We could've forgiven the entirety of every single student loan yesterday, but instead -- Fed to Inject $1.5 Trillion in Bid to Prevent ‘Unusual Disruptions’ in Markets

submitted by magnora7 from wsj.com

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[–]edwwsw 6 insightful - 1 fun6 insightful - 0 fun7 insightful - 1 fun -  (1 child)

The fed is issuing loans (repos actually), not free money.

https://www.usatoday.com/story/money/2020/03/12/coronavirus-new-york-federal-reserve-stock-market-liquidity/5032970002/

The repos make the loans essentially collateralize. The borrows do have to pay these back + interest (usually low rates).

https://www.investopedia.com/terms/r/repurchaseagreement.asp

The money to this isn't coming from SS.

https://www.thebalance.com/how-is-the-fed-monetizing-debt-3306126

[–]magnora7[S] 4 insightful - 2 fun4 insightful - 1 fun5 insightful - 2 fun -  (0 children)

The borrows do have to pay these back + interest (usually low rates).

Yes but the fed still created the initial loan value out of nothing. That's free money they just made out of thin air, is it not?

So not only are they giving out free (temporary) money, but they're also capturing companies in the process through the debt that is created.