Article “Goldman says Fed faces $4 trillion hole” reports:
“Economists at Goldman Sachs estimate the Federal Reserve may need to buy a staggering $4 trillion worth of assets such as Treasury securities to get the economy rolling again.
The Goldman economists, Jan Hatzius and Sven Jari Stehn, don’t expect the Federal Reserve to go nearly that far when it resumes its asset-purchasing quantitative easing policy. Citing many officials’ unease with the prospect of adding significantly to the Fed’s already bloated balance sheet, Goldman expects the Fed to end up buying around $2 trillion worth of assets over the next few years …”
WATCHDOG: As we and most economists have said, monetary policy is no substitute for fiscal policy when interest rates are approaching zero. Those castigating the Recovery Act and braying against deficit spending during this Great Recession have intimidated Congress, in many cass out of political opportunism rather than belief.
