Did the Federal Reserve harm the economy with their bailout strategy?
Congress passed legislation & it was signed into law by the President, 2 of them, 1 for each bill. One reason the banks did not begin making loans was that they did not understand the bailout bill and needed time to decipher it. The banks had to read the fine print. Another reason is that the banks did not want to be brought under govt control as the auto industry was. Some of the fine print indicated that the banks could only repay the loans with the approval of the feds. They put money in with one hand & took money out with the other. Did putting the money in help, it hasn’t been determined yet. Did the banks hurt the economy by taking out money, interest & profits? It hasn’t been determined yet. The feds were also printing money & placing that into the economy. It kept things moving by putting money into the system & then taking it out, which is better than complete stagnation. There are excellent arguments to be made on both sides. But only time will tell if all this helped or hurt
