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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: Perspective who wrote (1510)5/19/2003 7:15:07 PM
From: UnBelievable  Read Replies (1) of 4907
 
To Meet The Financial Needs of the Government The Fed Auctions T-bills On A Weekly Basis

This is the way, and the only way, that the Federal government gets the cash that it is spending in excess of its revenue.

The Federal Reserve does not have the option of just "creating" the dollars and lending those dollars directly to the government.

What is the difference between the Fed buying long term paper in the market and just not issuing it in the first place?

To the extent that the Fed could just provide the government with the cash it needs without issuing debt why is it concerned about the Federal debt limit, and why is it constrained from providing the government with the money it needs when the debt ceiling has been reached?
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