How To Spend $1.25 Trillion
futureofcapitalism.com

NPR's Planet Money program has a pretty good piece headlined "How To Spend $1.25 Trilllion." From the article:

In the end, they came very, very close to their target: They told us they were just 61 cents short. (In other words, they bought $1,249,999,999,999.39 worth of mortgage-backed bonds.)

The Fed was able to spend so much money so quickly because it has a unique power: It can create money out of thin air, whenever it decides to do so. So, Dzina explains, the mortgage team would decide to buy a bond, they'd push a button on the computer — "and voila, money is created."

The radio piece, which is worth listening to if you have the time and are interested in the Federal Reserve, refers to it as "magical."

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Cash for Clunkers
futureofcapitalism.com

The Boston Globe's Jeff Jacoby does a nice job of expanding on the points we made here August 23 in a post about the Cash for Clunkers program. Link via Professor Greg Mankiw's blog.

And more: National Public Radio has a piece on a study by Amir Sufi of the University of Chicago and Atif Mian of the University of California, Berkeley, that found, as NPR summarizes it, "The government's 'cash for clunkers' program boosted auto sales by 360,000 during the two months it was in place...But in the seven months that followed, sales were down by 360,000 compared with what they would have been without the program."

Read More...

How To Spend $1.25 Trillion
futureofcapitalism.com

NPR's Planet Money program has a pretty good piece headlined "How To Spend $1.25 Trilllion." From the article:

In the end, they came very, very close to their target: They told us they were just 61 cents short. (In other words, they bought $1,249,999,999,999.39 worth of mortgage-backed bonds.)

The Fed was able to spend so much money so quickly because it has a unique power: It can create money out of thin air, whenever it decides to do so. So, Dzina explains, the mortgage team would decide to buy a bond, they'd push a button on the computer — "and voila, money is created."

The radio piece, which is worth listening to if you have the time and are interested in the Federal Reserve, refers to it as "magical."

Read More...

Cash for Clunkers
futureofcapitalism.com

The Boston Globe's Jeff Jacoby does a nice job of expanding on the points we made here August 23 in a post about the Cash for Clunkers program. Link via Professor Greg Mankiw's blog.

And more: National Public Radio has a piece on a study by Amir Sufi of the University of Chicago and Atif Mian of the University of California, Berkeley, that found, as NPR summarizes it, "The government's 'cash for clunkers' program boosted auto sales by 360,000 during the two months it was in place...But in the seven months that followed, sales were down by 360,000 compared with what they would have been without the program."

Read More...