches over time as the market recovered.

What individuals did the fed give money too? The stimulus payments were paid through the US Treasury like any other congressional spending bill.

by jjeaff 4y ago

What individuals did the fed give money too? The stimulus payments were paid through the US Treasury like any other congressional spending bill.

deleted 4y ago

[deleted]

imtringued 4y ago

Stop that, you are breaking the illusion. People want a petty conspiracy theory. People approximate this and think they can just reduce it to one government office when the truth is that literally every single participant in the economy is responsible. If I had to dumb it down I would say that the economy tries to be in balance. If the government appears to be doing one thing, it isn't alone, there are private companies and private individuals doing the complement. In macro economy it is quite common to split an economy into two asymmetric entities. You, and the rest of the economy. If you earn, they spend, if they spend you earn. If you borrow (known as printing in conspiracy theory jargon), they save (in aggregate), if they save, you borrow. Of course I am assuming that the balance is being maintained. If someone spends less than they earn, they save but if there is no net borrowing the balance is being disrupted. What happens then is deflation but that implies that the economy is in disequilibrium and must shake off some of the people earning more than they spend. It is kind of ironic that savers want deflation because in a perfect market they would get fired and wouldn't be allowed to work more which prevents them building up more savings.

yieldcrv 4y ago
Mention the Federal Reserve once and someone thinks you are talking about a conspiracy theory. In any case, I think I was incorrect about the nature of the direct lending program, here is the report from Congress about the CARES Act (the first pandemic relief bill) and how its "expanding the Fed’s traditional role beyond lender of last resort to the banking system and even beyond the more expansive role it took in the 2007-2009 financial crisis" Its really not a simple "treasury does this, federal reserve does that" https://crsreports.congress.gov/product/pdf/R/R46329 https://crsreports.congress.gov/product/pdf/R/R46329
- jjeaff 4y ago
  I believe the direct lending program consists mostly of the Fed buying corporate bonds, which is loaning money to private corporations. There is also a component where they can loan to small businesses (notably a business with 200 employees is generally considered "small". These programs are not handouts, they are loans. The Fed did this in 2008 when they bought bonds and even stock in some big companies. Overall, the Fed made a big profit on all of that when the bonds were paid back with interest and the stock was sold back in tranches over time as the market recovered.