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View Diary: Familiarize Yourselves With A Liberal Hero / The Fallacies of Austrian Economic Ideology (108 comments)

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  •  If we have too much debt, let's pay it off. (1+ / 0-)
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    In fact, the Fed is doing some of that right now.  They call it "quantitative easing."  So far they've bought up (i.e., paid off) 11% of the national debt (roughly $1.6 trillion).

    They Fed does this by buying Treasury bonds from banks in exchange for credit ("reserve") in an account at the Fed.  Some folks are concerned that this activity might cause inflation, but so far that has not happened, largely because we are in a recession (liquidity trap).

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