Essay about Quantitative Easing During the Bush and Obama Administrations

Essay about Quantitative Easing During the Bush and Obama Administrations

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Quantitative easing is an unusual form of policy used when interest rates are near 0%. Banks rouse the nationwide financial system when usual monetary policies have become ineffective. In recent decades the government Central bank has argued they are the government’s most important financial agency.
Throughout their power to change interest rates and buy massive amounts of financial assets, the Federal Reserve System applied more influence over economic growth and the employment rate in recent times than any other government entity.
During the Obama administration it’s been used to sustain the financial system after the Wall Street meltdown in 2008; it also gave the economy extraordinarily methods of support during the recession such as purchases of securities, the creation of new lending platforms and a weak recovery that trailed. The FED’s did not mention to anybody that banks needed help with emergency loans to assure their investors that their firms weren’t in danger. These actions are credited to quantitative easing, along with the stimulus bill and federal bank bailouts, preventing a global depression. The central bank provides asset purchases, emergency loans and other forms of aid worth approximately $7.8 trillion dollars, making them the government’s largest effort to the financial system.
Quantitative easing lowers interest rates, makes it cheaper for the banks to borrow money and generally helps the banks give loans that help the activity of the economy. During the recession banks do not want to lend money so quantitative easing comes in hand by methods of bringing money into the economy and helping lower interest rates that Central banks do not usually control. Purchasing large debt by “expanding the balance sheet,...


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...has slowly prevented from collapsing.



Works Cited


Mcguire, Bill. "Fed Loaned Banks Trillions in Bailout, Bloomberg Reports." Companies. 2011. Web. 28 Mar 2012.

Mallin, Jay. "Federal Reserve (Fed).” The New York Times, n.d. Web. March 21, 2012. .

Thornton, David. "Obama and Gas Prices." Yahoo. Examiner.com, 03-25-2012. Web. 28 Mar 2012. .

Giokaris, John. "Barack Obama Follows Bush And Piles On Debt: Where Is The Tea Party?" Policymic. Business, National Debt, 03-22-2012. Web. 27 Mar 2012.

Ip, Greg . "Measuring the impact of regulation: The rule of more." Greg Ip . N.p., 02-18-2012. Web. 27 Mar 2012.

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