"JEKYLL ISLAND, Ga. — The Federal Reserve is portraying its $600 billion plan to prop up the economic recovery as a difficult but needed step to promote growth by lifting stock prices and making long-term borrowing even cheaper.
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Ben S. Bernanke said Milton Friedman would support the Fed's recent moves.
Times Topic: Federal Reserve System
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But there is another way to look at it. The central bank will indirectly be financing the government’s deficits on a scale not seen since World War II. It will buy the equivalent of most of the new Treasury debt issued through next June. The portfolio of federal bonds it amassed as a result of the 2008 crisis will swell further, just about doubling.
As the magnitude of the Fed’s plan, announced on Wednesday, sank in, a weekend gathering here of top Fed officials and economists took on the air of an awkward family reunion, with rivalries for the affections of an ancestor."
Sunday, November 7, 2010
Friedman Casts Long Shadow as Economists Meet - NYTimes.com: