None of this cost the American taxpayer a dime. The Fed was doing what any bank does everyday for its commercial customers, creating money by making loans. Security? The banks pledged various assets including residential mortgages that no one knew exactlly what they were worth. What could the US Treasury use for security? Why not the human capital assets of the nation? This would allow the Treasury to finance such local gvernment investments as teachers instead of laying them off. This makes too much sense and therefore probably won't be done!
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